A-G flags weak execution, violations in Pan Borneo Highway project in Sabah

The auditor-general’s (A-G) report has flagged multiple weaknesses in the planning and execution of the Pan Borneo Highway project in Sabah, as well as violations of guidelines and regulations.

As of March 31, it said, the project remained incomplete 10 years after planning, despite its management changing hands from the delivery partner to the works ministry in September 2019.

The A-G found that work sites were not fully prepared when the project began, with RM144 million in compensation still unpaid and 99 structures yet to be demolished under Phase 1A of the project.

Under Phase 1B, RM84 million in compensation remains owed while 3,360 structures need to be demolished.

The report also found that variation orders worth RM513.99 million were approved beyond the authorised approval limit, while 19 project packages started work before their environmental impact assessment reports were approved.

There were also price disputes over 13 items under 10 variation orders worth RM60.87 million.

“The evaluation of variation orders should be finalised based on contract terms, while contractors should be required to carry out the variation order while the dispute is being settled,” it said.

In terms of contract management weaknesses, the A-G’s report said the government had to cover RM32.95 million in cost differences from the pricing of preliminary works, insurance and performance bonds.

Some RM164.64 million in payments were also made in a disorderly fashion due to delays in completing the contract documents, it added.

The A-G’s report recommended improving SOPs for the project and the closer monitoring of its overall planning and execution.

Pan Borneo in Sarawak nearly complete

On the other hand, it said the Pan Borneo Highway in Sarawak was nearly done, with 10 work packages finished and the Lambir package 99.9% complete.

“Overall, the project has yielded positive impact by boosting economic and social activity along the project’s corridor,” it said, adding that RM18.839 billion of the RM18.864 billion allocated had been spent as of March 31.

However, it said there were some weaknesses and inefficiencies in project management and contract governance.

It said the works ministry and state works department had yet to submit RM1.78 billion in claims to four utility companies over the transfer and reinstallation of various utility infrastructure.

The Julau layby and Sungai Arip rest stops, which cost RM2.38 million and RM17.8 million respectively, are also not yet in use.

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