KUALA LUMPUR (May 26): The federal government will bear the land acquisition cost totalling RM2.8 billion to construct the 2,239km Pan Borneo Highway connecting Sabah and Sarawak.

Deputy Works Minister Datuk Rosnah Abdul Rashid Shirlin said this cost includes the cost of resolving caveat or objections in acquiring the land.

"The cost to reclaim the land including the cost to resolve problems on the land for the total stretch of Pan Borneo Highway Sabah is estimated at RM2 billion, while (the cost) for Pan Borneo Highway Sarawak is RM800 million.

"These costs will be fully borne by the government," she told the Dewan Rakyat today.

She said this in responding to Sarikei MP Wong Ling Biu, who has asked the government to state the compensation rates for crops and lands that are affected by the Pan Borneo Highway project and the basis of assessment made for the lands involved.

She said the land acquisition process and compensation rates to the land owners will be carried out by the Sabah and Sarawak state governments through respective land agencies.

The land acquisition including compensation value is made based on the provisions in the existing land legislation, namely Sabah Land Ordinance 1930 and Sarawak Land Code 1958.

"The land owners, who have the ownership documents, will receive compensation based on the assessment of the current real estate market prices.

"For the residents with land ownership based on the Native Customary Rights (NCR), the land compensation value, including the cost of building structures and plantations, will also be made based on the current value determined by the state land department," Rosnah said.

She said the state governments have agreed to consider ex gratia payment for the squatters and their plantations on government owned lands.

The first phase of Pan Borneo Highway in Sabah involving a 706km stretch from Sindumin to Tawau will be fully completed by Dec 31, 2021.

The first package of the 706km involving an 11.7km stretch from Papar to Dondongan has begun last month.

It was reported that the Pan Borneo Highway in Sabah will cost RM13 billion compared to RM16 billion for the 1,090km stretch in Sarawak.

Meanwhile, Works Minister Datuk Seri Fadillah Yusof is reported as saying that the second phase of the Pan Borneo Highway, from Tanjung Datu up to Miri, will be launched in September this year; while the third phase, from Lawas to Limbang, will commence in 2018.

The whole project is expected to be completed by 2025.