PAC launches probe into Sabah Pan Borneo Highway after audit reveals delays despite RM10.5b spent

The Public Accounts Committee is examining the management, financial governance and physical implementation of Phase 1 of the Sabah Pan Borneo Highway. It matters because the project has spent most of its allocation but remains far behind its original schedule. The PAC began the investigation after findings in the Auditor-General’s Report Series 2/2026 and concerns raised by Members of Parliament.

The audit identified several issues for examination. These include 57 variation orders worth RM513.99 million approved beyond authorised limits. Interim payments of RM163.64 million were made without formal contracts. Nineteen work packages began before their Environmental Impact Assessment reports were approved, and 77,299 monitoring files were lost.

The PAC will summon the Works Ministry, the Public Works Department, JKR Sabah and other relevant agencies. It may refer evidence of misconduct, corruption or abuse of power to MACC and the Royal Malaysia Police. The investigation could clarify responsibility and strengthen oversight.

Phase 1 covers 706 kilometres and is divided into 35 work packages. It originally had an allocation of RM11.153 billion. By March 31, 2026, RM10.547 billion had already been spent, equal to 94.6 per cent of that allocation. The striking gap is between financial progress and physical delivery.

Only four packages, or 11.4 per cent, had been completed. The other 31 packages remained under implementation and were valued at RM16.319 billion. Nine were classified as sick projects, 13 were behind schedule and nine were ahead of schedule. This shows that spending alone does not mean the infrastructure is nearly finished.

The project was expected to finish by the end of 2021. Its completion date has now moved to 2030. The article also reports that the overall contract cost rose from RM17.910 billion to RM18.394 billion, adding pressure to public finances.

A work package is a separately defined section of a major project, usually with its own scope, contractor, budget and schedule. Dividing a highway into packages lets agencies manage different stretches at the same time. It also makes progress easier to measure. The article identifies 35 such packages in Phase 1.

Only four packages had been completed by the reported date. That represents 11.4 per cent of the total. The remaining 31 packages were still being implemented and were worth RM16.319 billion. Nine were classified as sick projects, while 13 were behind schedule. These figures show that unfinished sections were widespread, not limited to one isolated location.

The low completion rate is significant because the project was supposed to finish by the end of 2021. By March 31, 2026, 94.6 per cent of its RM11.153 billion allocation had been spent. The contrast raises questions about planning, cost control, contract management and whether public money is producing timely infrastructure.

The original plan expected all 35 work packages to be completed by the end of 2021. The PAC said weaknesses in planning caused the deadline to be extended to 2030. This is a major delay because the revised target is nine years after the original deadline. The project’s slow physical progress supports the concern about planning and implementation.

The article also records an increase in the overall contract cost. It rose from RM17.910 billion to RM18.394 billion. Separately, the projected current cost for 15 Phase 1A packages increased by RM987 million, reaching RM11.323 billion against an original ceiling of RM10.336 billion. The report does not identify every reason for these increases.

The consequences are both financial and practical. More public funds may be needed, while communities wait longer for completed highway sections. The PAC’s investigation is intended to examine how decisions were made and whether weaknesses in planning, approvals and contract administration contributed to the delay and higher costs.

Variation orders change a project’s agreed work, price or schedule. They can be necessary, but approval limits protect public money and ensure independent review. Payments normally require formal contracts so duties, prices, deliverables and remedies are clear. When those controls are bypassed, officials may struggle to verify whether spending is justified.

The audit found 57 variation orders worth RM513.99 million were approved beyond authorised limits without approval from the Treasury Secretary-General or the Works Ministry’s Procurement Board. It also found RM163.64 million in interim payments to contractors and consultants without formal contractual agreements. These are concrete signs of weakened financial governance.

Such practices can increase costs, complicate recovery of money and make responsibility harder to establish. They can also lead to disputes, incomplete work and slower delivery. The PAC is investigating the decisions and may refer indications of misconduct, corruption or abuse of power to MACC and the police for further action.

An Environmental Impact Assessment, or EIA, examines likely environmental effects before a project proceeds. Approval provides a formal check that identified risks have been considered and that required safeguards are in place. For a highway, this process matters because construction can affect land, water, habitats and nearby communities. The article specifically reports that EIA approval was required before work began.

The audit found that 19 work packages commenced before their EIA reports were approved. This reverses the intended sequence: construction started before the environmental review had received approval. Without that prior decision, agencies may lack confirmed conditions for managing impacts, monitoring works or responding to risks.

The possible result is greater uncertainty, along with compliance concerns, corrective costs and construction delays if problems are discovered later. The finding forms part of the PAC’s wider investigation into project governance. It may help the committee assess whether agencies followed required procedures and whether environmental safeguards were properly managed.

The Auditor-General reviews public spending and project administration, then reports weaknesses such as delays, unauthorised approvals and missing records. The PAC uses those findings to question how a project was planned, funded and delivered. This matters because large projects involve substantial public money and many agencies. Independent scrutiny can expose gaps that routine management misses.

Here, the PAC is summoning the Works Ministry, the Public Works Department, JKR Sabah and other relevant agencies. It will examine findings including RM10.547 billion spent, 57 variation orders beyond limits and lost monitoring data. Government agencies must explain decisions, records and corrective actions within this accountability process.

Enforcement bodies have a different role. If PAC proceedings reveal possible misconduct, corruption or abuse of power, the committee may refer the findings to MACC and the Royal Malaysia Police. Those bodies can then investigate under their respective powers. The process can clarify responsibility and support stronger project controls.