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PBH project now under government

Shafie (centre) with other VIP guests at the launch of the Heart of Borneo Conference on Thursday.

22nd March, 2019


KOTA KINABALU: The ongoing Pan Borneo Highway (PBH) project in Sabah will be undertaken by the government after the service of the project delivery partner (PDP) was terminated.

The decision made by the federal government to end the PDP’s overseer role, was confirmed by Chief Minister Datuk Seri Shafie Apdal on Thursday.

Shafie was commenting on a news article which appeared in The Edge Financial Daily that the project will be taken over by the Works Ministry, with turnkey contractors recruited to replace the PDP on remaining construction work on the Pan Borneo Highway.

“Through discussions with our federal counterparts in Kuala Lumpur, I think we’ve reached an agreement on certain approaches to ensure we can expedite construction period and manage how we build roads without the involvement of private sectors like the PDP,” said Shafie.

He highlighted the Sabah Government has discussed the matter in detail with Finance Minister Lim Guan Eng and Minister of Works, Baru Bian.

According to Shafie, he expressed hope the new approach would soon be implemented to speed-up construction of the multi-billion ringgit PBH project.

In the news report, the federal government has decided to take over the project due to cost overruns under the PDP structure which noted that the aim was to halt awarding projects through the PDP model which is less cost-efficient.

“It doesn’t matter who’s getting the job,” said Shafie. “What’s more important is that the roads are built, so people can use it,” he told reporters after launching the Heart of Borneo Conference here.

He further questioned how could a private entity such as the PDP, be left to manage RM16 billion of project funds, underlining the need for greater transparency and accountability. “It’s time for government departments such as the Public Works Department, the Finance Ministry and other state and federal agencies to be involved in the project,” added Shafie.

The Ministry of Infrastructure Development through its Minister, Datuk Peter Anthony declared the Sabah government is capable of taking over the project which would save up to RM2 billion in construction cost.

Sabah first kickstarted its first phase of the project in April 2016, with 35 work packages worth RM12.8 billion to build 706km of roads from Sindumin in Southwest Sipitang to Tawau in the east coast.

Borneo Highway PDP Sdn Bhd (BHP) is currently the PDP for the 706km Sabah portion of the highway, whereas Lebuhraya Borneo Utara Sdn Bhd (LBU) is the PDP for the Sarawak portion.

BHP is 60%-owned by Warisan Tarang Construction Sdn Bhd, with the other 40% is held by a joint venture between UEM Group and MMC Corp Bhd.

The Sabah portion is expected to be completed in 2023. The toll-free Pan Borneo Highway was launched by former prime minister Datuk Seri Najib Tun Razak in March 2015.

Meanwhile, the 1,060km Sarawak portion has seen 11 project packages handed over to contractors, with works expected to complete in 2021.

The construction of the Sabah portion of the Pan Borneo Highway is scheduled for completion by 2025 in Sabah, while in Sarawak the completion date is set at 2023, for the construction of dual carriageways totalling 2,350km.

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