Thursday, 7 November 2019, Kuching -- Today, there have been several media reports on Minister of Works Malaysia, YB Baru Bian, highlighting the plight of our Pan Borneo Highway Sarawak works package contractors (WPCs) who claim to have experienced delayed payment, on average up to three months, by LBU.
Let’s take a step back to understand the payment process put in place by the Government to ensure fairness, transparency and efficiency of delivery for this mega project. The payment process has been clearly stipulated in the Project Delivery Partner Agreement, which has been duly informed and advised to all WPCs since the start of the Project.
Being the Government’s Project Delivery Partner (PDP), the payment process begins with the Verification stage. LBU together with the supervising consultants review the Interim Payment Applications (IPA) from WPCs. It is a thorough and detailed process to check all necessary documents in support of WPC claims before a provisional Interim Payment Certificate (IPC) can be issued by LBU.
Next is the Certification stage where the interim IPC is sent to the Government agencies for checking and review. If everything is good, then provisional IPC is deemed to have been accepted by the Government.
However, with a mega project of this scale in which every works package contract is in excess of RM1 billion, the monthly claims are large and many in numbers. Governance dictates that all claims have to be checked carefully to ensure that what is paid is really for works done on the ground. There are often cases where corrections or amendments have to be made. This can delay the Government’s certification of the interim IPC.
Finally, we come to the Payment stage. On LBU’s part, upon receiving payment from the Government, LBU has successfully cut down the process to just 1 day, from a previous 7 days, to disburse payment to the WPCs. After all, it is in everyone’s interest that our WPCs get paid fast, in recognition of the project’s progress.
Updates on payments status are a regular agenda in the Project’s coordination meetings with our Government stakeholders. Even the Minister of Works had been briefed several times on the payments process and status.
As to the issue of alleged payment delays - specifically July – according to LBU, payment is not delayed and is expected to arrive around this time per the agreement with the WPCs. Two of the 10 WPCs have already received payment; the balance WPCs will be paid as soon as LBU receives payment from the Government.
According to LBU CEO, Ir Safuani Abdul Hamid, “For any public project which involves taxpayers’ money, such as Pan Borneo Highway, we have an obligation to make sure that every single Ringgit spent is accounted for. It is our duty to comply strictly to this elaborate governance process as we hold the responsibility to deliver the project in a transparent and accountable manner.”