THE Sabah Pan Borneo Highway Phase 1 project remains largely incomplete more than a decade after it was planned, with only four of its 35 work packages completed as of March 31, the Auditor-General’s Report 2/2026 has found.
Auditor-General Datuk Seri Wan Suraya Wan Mohd Radzi said the four completed packages accounted for just 11.4 per cent of the 706-kilometre project, with an original cost of RM567 million.
The remaining 31 packages, valued at RM16.319 billion, were still under construction, she said.
“Of the 31 projects under implementation, nine work packages are sick projects, 13 work packages are behind schedule and nine work packages are ahead of schedule,” she said in a statement on the Auditor-General’s Report 2/2026 tabled in Parliament today.
The audit also identified serious irregularities in project management, including approvals for Variation Orders exceeding authorised limits by RM513.99 million and delays in claiming RM41.37 million in utility relocation costs for completed projects.
For the Sarawak Pan Borneo Highway project, 10 work packages had been fully completed while Work Package 11 had reached 99.9 per cent completion as of March 31.
Wan Suraya said the achievement of the Sarawak project’s objectives could not yet be assessed as the overall project had not been fully completed.
The audit also found weaknesses in project management and contract governance, including outstanding claims amounting to RM1.780 billion for utility relocation and reinstatement.
In addition, RM32.07 million had been paid for a Project Information System that could no longer be accessed after the agreement expired.
Meanwhile, follow-up action on audit findings had resulted in RM920.91 million being collected or repaid to the government as of Sept 28.
Wan Suraya said 12,117, or 94.4 per cent, of 12,835 audit issues had been resolved through follow-up action involving penalties, outstanding rent, Liquidated Ascertained Damages (LAD), land lease arrears, duties and taxes.
“All issues raised in the Auditor-General's Report are continuously monitored through the Auditor-General's Dashboard (AGD) until corrective action is taken by the responsible parties,” she said.
She said the AGD had been enhanced since 2024 to provide a real-time platform for monitoring audit issues and recommendations.
All 13 state governments’ financial statements for the financial year ended Dec 31, 2025 had also been audited.
“Six states received an unqualified opinion, six received an unqualified opinion with an Other Matter paragraph, while one state received an unqualified opinion with an Emphasis of Matter and Other Matter paragraphs,” she said.
The Auditor-General’s Department also issued certificates for 298 state agencies for the 2024 financial year and reported findings from performance audits involving 22 state government programmes and activities.
Detailed audits of 12 state-owned companies across 11 states also uncovered significant issues, including weaknesses in compliance with corporate governance requirements.
Wan Suraya said 38 recommendations had been made in the Auditor-General’s Report 2/2026 for implementation by audited federal ministries and departments.
The AGD currently lists 650 issues from the report, comprising 347 under follow-up, 23 resolved and 280 requiring no further action. - October 5, 2026
