Auditor-General Flags RM1.78 Billion Pan Borneo Sarawak Claims, 31 Sabah Packages Still Unfinished
The Auditor-General’s Report 2/2026 has flagged major weaknesses in the management of the Pan Borneo Highway projects in Sarawak and Sabah, including RM1.78 billion in utility relocation and reinstatement claims yet to…
Source: Business Today Malaysia · October 5, 2026 at 11:32 AM · AI-assisted report
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SARAWAK, 5 OCTOBER 2026 —
The Auditor‑General’s Report 2/2026, released on 5 October 2026, flagged major weaknesses in the management of the Pan Borneo Highway projects in Sarawak and Sabah, noting that utility relocation and reinstatement claims totalling RM1.78 billion remain unaddressed in Sarawak and that 31 of Sabah’s 35 Phase 1 work packages are still under construction more than a decade after they were launched.
Market Impact
The findings highlight persistent delays and financial exposure in the flagship infrastructure programme, raising concerns about cost overruns and the ability of the federal and state authorities to complete the highway within the original timetable. The report underscores that the unfinished work packages in Sabah represent a significant proportion of the Phase 1 scope, while the outstanding utility claims in Sarawak expose the government to a large liability that has yet to be settled.
According to the Auditor‑General, the utility relocation and reinstatement claims in Sarawak amount to RM1.78 billion and have not been carried out. In Sabah, the audit revealed that 31 of the 35 work packages earmarked for Phase 1 remain under construction, despite the projects having been initiated more than ten years ago.
The audit noted “major weaknesses” in project management and oversight, though the document did not provide further detail on the specific causes of the delays.
The report’s revelations come as the Pan Borneo Highway, a key component of the East Coast Economic Corridor, continues to be a focal point for both federal and state development agendas. The outstanding liabilities and unfinished works could affect budget allocations for other infrastructure initiatives and may prompt calls for tighter governance mechanisms.
For Malaysia, the audit underscores the need for improved coordination between federal agencies and state governments in delivering large‑scale projects, especially those that span multiple jurisdictions. The highlighted financial exposure of RM1.78 billion and the prolonged construction timeline in Sabah could influence future infrastructure financing and risk‑assessment frameworks.
The Auditor‑General’s report does not outline remedial steps, but its identification of the weaknesses is expected to trigger further scrutiny by the Ministry of Works and the respective state authorities as they seek to resolve the pending claims and accelerate the completion of the remaining work packages.
Related: Ministry of Works · Sarawak