Is Hisniaga technically insolvent, as claimed by PAC?

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Hisniaga Denies Technical Insolvency and Project Delays

Hisniaga Sdn Bhd has refuted claims by Public Accounts Committee (PAC) chairman Datuk Nur Jazlan that the company is technically insolvent and that its project with Keretapi Tanah Melayu Bhd (KTMB) is delayed. The contractor stated that its financial performance in recent years contradicts the assertion of insolvency, and that the project's completion status has been misrepresented.
Financial Performance Contradicts Insolvency Claims

Hisniaga's managing director, Datuk Habib Ismail, directly addressed the accusation of technical insolvency, asserting its falsehood. He cited the company's 2014 annual financial report, which indicated a turnover of RM66.47 million and a profit of RM2.28 million. This follows a reported turnover of RM54.4 million and a profit of RM2.6 million in 2013, demonstrating continued profitability rather than financial distress.
Project Completion Status Disputed

Datuk Nur Jazlan had previously stated that the KTMB project, which involved shifting operations from Singapore's Tanjong Pagar to the Kempas Baru depot in Johor Baru, was delayed. The tender was signed in December 2011, with a due completion date of July 2013, and despite two extensions, Nur Jazlan claimed 99.3 per cent completion with only final track laying remaining. However, Habib Ismail countered that the company had requested a third extension until March 6, 2015, and that the project was "physically completed" at the time of the PAC chairman's statement.
Outstanding Certificates Cited for Final Completion

Habib Ismail clarified that while the physical work was concluded, the project was not yet 100 per cent finalized as it awaited the Certificate of Completion and Compliance and the Certificate of Fitness from the local council. He noted that obtaining these certificates is a bureaucratic process known to take time, which would explain the delay in formal project closure. Despite the alleged delay, KTMB is imposing Liquidated and Ascertained Damages of RM2.5 million on Hisniaga.

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Is Hisniaga technically insolvent, as claimed by PAC?

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