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LABUAN: The long-awaited demolition of the abandoned Hotel Labuan is expected to face delays following allegations of irregularities in the tender awarding process, prompting a complaint to the Malaysian Anti-Corruption Commission (MACC).

The 11-storey hotel, which has remained closed since November 1997, was slated for demolition under a tender called by Labuan Corporation with an indicative value of RM5.467 million. 

The project was expected to take between 32 to 36 weeks to complete. More than 10 companies from peninsula have submitted bids for the demolition project, with the tender closing before April 30, 2025. 

However, the process has now come under scrutiny after a local contractor filed a complaint with MACC on June 16, 2025.

The complainant, a Labuan-based company, has called for the suspension of all demolition work pending the outcome of investigations. 

The firm expressed frustration that despite being qualified, possessing necessary certifications and submitting a competitive bid lower than the winning company, it was ultimately sidelined in favour of an outside contractor.

Among key concerns raised include lack of transparency, preference for outside contractors, limited local opportunities, pattern of exclusion and suspected political interference. 

The local company claims it met all requirements and was shortlisted in the final phase but was inexplicably excluded from the final selection.

Questions were raised about why a qualified local company was overlooked in favour of a contractor from outside Labuan.

The complaint noted that projects for CIDB G6 classification contractors in Labuan are extremely limited, with few local contractors registered under the B26 licence category.

Concerns were expressed about a perceived pattern of favouring outside contractors over local firms, despite the presence of competent local companies.

The most serious allegation involves potential political interference from higher authorities in the tender process.

The complainant has called for a comprehensive MACC investigation to determine whether irregularities and external pressure influenced the tender awarding process.

The tender was initially called on March 19, 2025, targeting registered qualified contractors for the demolition of the iconic hotel that has stood vacant for nearly three decades. 

The outcome of the MACC investigation will likely determine whether the project proceeds as planned or faces further delays.