This article first appeared in The Edge Financial Daily on August 3, 2018

KUALA LUMPUR: Putrajaya will be reviewing the awarded contracts in relation to the Pan Borneo Highway for both Sabah and Sarawak due to the government’s “tight financial capabilities”, according to Works Minister Baru Bian.

“We will consult with the ministry of finance (MoF) to appoint an independent consultant firm to study the contracts’ overall scope and costing,” Baru told reporters at the parliament lobby here yesterday.

“We want to minimise the cost and maximise its benefits,” he said, adding that the consultants will be presenting their views two weeks after their appointment.

He highlighted that the works ministry will be finalising the review on the scope and costing of the packages by September.

“We are just listening to the people, and there are some who thinks it (the cost of the highway) is too high. This is why the government is trying to relook and recheck [the cost],” said Baru.

Nevertheless, he stands firm on his stance that there will be no change in contractors. “Once they have been engaged and signed the agreement, we can’t replace them. That is a matter of law; they are bound by the contract,” said Baru.

On July 23, The Edge Malaysia weekly reported, quoting Baru, that the federal government would honour all existing contracts for the RM29 billion highway project, unless there are issues raised against them.

“Of course, as I look at it, once the letter of award is given and contract signed, basically we can’t do much. But if there is any possibility of agreeing [with the contractors involved] to reduce the expenses, why not? These are all possibilities being explored,” he was also quoted as saying.

The government’s scrutiny of the 2,325km highway, which would span the northern coast of Borneo island across Sabah and Sarawak, is part of a wider review of all infrastructure projects by the works ministry.

The Sarawak portion is managed by project delivery partner (PDP) Lebuhraya Borneo Utara Sdn Bhd, while the Sabah component is managed by Borneo Highway PDP Sdn Bhd.

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

Yesterday, Baru also said the ministry will be engaging with the consultant firm to study the costing for the remaining 23 packages of the highway project, which have yet to be awarded.

When asked if the project has been delayed, Baru said a few work packages in Sabah have been delayed, but declined to disclose the status of those in Sarawak.

Earlier in Dewan Rakyat, he said only 12 packages have been awarded from a total 35 work packages. Completion rate of the 12 awarded packages ranges between 1% and 36%.

Baru was responding to Kota Kinabalu member of parliament Chan Foong Hin’s query regarding the status of the construction of the Pan Borneo Highway in Sabah.