PDP Model Ideal for Pan Borneo
The project delivery partner (PDP) model chosen for the implementation of the Pan Borneo Highway project is ideal, as it ensures efficiency, accountability and transparency in the project’s contract administration.
According to Lebuhraya Borneo Utara (LBU) chief executive officer (CEO) Safuani Abdul Hamid, the PDP model has put in place contract administration policies, systems, formats and procedures that promote efficiency, accountability and transparency.
“Coupled with a strong governance structure at various levels and solid support from the federal and state governments, the PDP model enables fast and decisive decision-making to meet project delivery targets.
“In the case of Pan Borneo Sarawak, there is great anticipation from the Sarawak public for us to deliver this safe and efficient highway in the shortest possible time.
“In line with public demand for the project to be carried out in a fair and transparent manner, the PDP model allows for this to happen for the good of the state and nation,” he added in a posting on LBU’s website.
LBU, the PDP for the RM16.49bil Pan Borneo Highway Sarawak project (phase 1), targets its full completion by 2021. The project’s overall work progress has currently reached about 38%.
LBU said recently that it was optimistic that it could achieve some RM2bil in savings on this most ambitious infrastructure project in Sarawak as a result of its efficient design, as well as cost and change control management.
Safuani said at the heart of the project execution was its pre- and post-contract administration in which LBU as PDP awards and manages contracts based on approved policies with the various works packages’ contractors.
“The Pan Borneo Highway Sarawak works packages are all remeasured in nature as opposed to being lump-sum contracts.
“The important difference with remeasured contracts is that payments are made for the actual value of work done based on quantities verified through a joint site measurement process conducted by multiple parties.
“In other words, contractors only get paid for actual work done on site. For the PDP, remeasured contracts are tied to meeting the ‘Target Cost Key Performance’ indicator that enables transparency and accountability to be better achieved.”
Safuani said the monthly progress payment claims’ evaluation process follows a stringent confirmation and verification methodology. It involves the consultants’ resident engineering teams on site, independent checking engineers, the PDP’s own construction management team, along with the government’s representatives, the Sarawak Public Works Department and the Sarawak Infrastructure Development and Transportation Ministry.
“Remeasured contracts are the preferred form of contract for a road project such as the Pan Borneo Highway, where there is a high degree of uncertainity for some works, particularly for ‘below-ground’ activities such as pile lengths, foundations, rock excavation, replacement of unsuitable materials as well as slope stabilisation.
“Remeasured contracts are seen as fair. The owner through the PDP assumes the risk for total quantities, while the works package contractor assumes the risk for fixed unit prices.”
Safuani clarified that the LBU did not pick the project contractors, as all major procurement decisions are made and finalised by the government.
Only through such approval does LBU award the works package contracts per the PDP agreement, he said.