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Former minister disputes Guan Eng’s claim of RM3.1b Pan Borneo Highway savingsLatest 

KUCHING, Feb 7 — Datuk Seri Fadillah Yusof accused Finance Minister Lim Guan Eng today of misleading the public by saying the federal government will save RM3.1 billion after terminating the contracts of the Pan Borneo Highway’s project delivery partners.

The former works minister also insisted that Lim inflated the original price from RM16.5 billion to RM21.9 billion

“As with many of his exaggerated and downright false claims in the past, his latest statement that the government will save RM3.1 billion or 14 per cent by reducing the cost of the highway from RM21.9 billion to RM18.8 billion by canceling the existing project with the PDP is again misleading and deceitful,” Fadillah said in responding to Lim’s statement yesterday.

“Until now, the delivery schedule is well on track while costs have been well-contained,” he said.

Fadillah, who is the Petrajaya MP, recalled that the PDP had announced in March 2019 that it could achieve further cost savings of RM2 billion from the original target cost as a result of efficient design, cost and change control management.

“As such, the original target cost has further been revised downwards to RM15.13 billion currently, a figure that is well lower than Guan Eng's stated RM21.9 billion original cost and his downward revised cost of RM18.8 billion.

“The reason why the previous Barisan Nasional government had adopted the PDP model is due to its success in the MRT 1 project which was delivered below the original budget and within the targeted completion date.

“It is also a result of the previous government learning from past experiences,” he stressed.

With the PDP model, Fadillah said the awarded company is incentivised to keep within the target cost, adding that cost overruns will lead to expensive penalties in the form of fee reduction.

“That is also the reason why the state of Penang had adopted a similar PDP model for their RM46 billion Penang Transport Masterplan project.

“As it is, DAP does not have a stellar track record of meeting targeted cost and targeted completion dates for their infrastructure projects in Penang,” Fadillah said.

He said with the cancellation of the PDP model and the changes announced by Lim yesterday, the Sarawak highway project now runs a real risk of being delayed from its original targeted date of end 2021 and the risk of the project's cost being much higher than the current RM15.13 billion targeted cost.

“When that happens, all Sarawakians should know who is responsible,” he said.

At a press conference in Putrajaya yesterday, Lim said the federal government would take on the construction of the remaining 786.4km of the Sarawak’s stretch of the highway after the termination of the contracts with the PDP.

According to Lim, the decision to terminate the contracts would save some RM3.1 billion in costs, most of it from the removal of a 5.5 per cent service cost imposed by the PDPs.

He had said the RM3.1 billion gained in savings would be channelled back towards development and infrastructure projects in Sarawak to ensure proper socio-economic development in the state.

Source: Malay Mail