AG's report: Works Ministry addresses delays, cost increases in Sabah Pan Borneo project

Changes in the Sabah Pan Borneo Highway Phase 1 project have led to delays, increased costs and compliance issues, according to a report from the Malaysian Auditor-General. Works Minister Datuk Seri Alexander Nanta Linggi attributed the setbacks to various factors, including the shift from the Project Delivery Partner model to the conventional method, land acquisition concerns and contractor performance.

The 2026 Auditor-General's Report identified 13 issues related to the delays, cost overruns, weak planning and non-compliance with regulations. As of August 25, only four out of the 35 work packages in Phase 1 were completed, with the remaining 31 still under implementation. Physical progress on Phase 1A was reported at 89.01%, WP09 at 37.58% and Phase 1B at 23.96%.

The cost increase for Phase 1A was caused by project extension, scope changes, construction contract prices and unresolved land and utility issues. However, site readiness was at high levels - 99.79% for Phase 1A, 96.8% for WP09, and 79.43% for Phase 1B.

The Works Ministry has taken steps to improve its administration and contract management skills, directing officers to attend training provided by the Construction Industry Development Board and the Centre for Excellence in Engineering and Technology. Moreover, the Sabah LPB Steering Committee, set up in November 2024, has continued to strengthen monitoring through its site visit program.

The committee, co-chaired by the Works Ministry secretary-general and the Sabah state secretary, is aimed at improving coordination among state agencies.