Sun07222018

LAST_UPDATESat, 21 Jul 2018 9pm

Lafarge Sees No Major Financial Impact From ECRL Suspension

KUALA LUMPUR -- Lafarge Malaysia Bhd, which clinched a contract in March to supply cement for the East Coast Rail Link (ECRL), said the project's suspension is not expected to have a significant financial impact on its operations and results in the period up to date.

This was because completed work would be compensated for in accordance with the terms and conditions of the contract, the cement maker said in a filing with Bursa Malaysia.

“However, for the period subsequent to the suspension date, Lafarge will only be able to assess the actual financial impact on the operations and financials of the company on receipt of a clear direction from the client (China Communications Construction (ECRL) Sdn Bhd) and/or Malaysia Rail Link Sdn Bhd after completion of the government’s review of the ECRL project,” the company added.

Its unit, Lafarge Cement Sdn Bhd, inked a deal with China Communications Construction (ECRL) on March 19 to supply cement for all eight work packages for the proposed ECRL project for an estimated provisional value of RM270 million.

Today, Lafarge received instruction from the Chinese contractor for the suspension of supplies with immediate effect until further notice. This followed a similar instruction from Malaysia Rail Link Sdn Bhd to  China Communications Construction (ECRL) on July 3.

Lafarge said if the suspension were lifted, the contract would contribute positively to the earnings of the group for the financial year ending Dec 31, 2018, and the financial period thereafter within the duration of the contract.

-- BERNAMA