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LBU denies delaying payments to Pan Borneo Highway Sarawak contractors

An aerial view of a stretch of the completed Pan Borneo Highway Sarawak ‘Kick-Off Project’ from Jalan Nyabau to Simpang Bakun. – The Borneo Post

KUCHING: Pan Borneo Highway Sarawak (PBHS) project delivery partner Lebuhraya Borneo Utara Sdn Bhd (LBU) has denied it delayed payments to contractors involved in the project.

In a statement, LBU chief executive officer Safuani Abdul Hamid said two of the 10 work package contractors (WPCs) have already received payments while the remaining WPCs will be paid as soon as LBU receives payment from the federal government.

“As to the issue of alleged payment delays – specifically July, payment is not delayed and is expected to arrive around this time as per the agreement with the WPCs,” it said.

Safuani also said that for any public project which involves taxpayers’ money such as Pan Borneo Highway, LBU has an obligation to make sure that every single ringgit spent is accounted for.

“It is our duty to comply strictly to this elaborate governance process as we hold the responsibility to deliver the project in a transparent and accountable manner”.

The statement was issued to press reports where 10 contractors involved in the PBHS had claimed they had not been paid for the last three months.

Works Minister Baru Bian had told a press conference yesterday that the payment issue has caused a slight delay in the progress of the mega project, and he was also quoted as saying that payment should have been sorted out by LBU as the project delivery partner or PDP for PBHS.

LBU in the same statement explained the payment process put in place by the government to ensure fairness, transparency and efficiency of delivery for this mega project.

It also said the payment process has been clearly stipulated in the Project Delivery Partner Agreement, which has been duly informed and advised to all WPCs since the start of the PBHS.

“Being the Government’s Project Delivery Partner (PDP), the payment process begins with the Verification stage. LBU together with the supervising consultants review the Interim Payment Applications (IPA) from WPCs.

“It is a thorough and detailed process to check all necessary documents in support of WPC claims before a provisional Interim Payment Certificate (IPC) can be issued by LBU.

“Next is the Certification stage where the interim IPC is sent to the Government agencies for checking and review. If everything is good, then provisional IPC is deemed to have been accepted by the Government,” it said.

However, with a mega project of this scale in which every works package contract is in excess of RM1 billion, LBU said the the monthly claims are large and many in numbers.

“Governance dictates that all claims have to be checked carefully to ensure that what is paid is really for works done on the ground. There are often cases where corrections or amendments have to be made. This can delay the Government’s certification of the interim IPC.

“Finally, we come to the Payment stage. On LBU’s part, upon receiving payment from the Government, LBU has successfully cut down the process to just one day, from the previous seven days, to disburse payments to the WPCs. After all, it is in everyone’s interest that our WPCs get paid fast, in recognition of the project’s progress,” it added.

LBU also pointed out updates on payment status are a regular agenda in the Project’s coordination meetings with Government stakeholders.

“Even the Minister of Works Baru Bian had been briefed several times on the payments process and status,” it reiterated.



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