With the Kuala Lumpur-Singapore high-speed rail (HSR) project called off, market watchers are wondering which mega-project would be reviewed next by the Pakatan Harapan government, reported The Star.
According to sources, the Sabah portion of the Pan Borneo Highway could possibly be next.
Straddling Malaysia’s two biggest states, the 2,325km highway is toll-free and is expected to be completed in 2021.
“The bulk of the work in Sabah has not been carried out yet, which makes it easy to defer the project. In Sarawak, work on the ground in phase two between Miri and the border of Sabah has not been carried out yet,” explained a source.
In a report, CIMB Research said the first phase of the Sarawak portion had already been fully awarded, while the Sabah portion would have proceeded with contract rollout had the Barisan Nasional won the elections.
“The cost of the Sabah portion is 20 percent lower than that of Sarawak,” said CIMB.
Sources said 50 percent of the work for the Sarawak portion had already been done and had resulted in over RM1 billion in cost savings.
Meanwhile, many expected the award of the remaining packages for Sabah to pick up post-GE.
“Seven packages worth RM3.2 billion have been awarded, leaving the balance packages to be awarded in the second quarter of 2018 onwards, with an estimated value of RM9.7 billion,” said CIMB in its recent research report.
The research house noted that five packages under the Sabah portion were under construction as at end-2017. 10 more packages were submitted to the Finance Ministry for approval, while two more were approved and launched.
Sources revealed that the five packages face “huge cost overruns”, with the previous federal government having problems justifying the cost.
Notably, the Sabah portion started on bad footing as no one single company took the lead as the project development partner (PDP).
“MMC Corp Bhd and UEM Group Bhd each had 20 percent as PDP, while the remaining 60 percent has been given to six private companies linked to the previous state government,” added a source.
With the cost overruns, rumours have it that the previous federal government was considering having a Chinese firm complete the project on a fixed cost basis.
Image sourced from The Star Online
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