THE Penang government will have to explain why it is sticking to the project delivery partner (PDP) model for its RM46 billion Penang Transport Master Plan (PTMP), said Works Minister Baru Bian today.

He said this in response to questions on why Putrajaya had removed the PDP model in the Pan Borneo highway project while it allowed Penang to proceed with it

Putrajaya had cancelled the PDP model for the Pan Borneo highway project as it will save the government more than RM2.8 billion.

“That is the proposal by them (Penang government) and the question can be posed to the Penang state government,” said Baru in a press conference in Kuching.

He said he would not know if there would be any savings of cost if the PDP model is removed for the PTMP.

“That will be answered by them but as far as I am concerned, for Pan Borneo Sarawak, the saving of cost is very clear.”

Baru said in terminating the previous Barisan Nasional government-appointed Lebuhraya Borneo Utara’s (LBU) contract as the PDP, the federal government will be saving RM2.865 billion.

“The actual cost of building the highway is RM16.48 billion. It is not inclusive (of costs like) reimbursable, PDP fees, independent consulting engineer fees, contingency cost and land acquisition costs.”

He said if that is all added up, the cost will balloon to RM21.8 billion in the PDP model compared to RM18.9 billion in the conventional supervision model.

The works minister said in terminating LBU’s contract and reverting to the conventional supervisory method, with the Public Works Department appointed as the independent consulting engineer (ICE), the cost of the contract would have been reduced from RM16.48 billion to RM16.11 billion.

Baru said the RM18.9 billion cost should be taken as an estimated cost as the actual true cost of the project could only be determined at the end of its full evaluation.

The works ministry is taking over the full supervision of the highway project today.

On the staff of LBU who are being laid off due to the termination of the contract, Baru said the works ministry “will try our very best to absorb them”.

He said priority will be given to locals but those who could not be absorbed could claim compensation under the labour law.

“Claims and compensations have to be paid. Definitely we will honour that.”

On compensation claims by LBU over the termination, Baru said the company and his ministry are still negotiating on the quantum.

“We are still in the process of talking. Any lawful claims that should be paid under the PDP agreement, definitely we will have to honour.” – February 20, 2020.