The termination of the PDP – Lebuhraya Borneo Utara Sdn Bhd (LBU) – has generated savings of up to 40%, worth RM3.1 billion. The new cost of the project had been reduced to RM18.8 billion, from an initial RM21.9 billion, he said.
Baru added that negotiations on a compensation settlement with the previous PDP were proceeding.
“At this stage, we have not come to a settlement yet. Definitely there will be some claims, even a possibility of a loss of profit and maybe many more. We will look into it under the agreement. Whatever claims that is legal, lawful or legitimate, we will look into it, we will honour it,” he said.
He was speaking at a press conference after witnessing a signing ceremony for a new project funding agreement for the highway project between the federal government and Danainfra Naisonal Sdn Bhd.
The decision to terminate the PDP was made at a Cabinet meeting last Sept 4.
The management of the remainder of the project will be done conventionally under the federal government. It will be coordinated by the Public Works Department (JKR).
The government decided it will oversee 11 packages of the Sarawak Pan Borneo highway – which stretches 786.4 km – without a PDP.
Under the previous project funding agreement, the government was subject to pay a 5.5% commission to the PDP.
Meanwhile, Finance Minister Lim Guan Eng said savings generated from this exercise would be channelled back to Sarawak after deducting any possible cost overruns, to fund other infrastructure and development projects for the state.
Speaking of the possibility of the government introducing a stimulus package to offset the global economic downturn, Lim said announcements on the matter would be made after a presentation to the Cabinet.
However, he did not disclose the date for the presentation or the announcement.
He added: “There is no risk of recession for Malaysia. We want to ensure economic sustainability.”
Previously, Lim had said that the government might consider introducing an economic stimulus package if the global economy worsened in 2020.
He said the matter had been discussed at Cabinet meetings before and after the tabling of Budget 2020.