KOTA KINABALU, March 21 — The Pan Borneo Highway project will continue without the participation of the private sector, said Sabah Chief Minister Datuk Seri Shafie Apdal.

Responding to a report in The Edge that the federal government would drop the project delivery partner (PDP) model in favour of a turnkey contractor, Shafie said talks between his administration and Putrajaya were instead leaning towards a government takeover.

"We have discussed at length with our colleagues in KL — Finance Minister Lim Guan Eng and my friend from Sarawak, Baru Bian,” he said when speaking to reporters after launching the Heart of Borneo conference here today.

He said agencies such as the Works Department would take over the physical work, with the Finance Ministry handling the funding.

Shafie also said it was ill-advised to let a private firm handle the RM16 billion for the highway and that it would be more transparent and accountable for the project to be handled by Sabah, Putrajaya, or both.

"We are not concerned who’s getting the job but what is important is that road is built so people can use it,” he said.

Earlier, he also said that they will review the current packages for the highway to avoid unnecessary harm to the environment.

Shafie said infrastructure needs did not mean the environment should be ignored or damaged.

The Sabah CM said he would prefer preserving the environment even if it meant a higher cost to the highway.

The Edge Financial Daily today quoted sources as saying the federal government has decided to drop the PDP model due to cost overruns that private firms were not incentivised to reduce.

The state government previously proposed a takeover of the project’s Sabah portion.

The highway spans 706km and is expected to be completed in 2023.

It was reported that 12 out of 35 packages for the first phase had commenced construction as at December last year and about 12 per cent has been completed.