KUALA LUMPUR: The overall cost of the Pan Borneo Sarawak Highway (LBPS) project has been reduced by as much as RM3.1 bil to RM18.8 bil due to the conventional method compared to the RM21.9 bil under the Project Delivery Partner (PDP) method, says Lim Guan Eng.
In a statement today, the minister of finance said the PDP method incurred a construction cost of RM16.5 bil compared to RM16.1 bil with the conventional method.
“Some parties have questioned how the cost savings amounted to RM3.1 bil when the original cost was not RM21.9 bil but RM16.5 bil. They intended to confuse by stating that the construction cost of RM16.5 bil was the overall cost without taking into consideration other costs,” he pointed out.
Lim said the estimation of the overall LBPS project cost with the conventional method of RM18.8 bil was tabled to the Cabinet last year.
“Under the PDP model, the overall cost not only involved construction costs, but also payments to PDP companies including reimburseable payments and PDP payment fees (5.5% of the construction cost),” he explained.
Lim stressed that the construction cost that was approved by the previous government amounting to RM16.5 bil was not the overall cost that would have to be borne by the government.
“Other costs that were not stated included PDP reimbursable costs, PDP fees, contingency costs, land acquisition costs as well as independent consulting engineer costs that increased the overall original cost to RM21.9 bil,” he added.
Meanwhile, Lim also disclosed that the proposed economic stimulus package will be announced at the end of February or in early March to help cushion the impact of the 2019 novel coronavirus outbreak. – Feb 11, 2020, Bernama
