Not much savings in private funding model for Borneo highway, says minister

Not much savings in private funding model for Borneo highway, says minister

Works minister Fadillah Yusof says no decision has been made yet on any private sector initiative to complete the Pan Borneo Highway project.

The Pan Borneo Highway was initially slated to be completed this year. (Bernama pic)
PETALING JAYA:
The private finance initiative (PFI) under discussion for the continuation of the Sabah portion of the Pan Borneo Highway project may not generate much savings for the government, works minister Fadillah Yusof told Parliament today.

“There may not be any savings at all because there are compensation costs and others that need to be finalised now that the project delivery partner (PDP) model was cancelled.

“Whether or not there will be any savings, we can only see when the project is finalised,” he said.

The PDP model for the project was cancelled by the Pakatan Harapan government to save costs, pushing completion of the Sabah portion of the construction to 2023 and the Sarawak portion to 2022. It was originally scheduled to be completed this year.

Fadillah previously said the government would be opening the project to the private sector under a PFI.

Fadillah Yusof.

In an update today, he said there was no decision yet on any PFI for the project.

“That’s why any questions about additional costs have not been decided because it is still at the proposal stage. It is still under evaluation by the relevant government agencies.”

He said the government was open to proposals from the private sector for 19 remaining packages for the first phase of the project and also for Phases 2 and 3.

In July last year, the Perikatan Nasional government said it would not revert back to the PDP model for the highway project.

“The change in the model did not take into account several issues that are being tackled by the current government, including the impact on the management of the project, changes in contracts, the well-being of project workers, and the need to improve capacity and technical expertise,” Fadillah told Parliament last year.

“Therefore, a mitigation plan and continued follow-up actions are being done to improve the execution of the model put in place by the previous government.”

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