A shortage of qualified Sabah-based contractors has forced the government to turn to firms from other parts of the country for the Pan Borneo Highway project.

Works Minister Datuk Seri Fadillah Yusof said Tier 1 contractors were supposed to have been assigned to each of the 35 packages of the RM12bil project stretching over 1,200km.

(A Tier 1 contractor must have a paid-up capital of RM100mil, has expertise in road construction and have sufficient equipment.)

"There are only 14 Sabah companies that could qualify as Tier 1 contractors" Fadillah told a briefing about contracts to be offered under the Pan Borneo Highway.

To overcome the shortage, he said suitable companies from outside of Sabah would be allowed to bid for the Pan Borneo Highway packages.

However, they must team up with Sabah companies, which would benefit from the experience.

"Our Contractor Development and Entrepreneurship Division in the ministry is constantly finding ways to help small companies" he said.

Fadillah said the Pan Borneo Highway project was part of the devolution of power from the Federal Government to Sabah as its implementation was being overseen by the State Secretary's Office.