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Uncertainty over PDP status

KUCHING: Uncertainty over the role of Lebuhraya Borneo Utara Sdn Bhd (LBU) as the project delivery partner (PDP) of Sarawak Pan Borneo Highway project has hindered the progress of the highway construction.

An official from LBU said the company has yet to receive any notification of termination as the project PDP as reported by some media.

The decision to pull the plug on the PDP agreement for Pan Borneo Highway was reportedly said to have been made by the federal cabinet earlier this month.

“For LBU, months of market talks of changing the project’s implementation model has been most disruptive to a set-up designed and agreed by the government to deliver 786km of the Pan Borneo Highway across Sarawak.

“Rumours in the market got all parties involved in the project jittery. It certainly affected the good rate of progress achieved in the previous months. This is very sad as all this disruption may affect the continuation and overall completion of this highway,” LBU said in a statement yesterday.

The Sarawak portion of the highway is 45% completed.

Works Minister Baru Bian was recently reported as saying that his ministry could bring down the project’s cost should the federal government take over the project from the PDP.

It was also reported that based on a fee of 5.5% of the project cost that has to be paid to the PDP under the contract agreement, the PDP model cost the government some Rm 907mil based on the project cost of Rm 16.49bil.

LBU, which is linked to Sarawak tycoon Tan Sri Bustari Yusof, was awarded the contract in June 2015.

Bustari is the brother of then Works Minister Datuk Seri Fadillah Yusof.

The Sarawak Pan Borneo Highway project was awarded in 11 work packages, most of which involved 70:30 joint ventures between Sarawak’s leading construction companies with listed construction firms from Peninsula Malaysia.

LBU said although market talks of the PDP’S termination had surfaced since the change of federal government 16 months ago, it had anticipated this would not happen after having achieved potential savings of Rm2bil and driving its contractors to meet their respective project progress timelines.

Each work package ranges from 60km to 95km ,and the mainline comprises of 115 pairs of bridges across rivers, 25 interchanges, traffic barriers, road signages, overhead pedestrian bridges, rest and service areas, lay-bys and bus shelters.

“The cost per kilometre for road works of Pan Borneo Highway Sarawak is estimated at Rm 15.97mil, covering utilities’ relocation and road furniture across varied 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 be Rm 19.36mil.”

Some of the sections have achieved between 55% and 63% completion while the section of Batang Rajang (Durin) bridge in Sibu has achieved 87.2% completion.

The first package – the Telok Melano-sematan stretch – has been completed ahead of scheduled early this year and below target costs.

“As at end-august 2019, over 160km of Pan Borneo Sarawak’s first of two carriageways has been partially completed to divert ‘live’ traffic, thereby allowing road users a more comfortable driving experience whilst the highway is under construction.

“By end-2019, it is expected that a total of 395km of the first carriageway will be opened to traffic. At the same time, works will continue unhindered on completing the second carriageway,” it added.

LBU said to ensure a maximum 30% participation of Sarawak bumiputra in this mega infrastructure project, LBU had introduced the bumiputra participation programme.

“Today, that target has been exceeded, with 32.34% of the total contract value, where an equivalent of over RM5.2 bil of works is identified to be allocated to Sarawak bumiputra contractors of various grades and capabilities.”

The company said should the federal government take over the remaining construction stage, it is hoped that the highway would be completed on time, (which is slated for full completion in Dec 2021) within cost and quality standard.

The RM16.49bil project was launched in 2015.

Source: Star Business