Pan Borneo Highway a game changer for Sarawak’s economic growth

The potential benefits to Malaysia are ultimately better economic growth and improved connectivity 


CIVILISATIONS in Sarawak began in riverine areas when the only means of transport were rafts and small boats. 

Later, bigger boats were built to cross seas before the advent of ships that continued to increase in size over the past decades, transporting huge amounts of cargo for international trade. 

Settlements started to grow where roads were built in the interior of Sarawak, with villages at strategic locations, served by both river and road transport, turning into towns as their economy grew. In the hinterland, trees were cut down for timber and the once jungle replanted with oil palms or cash crops. OK

As the state looks to boost its growth, the Pan Borneo Highway (PBH) Sarawak, part of the Trans Borneo Highway that will link with the PBH in Sabah, is expected to be a game-changer for Sarawak’s economy and connectivity. The highway runs through the state from Telok Melano down south up to Miri in the north and is expected to have a transformative impact on the social and economic landscape of the Land of the Hornbills. 

According to Infrastructure and Port Development Minister Datuk Amar Douglass Uggah Embas, the Sarawak segment of the PBH is 94% complete as at April 2023. 

The 786.41km highway has been divided into 25 sections with 11 work packages and is projected to be completed in 2026. 

Douglas stated during the Sarawak Legislative Assembly (DUN) in May this year that four additional sections have been completed —Kuching-Serian Road (5km), Pantu (41km), Betong (34km) and Baku (42km) — while the remaining 13 sections are nearing completion with progress ranging from 85% to 95%. However, only the 34.5km of the Lambir section will be completed by the end of 2023, while the remaining 4.5km will be completed in 2026 due to technical issues. 

Concurrently, Deputy Works Minister Datuk Seri Abdul Rahman Mohamad said during the Dewan Rakyat sitting in June that 10 work packages from Semantan to Miri are expected to be completed in November this year, excluding several sections in Miri (expected to complete in 2025) due to reconstruction. 

The entire project, which was announced in Budget 2015, was intended to be finished by 2023 for the Sarawakian section and 2025 for the Sabahan section at a cost of RM27 billion. 

However, the total cost of the Sarawak portion of the highway was updated in February 2020 to RM18.8 billion following a new funding agreement (from RM21.9 billion including other charges such as project delivery partner (PDP) fees, engineering consultancy and contingencies totaling RM5.37 billion) from RM16.5 billion previously reported. 

Benefits of PBH Sarawak 

Transport business consultant YS Chan opined that the second wave of civilisation will come with the completion of the PBH’s portion in Sarawak, which is about the same length as the North-South Expressway (NSE) in Peninsular Malaysia that was completed some 30 years ago, this reducing travel time by half and making road trips much safer. 

His main concern is whether the PBH will use closed-system toll plazas like the NSE, open-system or no toll at all because according to him, whatever decision is made will have a significant impact on users. 

He said there will be strong lobbying with local politicians preferring no toll or, at worst, open-system toll plazas, allowing rapid but uncontrolled expansion. 

In Malaysia, the closed system allows the highway operator and authorities full control of economic activities on both sides of the highway as vehicles are not allowed to stop by the roadside to sell their wares and villages are forbidden to operate makeshift stalls to sell their produce, including seasonal fruits. 

Chan said for expressways or highways, there should be minimal interruption to traffic or distraction for motorists, unlike normal or large trunk roads that have countless side roads that not only slow down traffic but also pose a danger due to vehicles turning in or exiting from them. 

A closed system can also prevent overloaded and leaking vehicles from using and rapidly destroying the road surface of the highway. 

“If the PBH is left to its own devices (free-for-all), it will soon be littered with potholes, clogged with slow vehicles and its journey time reduced to normal. 

“The idea is to build enough exits so that new homes, factories and farms can be developed and served by these new side roads, which can also connect to surrounding villages and towns. 

“In this sense, the PBH would serve as a catalyst for the growth of much of the land surrounding it,” he told The Malaysian Reserve (TMR). 

He also believes that in the distant future, it would be feasible to build a railway track parallel to the PBH to transport a massive amount of cargo at a lower cost and reduce heavy traffic along the highway — albeit the authorities, including the federal government, ought to have short, medium- and long-term plans for growth along the PBH. 

Last but not least, he stated that the PBH will benefit both domestic and foreign visitors as it can be romanticised and sold as an epic road trip, whether travelling as a passenger on a tour bus or driving a rented vehicle or riding a high-powered motorcycle on a highway dotted with motels and restaurants. 

UPM’s Law says the PBH could become a significant transportation corridor, also as part of a larger network connecting Malaysia, Brunei and Indonesia

Concurrently, Universiti Putra Malaysia (UPM) Road Safety Research Centre, head from the Faculty of Engineering, Prof Dr Law Teik Hua believes that the completion of PBH in both states will benefit several sectors. 

These include infrastructure and connectivity through enhancing accessibility, reducing travel time and stimulating economic activities. 

It will also boost economic growth by attracting investment, promoting trade and boosting tourism, which will benefit businesses. Tourism and trade will benefit as PBH will attract tourists to less-visited areas, benefitting local tourism and communities. PBH will also boost agriculture and rural development by facilitating transportation of agricultural products. 

The highway will also generate jobs in construction and maintenance, which can foster economic activity, plus promote social and cultural exchange by fostering knowledge sharing and social cohesion. 

Moreover, it will improve access to healthcare and education, boost real estate development and expand housing options, and help protect the environment by mitigating congestion and reducing emissions in urban areas. 

In terms of connecting Malaysia with Brunei and Indonesia (via northern Sarawak including inroad) through PBH, Law said this will benefit Malaysia through trade boost due to the improved connections easing cross-border movement of goods, making Malaysian products more competitive internationally. 

There will also be easier access for tourism between countries, benefitting local industries on both sides, and more infrastructure opportunities through joint projects that will create opportunities for Malaysian construction firms and enhance regional cooperation. 

The PBH will also encourage energy and resource exchanges, leading to mutual benefits. It will enhance links to foster academic collaborations and student mobility, attracting foreign students and boosting the economy. 

Additionally, Malaysia could turn into a regional logistic hub, attracting investment and creating jobs in transportation and logistics. The better connections can also boost foreign investment in Sarawak, as well as diplomatic relations by strengthening ties and cooperation on various issues. 

The highway can also strengthen economic resilience by reducing dependency on single markets through diverse connections. It also plays an important role in integrating the state tourism segment into regional circuits, encouraging longer stays and exploration across countries. 

The 786.41km PBH Sarawak has been divided into 25 sections with 11 work packages and is projected to be completed in 2026 (pic

Construction Challenges 

Law said due to the region’s physical and environmental characteristics, the construction and development of the PBH in East Malaysia present distinct challenges compared to those in Peninsular Malaysia. 

He said the development of PBH takes into account the geography and terrain as East Malaysia is distinguished by rough terrain, dense forests and mountainous regions. As a result, developing highways in such difficult terrain necessitates substantial engineering skill and planning. 

Owing to the fact that the region is home to rich biodiversity and protected ecosystems, construction must adhere to stringent environmental regulations to minimise ecological impact. This frequently entails constructing elevated or particularly built parts to protect natural habitats. 

Hence, environmental protection is critical and must be thoroughly studied. 

Given the various rivers and streams that crisscross East Malaysia, creating bridges and ensuring flood-resistant infrastructure is also crucial, adding complexity and cost to the project. Furthermore, the highway runs through distant and isolated locations with limited access to supplies and labour. Hence, improving connectivity to these areas necessitates careful logistical planning and the development of work camps. 

Another distinguishing feature is the weather and climate. 

East Malaysia is subject to significant rainfall and tropical weather patterns, which can have an impact on development timelines and infrastructure durability. As a result, good drainage and weather-resistant building materials are essential.

As indigenous populations frequently inhabit these areas, community engagement is particularly important. Collaboration with these communities, protecting their rights and ensuring they benefit from development, is a critical component of the project. 

Last but not least, due to the challenges mentioned, the PBH is more expensive to build than highways in Peninsular Malaysia. As a result, effective budget allocation and resource management are required to assure the project’s success. 

Connecting with Indonesia’s Future Capital

Law previously told TMR that the highway is significant because it prepares the country to link with the future capital of Indonesia in Kalimantan, Nusantara. He said the idea that the PBH prepares Malaysia for connecting with Nusantara holds strategic and economic significance. Indonesia’s decision to relocate its capital from Jakarta to East Kalimantan (a province on the island of Borneo) represents a significant upheaval in the country’s administrative and economic environment. 

This action will pave the way for stronger commercial connections and increased connectivity between Indonesia and its neighbours, notably Malaysia. 

In terms of investment and economic growth, Law believes that the improved connectivity will attract more Malaysian investments into Indonesia’s East Kalimantan region, leading businesses from both countries to explore joint ventures and expansion opportunities, thereby stimulating economic growth on both sides of the border. 

In terms of infrastructure development, collaborative infrastructure projects such as border crossings and customs facilities can help to streamline cross-border trade and improve the flow of commodities. 

Closer economic relations and common interests in infrastructure development can also foster regional stability and collaboration, particularly within the context of Asean. 

Law added that the PBH could become a significant transportation corridor, not only connecting Malaysia and Indonesia’s East Kalimantan, but also as part of a larger network connecting South-East Asian countries (Malaysia, Brunei and Indonesia), fostering economic integration. 

Law emphasised that despite the challenges, PBH’s potential benefits to Malaysia are ultimately better economic growth and improved connectivity. 

  • This article first appeared in The Malaysian Reserve weekly print edition