This article first appeared in The Edge Financial Daily on September 20, 2019
KUALA LUMPUR: Lebuhraya Borneo Utara Sdn Bhd (LBU), the project delivery partner (PDP) for the Sarawak portion of the Pan Borneo Highway, is hoping that the infrastructure project can be completed using the PDP model.
In a statement, LBU said it had forecasted that the construction model would not be changed.
“Market talk of termination of the PDP surfaced following the change in government in mid-2018. LBU had anticipated that it would not be terminated after having achieved a potential savings of RM2 billion and driving its contractors to meet their respective project progress timeline,” it said.
The company added that it had worked closely with both the Sarawak and federal governments on all aspects of the project delivery such as design, planning, governance, procurement, monitoring progress, ensuring quality, capacity building and bumiputera participation.
LBU explained that as a PDP, it acts as a partner and an extension arm of the government.
“You cannot do as you like. The government is the decision-maker; PDP does the groundwork and drives implementation,” it said.
The PDP noted that the first phase of the Pan Borneo Highway in Sarawak involves the construction of a four-lane dual carriageway, measuring 786km in length from Telok Melano to Miri. The construction has been divided into 11 work packages, which comprise 25 individual sections.
As at the end of August, over 160km of the Sarawak Pan Borneo Highway’s first two carriageways have been partially completed to divert live traffic. It was forecasted that by the end of the year, a total of 396km of the first carriageway will be opened to traffic.
“At the same time, work will continue unhindered on completing the second carriageway,” the PDP said.
As at Aug 25, overall actual work progress by work package contractors (WPCs) for the 25 sections had reached an average completion rate of 45%, with some sections 55% to 63% completed.
LBU highlighted that the section of Batang Rajang (Durin) Bridge under WPC 07 in Sibu was 87.2% completed as at end-August.
LBU explained that each work package ranges between 60km and 95km in length and the mainline consist of 115 pairs of bridges, 25 interchanges, traffic barriers, road signage, overhead pedestrian bridges, rest and service areas, lay-bys, and bus shelters.
“The cost per kilometre for roadwork on the Pan Borneo Highway Sarawak is estimated at RM15.97 million, covering utilities relocation and road furniture across various terrain, including deep foundations and soft ground conditions mainly found in central Sarawak. Inclusive of costs to construct bridges and interchanges, the cost per kilometre would then be RM19.36 million,” noted the company.
The main contractors undertaking the work were pre-qualified based on pre-set and agreed-on technical and commercial selection criteria.
LBU said it has seen Sarawak bumiputera participation exceed 32.34% of the project’s total contract value, equivalent to RM5.2 billion of work having been identified to be Sarawak bumiputera contractors.
“Rumours in the market got all parties involved in the project jittery. It certainly affected the good progress rate achieved in previous months. This is very sad as all this disruption may affect the continuation and overall completion of the highway,” the PDP opined.
In a report on Sept 6, sources had indicated to The Edge Financial Daily that the government had moved to terminate the PDP model for the Sarawak stretch of the Pan-Borneo Highway citing cost saving.
The decision to terminate the PDP agreement was made after the cabinet’s deliberation at a meeting a few days prior.
The highway is slated for completion by the end of December 2021. Works Minister Baru Bian indicated that as of July this year the first phase of the Pan Borneo Highway in Sarawak was 45% completed, ahead of the scheduled completion rate of 43%.