Sarawak first in South East Asia to use PBC approach: Abang Johari
KUCHING: The Sarawak government is the first in Malaysia and South East Asia to adopt a performance-based contract (PBC) approach for road maintenance.
Chief Minister Datuk Patinggi Abang Johari Tun Openg said Cahya Mata Sarawak (CMS) Roads has had road maintenance contracts with the state government under the PBC procurement approach for more than 15 years now.
“In fact, CMS was the first PBC adopters in South East Asia,” he said at the opening of the Performance-Based Contracts Workshop at Borneo Convention Centre Kuching (BCCK), here yesterday.
The chief minister said performance contracts (PC) first emerged in Europe in the 1960s and 1970s in the context of public enterprises, while PC in government emerged in the 1980s in the UK and New Zealand.
Abang Johari’s text of speech was read by the Assistant Minister for Coastal Roads Datuk Julaihi Narawi.
“PBC is results-oriented and focuses on quality and outcomes. Which means the contractor is required to achieve a predetermined performance indicator for each category of work before any payment from the employer is received,” he said.
He said for instance under PBC, all pavement defects are rectified and all blocked drains are cleared within specified periods, and contractors are obligated to rectify the issues with no extra cost.
“Whereas under Quantity-Based Contract (QBC), additional work over and above the contracted amount will be charged,” he said.
He said that among the benefits of PBC to the government is it has annual savings of 10 to 20 per cent.
“It also includes faster and better response time, higher maintenance standards, annual budgeting is easier being based on fixed rates for the different types of work, transfers the obligations and risks of work management from the state to the contractor, and also enables the contractor to incorporate new technologies and equipment,” he said.
Meanwhile, CMS chief executive officer Datuk Isaac Lugun said PBC is the preferred model because contractors are only paid upon achieving predetermined performance indicators or KPIs.
“As such, better roads are delivered and for a lasting duration,” he said.
He said CMS is proud to play an important role in maintaining nearly 20 per cent of the state roads in Sarawak and have continuously improved performance as evidenced by the independently verified Road Maintenance Index.
The two-day workshop themed “Spurring Growth, Connecting Sarawakians” is organised by the International Roads Federation (IRF) and CMS Berhad (CMSB).
The workshop provides a platform for industry players to share, discuss, and determine strategies to improve the approach towards road management and maintenance.
