Libyan unrest forces Ranhill to terminate US$1.2b housing project

KUALA LUMPUR: RANHILL BHD [] has terminated its US$1.2 billion housing project in Tajura, Libya as a result of the force majeure of events in that country.

It said on Monday, Aug 15 that its subsidiary, Amona Ranhill Consortium Sdn Bhd had on Aug 14 served a notice of termination on the Housing Infrastructure Board (HIB) of Libya to terminate the contract to build 10,680 housing units.

Ranhill said that it had evacuated its workforce and suspended work on the project since February of this year when the social and political unrest started in Libya.

It said since March 2011, Libyan government forces had been occupying the project and that it had no access to the worksite.

“The combination of these events has meant that it has proved impossible for Ranhill to obtain access to the site and to resume work for a period of nearly 6 months.

“In addition, there is no evidence to suggest that position is likely to change in the foreseeable future,” it said.

On the financial and legal impact of the termination of the contract, Ranhill said that in view of the continuous unrest in Libya, it was still unable to ascertain the financial impact of the termination with certainty.

However, it said the termination did not affect its ability to negotiate its claims for time and money which were under consideration by the HIB at the time the project was suspended in February 2011.

“The termination was based upon legal advice received that terminating the contract as a result of the ongoing social and political unrest in Libya was lawful and did not contravene Libyan law.

“On this basis, Ranhill does not envisage any legal effect on the termination,” it said.

The project was originally slated to be completed by February, 2013.

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