KUCHING: The Project Delivery Partner (PDP) agreement for the Pan Borneo Highway Project was terminated not only because of the high payment for consultation fee but also reimbursement cost of 2.5 times, said Pakatan Harapan (PH) Sarawak chairman Chong Chieng Jen.
He stated that under the PDP agreement, for every ringgit PDP spent to implement the project, the government had to reimburse 2.5 times higher.
“For an example, an engineer employed by PDP is paid a monthly salary of RM10,000. But when the PDP claims reimbursement from the federal government, the rate become RM25,000 which is 2.5 times higher.
“Another example is that if they buy a RM500 airfare ticket from Kuala Lumpur to Kuching, the federal government has to pay them back RM1,250. That is no longer a reimbursement. That is payment on top of reimbursement.
“The 2.5 times cost of reimbursement is what has been agreed in the agreement and it is ridiculous,” he told reporters after officiating the Chinese New Year gathering at Kampung Selangan Batu in Pending here yesterday.
Chong also explained that under the PDP, there would be a payment of 5.5 per cent for consultation fee from the total cost of the project.
“That is why when we remove the PDP, we no longer have to pay the 5.5 per cent for consultation fee and the reimbursement rate of 2.5 times the actual expenditure for the project,” he continued.
Chong added that prior to the PDP termination, both the Ministry of Finance (MOF) and state government held several rounds of discussion and consultation which led to MOF successfully convincing the state government that under the PDP, the estimated cost would be RM21 billion while without it, the estimated cost would be RM18 billion — a reduction of RM3.1 billion.
“The state government can’t find any rationale to justify the PDP continuation and at the end of the day, it has to agree to the termination and to replace this mode of implementation of the project with the conventional method — Public Works Department (JKR).
“With JKR, if you have insufficient staff, you can go on a contract basis and engage additional consultants and engineers to carry out this project.
“When you pay them, you pay the contract fee. You don’t have to use PDP as the middle man and you can save costs. We all know reimbursement is reimbursement.
“That is why it is absolutely justifiable and absolutely a saving of the taxpayers’ money by removing PDP from implementation of the project,” he continued.
Chong added that the savings of RM3.1 billion would be channelled back to Sarawak upon completion of the Pan Borneo Highway project for the implementation of other projects in the state.