Federal Territories Minister Tan Sri Annuar Musa today told the Dewan Rakyat that a memorandum paper had been presented to the Cabinet on September 9, 2020 to seek approval to build the bridge. — Picture by Yusof Mat Isa

KUALA LUMPUR, Nov 18 — The federal government has approved the proposal to build a bridge connecting the island of Labuan to the nearby state Sabah, with the project to be funded by the private sector and to be built via a partnership between the government and private firms.

Federal Territories Minister Tan Sri Annuar Musa today told the Dewan Rakyat that a memorandum paper had been presented to the Cabinet on September 9, 2020 to seek approval to build the bridge.

"I am glad to inform that the Cabinet had already given its agreement for the proposal for the bridge’s construction to be carried out,” he said.

He also indicated that the process for companies to bid for the project via request for proposal (RFP) will be starting soon.

"At this time, the Federal Territories Ministry and the Works Ministry is finalising the terms of reference to carry out a request for proposal. The proposal to build the Labuan bridge to Sabah will be done through a public private partnership (PPP) using the private finance initiative (PFI).

"As you know, the implementation of the project via PPP is to drive economic growth through the private sector’s investment besides reducing the government’s financial burden, and to ensure it gives the best economic benefit to the government and to ensure the project goes on smoothly. Therefore it will be carried out via competitive bidding by inviting RFP,” he added.

Annuar was responding to Labuan MP Datuk Rozman Isli’s question on whether the Labuan-Sabah bridge project will be continued via PFI and RFP or if it would be fully funded by the government, in light of this being an item promised by the government-linked coalition Gabungan Rakyat Sabah in the recent Sabah state elections.

Following Annuar’s answer, Rozman then suggested that it would be quite challenging to attract investors for the bridge project, before asking if the Federal Territories Ministry or the federal government was prepared to allocate land in the Klang Valley or Kuala Lumpur for a land swap and to also combine the bridge’s RFP with an RFP for the planned new Labuan integrated port to make the bridge project more attractive to investors.

Annuar did not directly address Rozman’s land swap idea, but instead replied that the Federal Territories Ministry and the Works Ministry had to date already received many preliminary proposals regarding the bridge.

"Based on the many companies who wish to offer proposals and their recommendations, we are confident this RFP process will be well received,” he said.

Annuar then gave the timeline for the Labuan-Sabah bridge, saying that the terms of reference that is now being finalised is expected to be presented to interested companies before the end of this year, with such companies to make presentations based on the preliminary terms prepared.

"And after that, a period of six to eight months will be used to complete RFP documents in detail to allow bidding to be done fully, and by September — third quarter — next year, the Public Private Partnership Unit (Ukas) will evaluate the biddings, and it is expected by October we can finalise what is the method to be used and which company will be given the opportunity to build that bridge,” he concluded.

What Labuan needs

Later in his debate on the Budget 2021, Rozman said he had been pushing for the Labuan-Sabah bridge since 2013 when he first became an MP, highlighting the importance of this bridge for the future of Labuan, Sabah and also nationally.

"This project should be an icon to an era of looking towards Borneo,” the Parti Warisan Sabah lawmaker said.

Among other things in his debate speech, Rozman highlighted the many problems that Labuan’s population of about 100,000 residents was facing, including the reality of their difficult lives and poor quality of life despite the island being known as an international financial hub which contributed massively to Malaysia’s coffers.

He pointed out that those in Labuan with ailments such as heart diseases, cancer, eye-related illnesses were forced to take a two-hour ferry and travel by bus or by car for another 2.5 hours to seek medical treatment at the Queen Elizabeth Hospital in Kota Kinabalu, Sabah.

While saying that the number of doctors and equipment had improved under the current Labuan health director’s leadership, Rozman said Labuan ultimately needed a specialist hospital with sufficient specialists as residents otherwise had to resort to travelling to Sabah.

"How can it be that Labuan with a status as an international financial centre and oil and gas hub doesn’t have a major specialist hospital?” he asked.

Rozman said Labuan had been a federal territory for the past 37 years and for a longer period than Putrajaya, but claimed that the federal government had for many years failed to give sufficient allocations for the island and to have failed to provide integrated development there.

Among other things, Rozman also objected to the government’s plan under Budget 2021 to make cigarettes and tobacco products as taxable goods in duty-free islands including Labuan.

"I don’t smoke but I oppose it because it will cause Labuan’s economy to worsen. All this while, there is more than one million visitors to Labuan per year, and many of them are from Sabah and Sarawak who come to Labuan for duty-free shopping including tobacco products. Domestic tourism is a big part of the Labuan economy,” he said.