Further delay expected for Sabah Pan Borneo, says Kenanga Research

Some of the work packages for Pan Borneo Sabah have not yet been awarded.

KUALA LUMPUR: The government’s decision to take over the Pan Borneo Highway project from the existing project delivery partner (PDP) will further impact the timeline for the Sabah portion, which is already currently behind schedule.

In a note, Kenanga Research said this takeover would have a minimal impact on the existing work package contractors for the Sarawak portion as most of the work packages have already been awarded.

But it said this change could further impact Pan Borneo Sabah as some of the work packages have not yet been awarded.

The research house said development of infrastructure, such as roads and ports in Sabah, remains challenging as it would require much focus, attention and assistance from the relevant parties.

“The Sabah Pan Borneo has only achieved progress of 11% for the 12 ongoing work packages awarded to local contractors.

“We foresee delays in the execution of the project underpinned by issues like land acquisition, relocation and work coordination given that it comprises 35 work packages in total,” the research house said.

Kenanga Research said the main issues causing delay to the Pan Borneo Highway project in Sabah are the land acquisition process and environmental impact assessment approval.

It said out of the 12 packages already awarded to contractors, only two land acquisition packages have been cleared.

“Hence, we believe it would be highly ambitious for Borneo Highway PDP should they aim to complete the construction works for the Sabah Pan Borneo highway by 2021. An extension of time is inevitable if they are unable to solve the land acquisition issues,” it said.

However, Kenanga Research said the Sarawak portion of the project is currently progressing with more traction at an overall progress of around 35% despite limited resources and logistics challenges.

The research house said Sarawak offers massive opportunities for local companies largely due to the state government’s allocation of RM11 billion for infrastructure works, like the coastal highway, water supply, electricity connectivity and other projects over the next two years.

“We are reassured with the prospects in Sarawak as we believe that the Sarawak state government possesses the will to implement the above-mentioned infrastructure projects that are set to improve the livelihood of Sarawakians,” it added.