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First Reit 'optimistic' about resolving road subsidence issue near Surabaya hospital
FIRST Reit on Monday said it is “optimistic” about reaching a resolution regarding the road subsidence that happened along Surabaya's Gubeng Highway, near Siloam Hospitals Surabaya, in December 2018.
First Reit had sold a portion of the land adjacent to Siloam Hospitals Surabaya to PT Lippo Karawaci Tbk to develop a new hospital in 2015. The new facility to be developed was to be an improved healthcare facility to replace the existing ageing Siloam Hospitals Surabaya.
But the road subsidence was found to have had a serious impact on the development works, which are no longer progressing. The manager has commissioned tax consultants, development and construction-related consultants, legal counsel and valuers to carry out feasibility studies, which are ongoing, to determine the possibility of conducting future construction works on the site.
Under a clause in its agreement, First Reit has the right to terminate the deal if the works remain uncompleted by June 28, 2020. Given that the works are no longer progressing, the manager plans to terminate the agreement and has been in active talks with stakeholders to this end.