Finance Minister Lim Guan Eng speaks after witnessing the signing of a new agreement involving the Pakatan Harapan federal government, the Sarawak government and Danainfra Nasional Berhad February 6, 2020. ― Picture by Yusof Mat Isa

PUTRAJAYA, Feb 6 — Finance Minister Lim Guan Eng announced today the termination of its deal with the project delivery partners (PDP) for the remaining 786.4km portion of the Pan Borneo Highway in Sarawak as the government will take on the construction directly.

Lim said the decision will 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.

“With the termination of the PDP agreements, the overall financial implications to implement the project has been reduced with a total savings of RM3.1 billion, which comes up to 14 per cent from the estimated financial implications before the termination of the PDP agreements.

“The estimated financial implication to the government with the involvement of PDP companies before this was at RM21.9 billion where are the estimate for the financial implications once the PDP agreements are terminated us around RM18.8 billion,” he told reporters at his ministry here after witnessing the signing of a new agreement involving the Pakatan Harapan federal government, the Sarawak government and Danainfra Nasional Berhad.

Lim said the termination means Putrajaya would be handling the highway project fully by issuing tenders and allocation for construction, which will be supervised by government appointed representatives in the Sarawak Public Works Ministry.

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

He gave an assurance that the Finance Ministry and the Works Ministry will ensure the best outcome possible, when asked about about the possibility of the PDPs taking legal action against the government for the termination.

“We got the views of the Attorney General’s Chambers also when considering this decision, so we are confident in the matter,” said Lim.

Also present at the ceremony was Works Minister Baru Bian, Deputy Finance Minister Datuk Amiruddin Hamzah, and deputy minister of Trade and Consumer Affairs and Sarawak Pakatan Harapan Chairman Chong Chieng Jen.