The cost of the Sarawak portion of the Pan Borneo Highway will is expected to reduce by about RM3.1 billion or 14 percent, by moving away from the project delivery partner (PDP) model.

In a statement today, Finance Minister Lim Guan Eng explained a key component which resulted in the savings was the removal of a need to pay the PDP 5.5 percent of the project cost in fees.

This was finalised today following the signing of a mutual termination letter between the federal government, Sarawak government and DanaInfra Nasional Bhd.

A new project funding agreement between the federal government and DanaInfra was also signed today and will take effect on Feb 20.

Lim said that the savings from the project would be channelled to other projects that would benefit Sarawak in the future.

DanaInfra was set up by Putrajaya in 2010 as a special purpose vehicle to finance the MRT project and subsequently the Sarawak portion of the Pan Borneo Highway.

The PDP for the Sarawak portion of the highway is Lebuhraya Borneo Utara Sdn Bhd (LBU). This company is believed to be linked to Bustari Yusuf.

Bustari's brother Fadillah was works minister in 2015 when LBU snagged the contract. Bustari is also known to enjoy close ties with former prime minister Najib Abdul Razak.

LBU received its PDP termination letter on Sept 20.