KUALA LUMPUR: The Public Accounts Committee will begin an investigation into the management, financial governance and physical implementation of the Pan Borneo Highway Sabah Phase 1 project.
Its chairman, Datuk Mas Ermieyati Samsudin, said the investigation would examine how issues could have cropped up despite the establishment of monitoring committees at both state and federal levels.
"What the PAC questions is the adequacy of the existing monitoring systems that approved payments for the project, despite the clear discrepancy between physical progress on the ground and the amount of public funds spent," she told a press conference at the parliament building.
She said the committee would summon witnesses from the Works Ministry, the Public Works Department, including its Sabah office, and other relevant agencies and parties to testify.
Any findings indicating misconduct, corruption or abuse of power would be referred to the Malaysian Anti-Corruption Commission and the police, she added.
"PAC is committed to conducting this investigation independently, transparently and comprehensively to ensure that every cent of public funds is spent prudently and responsibly, in compliance with the relevant regulations and in pursuit of the country's development objectives," she said.
The Auditor-General's Report 2/2026 highlighted significant weaknesses in the planning and implementation of Phase 1, which comprises 35 work packages spanning 706km.
The project was scheduled to be implemented over 69 months and completed by the end of 2021.
However, only four work packages (11.4 per cent) have been completed, while the remaining 31 packages, worth RM16.319 billion, are still under construction, despite the project having been scheduled for completion five years ago.
Nine packages have been classified as sick projects, while 13 are behind schedule. Only nine are ahead of schedule.
The report also found that RM10.547 billion, or 94.6 per cent of the RM11.153 billion allocated for the project, had been spent between 2016 and March 31 this year, despite physical progress remaining significantly behind schedule.
The completion deadline has since been extended to 2030 due to weaknesses in project planning, while the overall contract cost has risen from RM17.910 billion to RM18.394 billion.
Mas Ermieyati said the report also identified 57 variation orders worth RM513.99 million that were approved beyond the limits of delegated authority under Treasury Circular PK 4.1, without approval from the Treasury secretary-general or the Works Ministry's Procurement Board.
The projected cost of 15 Phase 1A work packages had also increased by RM987 million, or 9.5 per cent, to RM11.323 billion from the original cost ceiling of RM10.336 billion.
"The entire project now faces the risk of non-completion due to a funding deficit if the government does not approve additional allocations," she said.
She added that interim payments totalling RM163.64 million had been made to contractors and consultants without formal contractual agreements, exposing the government to legal risks.
The report also found that RM41.37 million in advance payments made by the government for utility works had yet to be recovered from utility companies, despite the expiry of the six-month period following the issuance of the Certificates of Practical Completion.
Construction on 19 work packages had also begun before the relevant authorities approved their environmental impact assessment reports.
In addition, the ineffective use of the project information system had resulted in the loss of 77,299 monitoring data files.
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