KOTA KINABALU: The proposed flood mitigation, irrigation and drainage scheme with a Chinese Fortune 500 company for Sabah could not take off because of local opposition to it as well as a federal ban on the export of sand.

Deputy Chief Minister I Datuk Seri Dr Jeffrey Kitingan said in a statement on Sunday (Sept 21) they had hoped to structure financing for the RM17bil project via the sale of sand and carbon credits.

He said the planned project failed to take off after a memorandum of understanding was signed on March 15, 2024 between the Irrigation and Drainage Department and Shaanxi Construction Engineering Malaysia Sdn Bhd (SCEM).

Under the MOU, a potential financing requirement was estimated at RM17bil, which could have created up to 20,000 job opportunities, he said.

"Contrary to speculation, no funds were ever received under this MOU. The document was merely an expression of interest and did not constitute any binding financial commitment," he said.

He added the MOU only permitted the company to carry out due diligence and feasibility studies in 11 districts identified for flood mitigation, irrigation and drainage projects.

He also said claims that RM17bil had been misused or diverted were baseless as the project was never implemented and no funds were ever received.