Audit Report Flags Weaknesses In Pan Borneo Highway, Flood Mitigation Projects

KUALA LUMPUR, Oct 5 – The National Audit Department (JAN) has highlighted contract management and governance weaknesses across major national infrastructure developments, including the Sarawak and Sabah Pan Borneo Highway (LPB) projects, the Sungai Golok Integrated River Basin Development Project (PLSB), and coastal conservation programs.

According to a statement on the Auditor General’s Report (LKAN) 2/2026, which was tabled in the Dewan Rakyat on Monday, October 5, 2026, severe project delays and financial irregularities risk inflating government expenditure and delaying key public benefits.

Sarawak and Sabah Pan Borneo Highway Projects

While 10 work packages for the Sarawak LPB project are fully complete and package WP11 stands at 99.9 per cent completion as of March 31, 2026, JAN noted that overall project objectives cannot yet be evaluated until full completion.

Key audit findings on the LPB projects include:

• Sarawak Utility & IT Governance: Claims totaling RM1.780 billion for utility relocation and reinstatement remain unexecuted, while RM32.07 million was paid for a Project Information System that became inaccessible after the agreement expired.
• Sabah Phase 1 Delays: Planned since 2015, only four out of 35 work packages (11.4 per cent, valued at RM567 million) have been completed after more than a decade. The remaining 31 packages (RM16.319 billion) are under implementation.
• Sabah Project Status: Out of the 31 ongoing Sabah packages, nine are classified as “sick” projects, 13 are delayed, and nine are ahead of schedule.
• Sabah Financial Irregularities: Irregularities include approved Variation Orders (VO) exceeding authorized limits by RM513.99 million and uncollected utility cost claims of RM41.37 million on completed works.

Sungai Golok Flood Mitigation (PLSB) and Coastal Conservation

The audit revealed that Phase 1 of the Sungai Golok PLSB in Kelantan has been delayed, with an Extension of Time (EOT) granted until July 21, 2027—replacing the earlier revised deadline of August 13, 2024. Phase 2 remains stalled due to procurement delays.

Audit findings on flood mitigation and coastal conservation include:

• PLSB Systemic Flaws: Weaknesses in planning, inter-agency coordination, scope changes, and design control caused cost overruns, structural damage to a pump house, and delays in securing border flood protection.
• Coastal Conservation Success: Nationwide, 10 completed coastal conservation projects successfully met targets to reduce coastal erosion and flood risks.
• Kuala Nerus Delay: The Kuala Nerus Coastal Erosion Control Project in Terengganu suffered a 15.7 per cent (144-day) delay due to machinery shortages, inactive breakwater sites, and late Environmental Impact Assessment (EIA) approvals.

JAN urged immediate coordination between the Public Works Department (JKR) and the Department of Irrigation and Drainage (JPS) to complete Breakwaters No. 7 and 8 before the upcoming Northeast Monsoon season to prevent newly repaired roads from collapsing.

–NMT