PUTRAJAYA should not terminate the contract of Lebuhraya Borneo Utara Sdn Bhd (LBU), according to former state works minister Fadillah Yusof, who said today the company had been consistent in meeting its deliverables for the 1,620km stretch of the Pan Borneo Highway in Sarawak.

The Petra Jaya MP said breaking any contract could cost the government money in compensation.

Speaking to reporters at his Hari Raya open house today, Fadillah said the change in contract arrangement could also force a delay of one to two months while whichever company is appointed to take over familiarised itself with the project.

“That will definite take time,” he said on his successor Baru Bian’s disclosure a few days ago that the cabinet would soon decide if LBU would be retained on the PDP model, or if the contract would be trashed in favour of the turnkey contractor model similar to that in Sabah.

“Whatever decision is taken, there will be implications, in costs. Definitely there will be exposure to the government.

“If they want to terminate, it should be graceful and has to be on mutual terms.”

Fadillah said Baru and Finance Minister Lim Guan Eng should take into consideration the contracts between the PDP and their many subcontractors and consultants.

“They (LBU) are performing. I don’t see any reason why the government should terminate anyone who performs well.

“Why should you penalise those who perform?”

Reports of Putrajaya wishing to dump the PDP model for the entire RM29 billion, 2,300km highway project in favour of the turnkey contractor model first surfaced in March.

The Edge Financial Daily reported cost overruns as the reason for the government’s decision.

The government terminated Borneo Highway PDP Sdn Bhd (BHP) for the 700km Sabah portion of the highway in April.

In a filing with Bursa Malaysia in April, MMC Corp Bhd – one of the three joint-venture companies in BHP – confirmed the termination and stated it was on the grounds of national interest.

BHP is 60% owned by Warisan Tarang Construction Sdn Bhd, with the other 40% held by a joint venture between UEM Group and MMC. – June 10, 2019.