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Ensuring efficiency, accountability and transparency in PBHS contracts administration

Friday, 5 April 2019, Kuching – For a mega project the size of Pan Borneo Highway Sarawak (“PBHS”), ensuring efficiency, accountability and transparency in the project’s contract administration by Lebuhraya Borneo Utara (“LBU”) as the Project Delivery Partner (“PDP”) is important, more so when the project is funded by the Government.

Ensuring that every Ringgit spent is justified and worthwhile is foremost for the PDP and all Government agencies involved.

According to LBU’s Chief Executive Officer, Ir. Safuani Abdul Hamid, “The PDP model is most ideal for large infrastructure projects as the contract administration policies, system, format and procedures that we have in place does promote efficiency, accountability and transparency.”

“Coupled with a strong governance structure at various levels and solid support from the Federal and State Governments, the PDP model enables fast and decisive decision-making to meet project delivery targets.

“In the case of Pan Borneo Highway Sarawak, there is great anticipation from the Sarawak public for us to deliver this safe and efficient highway in the shortest possible time. In line with public demands for the project to be carried out in a fair and transparent manner, the PDP model allows for all this to happen, for the good of our State and Nation”, said Ir. Safuani.

At the heart of PBHS’ project execution is its pre and post-contract administration in which LBU as PDP awards and manages contracts, based on approved policies, with the various works package contractors.

PBHS works package contracts are all remeasured in nature as opposed to being lump sum contracts.

The important difference with remeasured contracts is that payments are made for actual value of works done based on quantities verified through a joint site measurement process conducted by multiple parties.

“In other words, contractors only get paid for actual works done on site. For the PDP, remeasured contracts are tied to meeting the Target Cost Key Performance Indicator. In this way, transparency and accountability are better achieved”, added Ir. Safuani.

The monthly progress payment claims evaluation process follows a stringent confirmation and verification methodology. It involves the consultants’ resident engineering teams (“RET”) on site, independent checking engineers (“ICE”), PDP’s own construction management team (“CMT”) along with the Government’s representatives, Sarawak’s Public Works Department (“JKRS”) and Ministry of Infrastructure Development and Transportation (“MIDT”).

Remeasured contacts are the preferred form of contract for a road project such as PBHS where there is a high degree of uncertainty for some works, particularly for “below ground” activities, such as pile lengths, foundations, rock excavation, replacement of unsuitable material, slope stabilization, etc.

Remeasured contracts are seen as fair. The Owner through the PDP assumes the risk for total quantities; whilst the Works Package Contractor assumes the risk for fixed unit prices