Integrated Marine Works Sdn Bhd's 15-year concession agreement for port dredging and reclamation works is believed to have been terminated by the Ministry of Transport with immediate effect for failing to remedy default in certain payments, according to a source.

KUALA LUMPUR (June 11): The Ministry of Transport (MOT) is believed to have terminated a 15-year concession agreement for port dredging and reclamation works with Integrated Marine Works Sdn Bhd (IMW) as the company has failed to remedy default in certain payments, according to a source.

It is understood that the termination notice has been issued to the company on Tuesday, effective immediately.

IMW will not be entitled to any form of compensation following the termination, according to the source familiar with the matter.

IMW was granted a 15-year extension of its concession to provide dredging and reclamation works at all federal ports owned by the government in May 2022.

Federal ports owned by the government include Port Klang, which is made up of Northport and Westports in Selangor; Port of Tanjung Pelepas and Johor Port in Johor; Penang Port; Teluk Ewa Port in Langkawi; Tanjung Bruas Port in Melaka; Kemaman Port in Terengganu; Kuantan Port in Pahang; and Labuan Port.

The new concession agreement was signed after the conclusion of the previous 15-year concession granted to IMW that began in 2004.

During the initial concession, it was noted that IMW had completed 247 projects in accordance with the guidelines and specifications set by the MOT, and the projects were completed timely. The company had also constructed three dredger ships, namely Inai Ixora, Inai Liatree and Inai Kenanga in its own shipyard in Pulau Indah, Selangor during the period.

The Edge Weekly last month reported that IMW had fallen into financial distress, resulting in receivers and managers AdamPrimus & Co PLT being appointed by Malayan Banking Bhd (Maybank) to get back monies owed to the bank.

It was noted that the government had already suspended IMW's concession at the time.

IMW is wholly owned by private company Inai Kiara Sdn Bhd.

According to filings with the Companies Commission of Malaysia (CCM), IMW chalked up an after-tax profit of RM265,751 on a revenue of RM41.78 million in revenue for its financial year ended Dec 31, 2021 (FY2021).

IMW had total assets of RM191.9 million and total liabilities pegged at RM138.99 million, out of which more than 93% or RM129.84 million were current liabilities.

IMW had retained earnings of RM47.91 million as at end-2021. The company, according to the CCM filing, had charges of RM582.8 million with Maybank in March 2017.