Pan Borneo Highway project costs has overrun by RM5 billion even before the project kicks off

By an answer dated 1-7-2013, to my question in Parliament, the Ministry of Public Works stated that:
1.         the full length of Pan Borneo is 2,239 km, out of which, 248 km has 4 or 6 lanes, while the remaining 1,991 km is still single carriageway.
2.         According to the Highway Network Development Plan (HNDP) report published in 2010, the total costs to upgrade the full stretch of Pan Borneo Highway into dual-carriageway is estimated to be RM22 billion.
3.         The Government shall upgrade the Highway by stages from 2011 till 2025.

However, on 10-10-2014, in his 2015 Budget speech, Najib said that “the government intends to start construction of the 1,663-km Pan-Borneo Highway comprising 936 km in Sarawak and 727 km in Sabah at a total construction cost of RM27 billion.”

If one were to compare the answer given by the Public Works Minister in Parliament in 2013 and the figure stated in the 2015 Budget speech of Najib, it is shocking to note that the stretch of Pan Borneo Highway that will be upgraded has shortened by 328 km, but the costs of construction has increased by RM5 billion!

Though it may sound good and feel good to hear of the Pan Borneo Highway mentioned in Najib’s 2015 Budget speech, there are 4 important points missing in his speech in this respect:

1.         When will the Project Commence?

In the whole of Najib’s 190-para Budget speech, only 1 small paragraph talked about Pan Borneo Highway and yet there is no mention about when the construction work will begin.

If one were to read carefully what he said, for all the other projects mentioned in the Budget speech which will be implemented next year, he use the word “will”.  But when he talked about Pan Borneo Highway, he used the words “intends to”.

According to the 2013 Public Works Minister’s reply, back in 2011, the Government has already had the intention to upgrade the Pan Borneo Highway.  Why is it that 4 years later, in 2015, the Government still remains at the stage of “intends to” but not committed to?

More importantly, as I glance through the Budget document, I can’t find the expenditure item for Pan Borneo Highway.

As such, the mention of Pan Borneo Highway is mere hot air, to temporarily silence the demand of Sarawakian for the upgrading of Pan Borneo Highway into dual carriageway.

2.         Why, within a short span of 4 years, the roads shortened by 320 km (-16%)but the costs increased by RM5 billion (22%)?

According to the 2010 HNDP report, the estimated costs to upgrade the length of 1991 km Pan Borneo Highway is RM22 billion, ie. an average costs of RM11.05 million per km.  This is already a very high figure.

However, according to the figures mentioned by Najib in his 2015 Budget speech, the estimated costs to upgrade the length of 1663 km Pan Borneo Highway will be RM27 billion, ie. an average costs of RM16.23 million per km, a 46.8% increase in costs per km.

It is impossible for the costs of building material to sky-rocket so high within a mere 4-year period.  This is especially so, given that inflation rates in Malaysia as announced by the Government have been in the region of 3% in the past four years (only 2.1% in year 2013).

Such over-bloated costs is very typical of the transactions found in the annual Auditors-General’s report where RM100 is spent for something worth RM10.

3.         How is the project going to be awarded?

Is the 1,663 km project going to be divided into packages and awarded through open tender system to numerous different contractors? Or, is it going to be directly awarded to one company without any open tender?

If it were the latter, the likely result will be that the single contractor will then sub-contract out the job, thereby keeping a certain percentage as its “Ali Baba commission”.

If this happens, the contractor actually doing the job will have no choice but to cut corners and may even compromise the safety design.  The people in Sarawak will not get the Pan Borneo Highway value for money.  At the end of the day, we will have sub-standard Pan Borneo Highway.

4.         Do we have to pay tolls for the Highway?

In the past, when North-South Highway was built, it was also over-priced.  As a result, millions of road user in West Malaysia are still paying exorbitant toll rates till this day.

DAP Sarawak fully supports the construction and upgrading of the whole length of Pan Borneo Highway into dual carriageway.  However, such development should not bring along additional burden to the people.

In addition, the work must be spread out more fairly, rather than only ONE company getting the work.

Chong Chieng Jen
Member of Parliament for Bandar Kuching
ADUN Kota Sentosa
DAP Sarawak Chairman

DAP National Vice Chairman