Lung Ming Green Energy Technology Engineering (TPE:3018) has received a letter from the Bade Minimum-Security Prison, under Taiwan's Ministry of Justice, imposing NT$3.31 billion in penalties for delays in a prison construction project, according to a Monday filing to the Taiwan stock exchange.
The company was awarded the project in November 2019 for a total contract value of NT$2.40 billion. According to the letter, the first phase was delayed by 1,506 days, resulting in a penalty of NT$2.25 billion, while the second phase was delayed by 1,185 days, with a penalty of NT$1.05 billion.
Lung Ming said it has objected to the number of overdue days and the penalties imposed, saying that under the contract, the maximum penalty for late completion is set at 20% of the total contract price, amounting to NT$480.7 million.
The company also claimed that the agency of corrections still has to pay NT$235.2 million in outstanding amounts.
The parties are currently undergoing mediation before Taiwan's Public Construction Commission, and the final penalty amount is subject to the outcome of the mediation, it said.