Minister says claims procedures behind slow payments to Pan Borneo Highway contractors
Fadillah, accompanied by Mohd Radzif (right), making his way to the ballroom for SME Bank’s Pan Borneo Market Outreach Programme at a hotel in Kuching yesterday. — Photo by Chimon Upon
KUCHING: Works Minister Datuk Seri Fadillah Yusof brushed aside suggestions that the delay in paying contractors of the Pan Borneo Highway project is because the government does not have enough funds for the project.
He assured that the funds were already available – RM5 billion from government allocation, while the balance from the federal government funding vehicle, DanaInfra Nasional.
“All the funds are ready and available just that what is delaying is the complying process for contractors when they submit claims which we have to look into because we are managing public money, we have to handle it with due care,” he told reporters after launching SME Bank’s Pan Borneo Market Outreach Programme at a hotel here yesterday.
The minister said he would discuss with the Ministry of Finance to see how they can expedite payment to contractors involved in the Pan Borneo Highway project.
Fadillah, who is Petra Jaya MP, said the reasonable time for contractors to receive their payment should be between two and three months, not four months as is currently happening.
“I will bring this matter to Ministry Of Finance to see how this process can be expedited so that when the project has started, the payment will not be too late which can burden the contractors and consequently will affect the completion of the project.
“Any delay (in the project) is not only a cost to the contractors but also to the government because the government will have to absorb the cost,”
Considering that Pan Borneo Highway is a large project involving huge amount of public funds, Fadillah said the government had put in place certain processes and procedures such as setting up a financial technical committee, as well as having professional consultants like surveyors, civil engineers and quantity surveyors to verify the claims submitted by the contractors before submitting them to the Ministry of Finance.
“That’s why we want to avoid this problem (delay in paying contractors) and we hope it will be resolved. In terms of consultation fees and so on, we have found the method to resolve it immediately.
“Just that now we want to see how when this contract is started at a faster pace, surely the volume (of claims from contractors) that we need to process is also high. That is why I foresee there will a bit of issues there.”
Earlier in his speech, Fadillah said as Works Minister he is a ‘checker’ of the Pan Borneo Highway project to ensure that it is fully implemented according to the stipulated period.
“This project is large scale project in Sarawak and Sabah. The infrastructure project will cost RM16.5 billion for Sarawak while for Sabah about RM12 billion. According to the agreement, this project needs to be completed in June 2021. We have awarded 11 packages to the main players so far.”
In Sarawak, Fadillah said 17 main players had been identified from among the contractors who participated in an open bidding process for the project.
“Before that, they will go through pre-bidding process first. We will offer and those interested will join the tender. They will then be split and those qualified will be the main player,that is tier-one contractors. All tier-one contractors have been appointed.”
He said opportunities would also be given to Bumiputera contractors to be involved in the Pan Borneo Highway project through cooperation with Dewan Usahawan Bumiputera Sarawak (DUBS), Dayak Chamber of Commerce and Industry as well as Persatuan Kontraktor Melayu Malaysia.
“30 per cent of the contracts will be allocated to Bumiputera contractors. This is part of the policy to ensure this contract can be benefit all parties. I was told the contractors selected are negotiating with the tier one contractors in terms of contract value to be allocated.”
As for the class B to F or G1 contractors, Fadillah said they would be appointed based on the locality of the Pan Borneo Highway project and through drawing of votes.
“I was also informed that as of now, Bumiputera contractors that have been appointed are 492 from class A to F; comprising 35 class A contractors (domestic sub-contractors) and 47 nominated class F sub-contractors have been appointed.”
In stressing the need for cooperation from all parties, Fadillah said the government could not afford to see the Pan Borneo Highway project delayed, adding that cooperation from everyone including the contractors would help complete the project according to the technical standard, duration and cost that had been fixed.
“The most important thing is this project is a project that is initiated by Prime Minister Datuk Seri Najib Tun Razak using a new approach, whereby various stakeholders would benefit from all the mega projects. At the same time, we will ensure all the key players in Sarawak or other states will be involved together.”
He said: “Everyone will benefit from this project, not only in Sarawak. The completion of this project will give economic and social impacts not only to the people of Sarawak, but also Sabah. It will also help to increase tourism and investment in both states. With the better road network with Kalimantan, hopefully the economic expansion can be felt by all.”
He also said the government had appointed a project delivery partner, Leburaya Borneo Utara (LBU), that would represent the government to manage the project and ensure that it could be completed within the stipulated date and cost, as well as the technical standard set by the Public Works Department.
Among those present at the event was SME Bank managing director Datuk Mohd Radzif Mohd Yunus.