KUALA LUMPUR (May 28): Piling and engineering specialist Ikhmas Jaya Group Bhd said today it has surrendered an RM198.98 million project to upgrade the Kajang Hospital, in Selangor, back to its client, after having been requested to do so on Monday.

The project was awarded by Naluri Rezeki Sdn Bhd to its unit, Ikhmas Jaya Sdn Bhd (IJSB), which was appointed the turnkey contractor for the project in April last year.

Ikhmas Jaya told Bursa Malaysia in a stock exchange filing this evening that IJSB has not started the sub-contract work other than having erected partial site hoarding and performing minor site cleaning works, together with renting a shop lot as a site office.

“Upon mutual agreement, NRSB had reimbursed IJSB RM700,000 for all the expenses incurred by IJSB for the project. The surrender of the sub-contract work is because of the increase in risk exposure due to escalating construction costs resulting in lower returns to the group,” it added.

Separately, Ikhmas Jaya announced it has bagged an RM15.28 million sub-contract from Wego Sinkong Construction JV Sdn Bhd, for construction works on a secondary school in Perak.

The project entails building, external works and mechanical and electrical works of Sekolah Menengah Tahfiz Darul Ridzuan, in Tambun. IJSB had agreed and accepted the terms and conditions of the letter of award dated May 27, it said.

The contract will be for 16 months and is expected to contribute positively to Ikhmas Jaya’s earnings and net assets for the financial year ending Dec 31, 2019.

Ikhmas Jaya shares settled unchanged at 17 sen today, giving it a market capitalisation of RM92.71 million. In the past year, Ikhmas Jaya's shares have retreated 32%.