Mar 8, 2008 ... Lagoon Perdana: Notes of Meeting No. 5

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Itenary

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1.1    Dato Lee welcomed all attendees of the meeting and indicated the purpose for the meeting was to find out the reasons for Lagoon Perdana (LP) project delay and when the project can finally be delivered.

1.2    Dato Lee reminded all purchasers to have confidence with IJM as IJM had very good track records in completing all their projects.  Belvedere work progress was quoted as a good example of IJM’s commitment.

1.3    Nina questioned who was TGSB’s representative for this meeting.

1.4 Dato Lee indicated that Mr Sonny Kok from Talam is representing both Talam and TGSB.  Dato Lee  informed that TGSB is now back under Talam and no longer owned by the two new (2) Sabahan owners.  Talam wants to see completion of LP project.

Reasons for frequent Work Stoppages at LP

2.1 Nina questioned Talam why the frequent work stoppages at LP and billings made prior to each stop works.

2.2 Mr Sonny explained that their appointed contractor, Salam Kurnia (SK) had turn-over problems and over commitment on their part.

2.3 Mr Sonny added that there are a total of eight (8) projects managed by SK which have been delayed.

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3

3.1 Mr Tan, IJMC indicated that IJM is currently finalizing appointment of contractor to replace existing contractor, SK who is not performing.   IJMC and Talam/TGSB expect to agree and confirm acceptance of new contractor by 7^th March 2008.

3.2 Letter of award (LOA) will be awarded to new contractor 1 week after acceptance. 

3.3 New contractor will be managed by IJMC and is expected to begin works full swing latest by April 2008.

3.4 Nina questioned how IJMC and TGSB can ensure no more work stoppages when new contractor is appointed.

3.5 Mr TS Tan mentioned IJM’s selection criterion for their contractors includes:

-          price of tender

-          performance bond of 5%

-          financial performance

-          continuous supervision by IJMC to ensure project completion

3.6  Benjamin asked if this selection process can guarantee the contractor’s ability to complete the project.

3.7. Mr Quah explained that this is not a 100% guarantee but the contractor will tender based on current 2008 construction costs and IJMC is confident of LP’s completion.  Talam/TGSB will have to absorb any cost differences.

3.8 According to Mr TS Tan, in the event if contractor could not deliver LP project, the new contractor’s performance bond of 5% will be forefeited by IJMC.   There were no such bond with SK previously as SK was not appointed by IJMC then.

3.9 Nina requested for an update to the completion dates for abandoned blocks.

3.10 Previous dates submitted to KPKT no longer valid.  Dr Param wants Talam/TGSB to write and submit a realistic date to KPKT and reminded that this date(s) MUST be strictly followed. 

3.11 KPKT will inform the  details for the next meeting (to be held sometime 15^th March 2008) to discuss completion dates for the abandoned blocks.

7^th March 2008

14^th March 2008

Early April 2008

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Next meeting

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IJMC & Talam

IJMC & Talam

IJMC & Talam

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Talam

KPKT

4

4.1 Nina reminded the need for KPKT to closely monitor LP project to ensure that no more billings prior to stop works.  Purchasers felt cheated  and frustrated that work stopped in Nov 2007 after a billing in Oct 2007.  Purchasers cannot stop the bank payment release as they are bound by their SPAs and Section 176.

4.2 Dr Param re-assured that KPKT is constantly monitoring LP project via monthly meetings held at KPKT with Talam on all Talam’s troubled projects.  Last meeting between KPKT and Talam/TGSB was on 20 February 2008.

4.3 Dr Param informed that Mr Chow Wah shall be KPKT’s liason officer for LPRA to get updates.

4.4 Mr Quah clarified that the last billing has been paid into a HDA account (as required by KPKT regulations) held by IJMC and Talam/TGSB.  The  money has not been released.

4.5 Nina asked IJMC and Talam if the unreleased monies could be refunded to purchasers until works at LP resumed. 

4.6 Both Mr TS Tan and Mr Sonny indicated that it was not possible as billing was made in accordance to works already completed & certified by the architect.

4.7 Dato Lee suggested for KPKT to double certify LP project prior to release of progressive billings to purchasers.

4.8 Dr Param clarified that Dato Lee’s suggestion was not possible as project certification should be done by developer’s architect and it was not KPKT’s duty to perform works certifications.

4.9 Nina suggested if double certification was not possible, then the developer and IJMC to consider billing only after project is completed & handed over.

4.10 Mr Quah indicated that one billing was not possible as IJM had signed an agreement with Talam on progressive payments to be made in accordance to SPA Schedule.

4.11 Mr Quah added that all Talam’s projects were all negative income to Talam and it was not possible for them to survive with a single or fewer billings.  However, IJM have promised to do their very best to deliver LP project.  He said the fact that Talam was still around too showed Talam’s commitment to complete LP project.

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5

5.1 LP owner raised a concern on structural soundness of LP buildings since it had been abandoned for a long period.  Questioned if defect liability period could be prolonged.

5.2 Dr Param indicated that defect liability period for all new projects has been extended from 18 months to 24 months.  However, it does not apply to existing uncompleted projects.  Dr Param confirmed that any structural defects (if present), have a lifetime guarantee by the developer.

5.3 The next meeting will be informed by KPKT to all parties concerned.  It will be held sometime around 15^th March 2008 (to be confirmed by KPKT).

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ASAP

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KPKT