Sabah portion of Pan Borneo Highway said to be next on chopping block

PETALING JAYA (May 30): The Sabah portion of the Pan Borneo Highway, which is estimated to cost the federal government RM12.8 billion, will likely be the next project to be axed under the Pakatan Harapan government owing to “huge cost overruns”, reported The Star.

The 2,325km highway — along with other mega projects such as the mass rapid transit, light rail transit (LRT) extensions, LRT line 3 and the East Coast Rail Link — is in the crosshairs of the new administration as they seek to pare down the national debt and spending, with the first casualty being the Kuala-Lumpur high-speed rail.

“The bulk of the work in Sabah has not been carried out yet, which makes it easy to defer the project. In Sarawak, work on the ground in phase 2 between Miri and the border of Sabah has not been carried out yet,” a source told the daily.

The toll-free highway, which is scheduled for completion in 2021, runs through Sabah and Sarawak.

The 1,089km stretch in Sarawak starts from Telok Melano and ends in Merapok, near the Brunei checkpoint, and is followed by a further 1,236km in Sabah.

The Sabah portion of the project is divided into three phases, namely Sindumin to Tawau, Tamparuli to Ranau, and Kimanis to Keningau.

There are 35 work packages for the Sabah phases, with seven packages already implemented between April 2016 and December 2017.

Sources said 50% of work on the Sarawak portion of the highway has been done, resulting in cost savings of over RM1 billion.

CIMB Research had said the remaining packages with an estimated value of RM9.7 billion were expected to be awarded in 2Q18.

Of the seven that were awarded, five are already under construction.

Two more were approved and launched, while a further 10 are pending approval from the Finance Ministry.

However, sources said the five packages under construction are facing “huge cost overruns”, with the previous federal government already facing difficulties justifying the cost.

The Star said there was rampant speculation that the previous federal government was even considering giving the project to a Chinese company to complete it on a fixed-cost basis to curb swelling costs.

A source said currently, MMC Corp Bhd and UEM Group Bhd each had a 20% stake as the project development partner, while the remaining 60% was given to six private companies linked to the previous state government.

However, Pakatan Harapan politicians hope that the new federal government will continue the Pan Borneo Highway, which has an estimated cost of RM29 billion.

Sabah Chief Minister Datuk Seri Mohd Shafie Apdal said he was confident the project will continue while Sarawak Pakatan chairman Chong Chieng Jen said the project will go on, but the cost and contractors involved will be audited.