PBA Holdings Bhd (PBAHB) has filed a RM400 million claim against Impian Mawar Sdn Bhd over alleged breach of contract and negligence involving an unfinished reservoir construction project in Seberang Perai, Penang.
The Penang state listed entity said its wholly-owned subsidiary, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP), commenced legal proceedings against Impian Mawar at the Penang High Court on May 13, 2026.
The dispute relates to rock extraction and reduction works required for the reservoir’s construction, which were originally scheduled for completion by Nov 30, 2012.
PBAPP alleged that despite granting several extensions totalling 93 months, extending the completion deadline to Aug 31, 2020, Impian Mawar had completed only approximately 69% of the contracted works.
Under its statement of claim, PBAPP is seeking approximately RM400 million in completion and replacement costs, subject to verification and expert assessment.
The water utility operator is also claiming liquidated ascertained damages (LAD) of RM3,000 per day, alongside general, aggravated, exemplary or punitive damages, interest and legal costs.
However, Impian Mawar filed a counterclaim against PBAPP on July 28, 2026, seeking approximately RM68 million in damages.
The contractor alleged that PBAPP had failed to properly consider its application for an extension of time before issuing termination notices.
It also claimed that the termination notices did not comply with the procedural requirements stipulated under the construction contract.
Impian Mawar is seeking declarations that the contract termination was wrongful and that PBAPP had breached its contractual obligations.
The contractor is additionally seeking the repayment of RM4.45 million in royalty fees paid to the District and Land Office, together with damages for alleged reputational harm.
PBA Holdings said the ultimate financial impact of the litigation cannot be ascertained at this stage, as the court has yet to determine either PBAPP’s claim or Impian Mawar’s counterclaim.
The company added that the legal proceedings are not expected to materially affect the group’s day-to-day business operations.
According to PBA Holdings, PBAPP’s solicitors believe the subsidiary has reasonably strong prospects of succeeding in its claim, citing the contractor’s failure to complete the works despite multiple extensions.
Its legal advisers also believe PBAPP has reasonable prospects of defending the counterclaim, although the validity of the termination procedures remains subject to evidence presented at trial.
PBAPP filed its reply to Impian Mawar’s defence and its defence against the counterclaim on Aug 20, 2026.
