Malaysia’s Mabul Island Forward Base Faces Delays and Cost Overruns, Audit Finds

Audit Reveals Delays and Cost Overruns in Sabah’s Strategic Forward Base Project

Mohd Hanif Ismail - : Oct 8, 2025 - : 2:59 pm

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The Malaysian Auditor-General’s Report (LKAN 3/2025) has revealed significant delays and management lapses in the construction of a Forward Operating Base (FOB) on Mabul Island, off the coast of Semporna, Sabah. Originally planned in 2016 and approved under the Eleventh Malaysia Plan (RMKe-11), the project remains incomplete nearly a decade later — raising concerns about the country’s maritime security preparedness in the region.

The project, intended to enhance surveillance and operational control within the Eastern Sabah Security Zone (ESSZONE), was designed to strengthen Malaysia’s response to piracy, kidnapping, and smuggling threats along its eastern coastline. Managed under the Ministry of Home Affairs and the Ministry of Works, with coordination from the Eastern Sabah Security Command (ESSCOM) and the Public Works Department (JKR), the project was expected to be a cornerstone of Malaysia’s defence infrastructure in the East.

However, the audit highlighted that between June and July 2023, no workers were stationed at the project site, and the contractor subsequently withdrew on 1 August 2023, citing cost increases, unsuitability of the original landing point location, and unresolved land approval issues. The government later issued a notice to terminate the contractor’s services on 6 September 2023 due to non-performance.

In May 2025, a Notice of Change (NOC) was approved, increasing the project’s ceiling cost by RM28.7 million (approximately USD 6.07 million). Despite this, completion remains pending. Audit findings also indicated that construction of resettlement buildings was delayed by 254 days, resulting in the imposition of liquidated ascertained damages (LAD) amounting to RM68,303.14 (around USD 14,400). Additionally, main building works were 8% behind schedule, and the jetty component had yet to commence due to delays in sea land surveying and gazettement.

The Auditor-General’s recommendations emphasised stronger project coordination among federal and state agencies, expedited resolution of land approval issues, and the prompt appointment of a new contractor with proven financial and technical capacity. The report further advised the government to pursue compensation claims in accordance with contractual rights.

The Mabul Island FOB project is part of Malaysia’s broader effort to enhance its maritime security posture in the Asia-Pacific region — a strategic imperative as tensions rise in nearby waters such as the South China Sea. Delays in such critical infrastructure risk not only budgetary inefficiencies but also operational vulnerabilities in areas facing cross-border incursions and transnational crimes.