THE government has terminated its 15-year port dredging and concession agreement with Integrated Marine Works Sdn Bhd (IMW) due to multiple breaches of agreement terms.
Transport Minister Anthony Loke Siew Fook announced that IMW had violated key terms of the agreement including changing shareholders without government approval and failing to pay concession charges.
“When the agreement was signed, IMW was wholly-owned by Inai Kiara Sdn Bhd. However around July 2023, the ministry was informed that Inai Kiara had been dissolved following a Winding Up Order issued by the Shah Alam High Court dated April 11, 2023,” he told a press conference at the Transport Ministry office here today.
“Further investigations by the ministry found that the shareholders of IMW had been changed from Inai Kiara to Inai Warisan without government approval which breaches a term of the agreement that stipulates that the company cannot change shareholders without government approval.”
Moreover, IMW failed to make the concession charge payment for 2023 as stipulated in the Concession Agreement.
The ministry issued a default notice to IMW on Jan 29, giving the company a three-month period until April 29 to remedy the breaches. As the company failed to do so, a termination notice was issued on June 11.
Loke stated that the government would not seek to appoint a new company to replace IMW.
Instead, a new policy will be formulated to encourage the growth of the local dredging and reclamation industry, promoting better competitiveness in the market.
IMW was originally appointed to handle all port dredging and reclamation works for federal ports under a 15-year concession on Dec 21, 2004.
Following the concession’s expiration in 2019, the government decided to reappoint IMW in 2021, granting a 15-year extension until 2036. The new concession was signed on May 30, 2022.
“After the change of government due to the ‘Sheraton Move’, the new Cabinet on July 7, 2021 decided to reappoint IMW to carry out dredging and reclamation works for all federal ports in the country with a concession period of 15 years that will expire in 2036,” said the Transport Minister.
“I would like to emphasise that most of the dredging and reclamation projects in the federal ports are implemented and financed by the respective port operators, which does not involve funds from the government.”
During the initial concession, it was noted that IMW had successfully completed 247 projects in accordance with the guidelines and specifications set by the MOT, all of which were completed on time.
The company constructed three dredger ships — Inai Ixora, Inai Liatree and Inai Kenanga — at its own shipyard in Pulau Indah, Selangor.
According to filings with the Companies Commission of Malaysia (CCM), IMW reported an after-tax profit of RM265,751 on a revenue of RM41.78 mil for its financial year ended Dec 31, 2021 (FY2021).
IMW had total assets of RM191.9 mil and total liabilities pegged at RM138.99 mil, out of which more than 93% or RM129.84 mil were current liabilities.
Furthermore, IMW had retained earnings of RM47.91 mil as of the end of 2021. CCM filing noted that the company had liabilities amounting to RM582.8 mil with Maybank in March 2017. – June 13, 2024
