KUCHING: Deputy Chief Minister Tan Sri Dr James Jemut Masing said the Works Ministry and Public Works Department (JKR) will play a supervisory role following Putrajaya’s decision to terminate the project delivery partner (PDP) agreement with Lebuhraya Borneo Utara (LBU).
He expressed concern of potential delay to the project implementation. “Such termination will further delay the construction of this highway, which is the only highway for Sarawak.”
“I hope this termination will improve the speed of its construction. Sarawak has enough of being sidelined over the years,” Masing added yesterday.
A news report by a business daily cited the decision was made after careful deliberation by the federal cabinet on Wednesday in order to save cost.
“LBU has not been officially notified, but will likely be informed in a few weeks’ time,” a source said.
The termination of the PDP agreement could potentially save the government some RM907mil for the Sarawak portion of the project as a fee of 5.5 per cent of the project cost must be paid to the PDP under the contract agreement.
PDP contractors usually earn a certain percentage of a project’s cost, but do not have to bear the full brunt of cost overruns and delays, as compared with the turnkey model, in which the project cost is fixed from the beginning.
The federal government has also cancelled the PDP model for the Sabah portion of the highway project, in favour of the turnkey contractor model.
