KUALA LUMPUR (June 12): Cypark Resources Bhd said it is pursuing an amicable settlement with the government over its claims relating to a landfill site closure project notwithstanding the arbitration process it has initiated.

"In the event that an amicable settlement is reached between the parties, the company will withdraw the [arbitration] proceeding," Cypark said in a bourse filing on Monday (June 12).

According to the company, it had to commence the arbitration proceedings to protect its interest as the claim is subject to the statutory limitation period in which the company will lose its right to make a claim from the government beyond six years.

Last week, Cypark announced that it had commenced arbitration proceedings against the government, Ministry of Local Government Development, National Solid Waste Management Department (JPSPN), and the director general of JPSPN over an additional RM61.34 million claimed by the company due to delays in the completion of the safe closure of 16 solid waste disposal sites in Peninsular Malaysia.

In its filing on Monday, Cypark reiterated that it had to incur substantial loss and expenses as the government had issued various instructions during the construction period, which caused a long delay to the completion of the project. The original contract sum was RM483.08 million.

It was agreed that the possession of sites related to the contract would be given on Aug 24, 2009, with the contract’s original completion date being Nov 23, 2011. However, the government later issued a Certificate of Practical Completion certifying the completion of the whole contract works on Dec 23, 2015.

Cypark said that due to the delays and losses, the company submitted notices and finalised claims on Jan 3, 2022, but there was no response from the government, leading to the commencement of the arbitration proceedings.

“The arbitration is not expected to have any operational impact on the company. At the same time, if the outcome of the arbitration is in favour of the company, it is expected to enhance the company’s cash flow position.

“However, if the outcome of the arbitration is not in favour of the company, the carrying value of the contract assets related to this project may be subject to impairment,” it added in its filing.

Cypark’s share price closed two sen or 3.17% higher at 65 sen on Monday, giving the company a market capitalisation of RM508.41 million.