The government saved some RM3.1 billion or 14% of the total cost of the Sarawak portion of the Pan Borneo Highway project, thanks to a new project funding agreement.
Finance Minister Lim Guan Eng said the new agreement, which employs the “conventional” method compared with the previous project delivery partner (PDP) model, has brought down the total cost to RM18.846 billion from RM21.857 billion.
He said the lower cost was due to the removal of a 5.5% service fees imposed by the PDPs in the previous agreement.
“The reduction is significant, which we hope to channel back to the Sarawak people if there are no cost overruns,” Guan Eng said at a press conference yesterday.
Earlier, Guan Eng, together with Works Minister Baru Bian, witnessed the signing of the new funding agreement between DanaInfra Nasional Bhd and the federal and Sarawak governments.