KUCHING – The government will look at its internal procedures so that contractors doing the Pan Borneo Highway project can have their payment claims settled within two or three months at the most.
Works Minister Datuk Seri Fadillah Yusof said it had to take a very cautious approach as it was dealing with a huge amount of public funds.
“Sometimes because of the procedures which involve many quarters from the project technical committee to the quantity surveyors, civil engineers, consultants who verify the claims and others, the payment will take quite some time, up to four months.
“I will bring up the matter with the Finance Ministry on how to expedite payments so that the contractors will not face a serious cash flow issue,” he said after officiating at the Pan Borneo Market Outreach programme organised by SME Bank for local small contractors involved in the construction, here, Tuesday.
He said delayed payments could affect the contractors and the project scheduled completion date in 2022.
“Any project delay is a cost to the government as well. We want to avoid this as in the end we will have to absorb any resulting extra costs,” he said.
Fadillah also said that it was not true the government had no actual fund to pay for the RM16 billion highway project (Sarawak side) as alleged by certain quarters.
“There is the RM5 billion allocation from the government while the balance is from the federal government funding vehicle, DanaInfra Nasional.
“So, the fund is available and ready to be used,” he said.
In his speech earlier, Fadillah said for the project, the government had so far awarded contracts from Borneo Highway PDP Sdn Bhd and Lebuhraya Borneo Utara Sdn Bhd (LBU) Sdn Bhd to 47 Class F and 35 Class A local contractors.
He also said that it was the government’s policy to ensure that Bumiputera contractors would enjoy 30 per cent participation in the project construction.
He was glad to note that SME Bank was actively coming to their assistance with its special financing packages.