Fiji News From Around The World

Illustration of FHL Tower cost debacle

FHL Tower Investment Faces Cost Controversy Amid COVID-19 Challenges

Spread the love

China Railway First Group (CRFG), the contractor for the FHL Tower project located in the center of Suva City, has submitted variation claims amounting to $40 million to Fijian Holdings Ltd (FHL). This figure represents almost 60% of the original contract cost due to challenges posed by the COVID-19 pandemic, which severely impacted construction timelines.

In a recent annual general meeting held in Lami, FHL’s Chief Executive Officer Jaoji Koroi addressed concerns from shareholders regarding claims that the project’s costs had doubled since initial agreements. According to Koroi, the project was originally contracted for $62 million. However, during the pandemic when many contractors globally halted their operations, FHL made the strategic decision to continue with CRFG to prevent further project delays.

While CRFG put forth a variation claim of $40 million, FHL’s thorough evaluation led to the decision to approve only $12.5 million of that claim. This adjustment raises the total authorized expenditure to $74 million for the project, reinforcing Koroi’s assertion that the allegations of the contract value doubling are inaccurate.

Encouragingly, Koroi noted that FHL has already received Letters of Intent from prospective tenants for 85% of the building, showcasing strong interest and potential for the project’s success. This development highlights the significance of the FHL Tower as FHL’s “single largest investment” since construction commenced six years ago.

In summary, while the FHL Tower project has faced challenges and financial claims, the company remains optimistic about the future occupancy and success of the building, which reflects a resilient approach in difficult times.


Comments

Leave a comment

Latest News

Search the website