No issue with PDP, as long as it’s open tender, says Guan Eng

Lim Guan Eng has come under attack from former works minister Fadillah Yusof for cancelling the PDP model in the construction of the Pan Borneo Highway in Sarawak.

GEORGE TOWN: Lim Guan Eng says the project delivery partner (PDP) model for infrastructure projects is okay as long as it is based on open tender, following criticism from former works minister Fadillah Yusof over Putrajaya’s recent decision in the Pan Borneo Highway project.

The finance minister said in the case of the Sarawak stretch of the Pan Borneo Highway, the PDP had to be cancelled as it was appointed by the previous government through direct negotiation, which he said led to inflated costs.

“The earlier PDP agreement was signed without an open tender beforehand, that is why the price was inflated.

“There is nothing wrong with the PDP model, so long as it is done via an open tender. There is a world of difference compared to open tender and directly-awarded projects during the previous regime,” he told FMT.

The Barisan Nasional government started the Pan Borneo Highway project in June 2015, with 2,333km of road to be built connecting Sabah and Sarawak. The Sarawak sector will see 786.4km of roads to be built.

On Sept 20 last year, the government terminated PDP Lebuhraya Borneo Utara Sdn Bhd, who was entrusted to build the Sarawak stretch of the highway.

Opposition leaders have hit out at Lim over the removal of the PDP from the Sarawak highway, and asked why the same model was allowed in the RM46 billion Penang Transport Master Plan (PTMP).

Lim, who is also the former Penang chief minister, said in the case of PTMP, the PDP was selected using open tender and overseen by international accounting firm KPMG.

He questioned why the criticism was coming from Fadillah and former prime minister Najib Razak, and not the Sarawak government.

Fadillah had said the Sarawak government had “no choice” but to agree to rescind the earlier agreement.

But Lim denied the claim.

“For the record, the finance ministry did not force them to do so or sent any threatening letters to arm-twist anyone.

“The question that needs to be asked is, why no one from the Sarawak government had said anything about this, to date? They have kept quiet.

“I feel they are just being duplicitous, playing a double game of trying to have their cake and eat it, as well,” said Lim.

Putrajaya said the removal of the PDP would save the federal government RM3.1 billion in constructing the road, down to RM18.8 billion from the earlier cost of RM21.9 billion.

Under the previous agreement for the Sarawak stretch of the Pan Borneo Highway, the PDP was to be paid a fee of 5.5% of the total project costs.

In addition, the PDP was also to be fully reimbursed for all its expenses, including its employees’ salaries, allowances and all other expenses. The agreement was to expire on Feb 20.