KUALA LUMPUR (Oct 19): The Works Ministry has rejected claims that delays in the Sabah Pan Borneo Highway project stem from the government’s failure to pay contractors on time.

Instead, delays are mainly due to contractor-related issues and the change in the project's delivery model, according to Deputy Works Minister Datuk Seri Ahmad Maslan.

“There is no problem with the finances. However, some contractors are facing problems. That is true, and I do not deny it,” he told the Dewan Rakyat on Monday. 

Ahmad was responding to a query from Kota Marudu member of Parliament Datuk Wetrom Bahanda on whether the project’s delay is due to the government’s failure to pay contractors on time. 

The 706km Phase 1 Sabah Pan Borneo Highway project is expected to be fully completed by 2030, nine years later than its original completion date of end-2021.

Phase 1A of the project, comprising 15 work packages, was scheduled to achieve 96.23% physical progress, but is only at 89.54%, according to the ministry. Progress payments stand at 88.78%.  

For Phase 1B, comprising 19 work packages, scheduled progress is 24.76%, while physical progress stands at 25.53%. Payments are scheduled at 20.73%, but the government has already paid 22.11%.

“So, there is no issue in terms of payments,” Ahmad noted. 

Other challenges faced by the project include weather conditions, challenges in land acquisition, utility relocation issues and problems arising from the Covid-19 pandemic, he added.

A major contributor to the delay was a change in the project’s delivery model to the conventional contractor model from the initial project delivery partner model, which was terminated in 2019.

With the transition, the project required a reassessment of remaining works and project scope, resulting in the ongoing delay, as well as project cost ballooning to RM24.89 billion from RM12.86 billion previously.

Borneo Highway PDP Sdn Bhd, a joint venture between UEM Group Bhd and MMC Corp Bhd, was the original project delivery partner before the termination, ostensibly on the grounds of national interest.

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