Help us cope with increasing costs: Contractors association

James Ha Tung Ing

KUCHING: The Sarawak Building and Civil Engineering Contractors Association (SBCECA) is appealing to the federal and state governments to implement early additional measures to help its members cope with increasing construction costs.

In a statement today, SBCECA chairman James Ha Tung Ing hoped that the federal and state governments would allow contractors to catch up with their projects without being penalised for reasons not due to them and to tender for new government jobs in confidence that only reasonable risks were allocated to the contractors.

“We would like to first propose the re-introduction of the material price fluctuation clause in existing and new government projects. Once implemented, this can be a fast and efficient way to assist and ensure that the continuously increasing material prices do not impact contractors so heavily such as to slow progress and cause sick projects. 

“Secondly, for the government implementation agencies like the Public Works Department (JKR) to be allowed to hold in abeyance the requirement of minimum amount of valuation in the monthly interim payment as in the contracts and also shorten the period of honouring payment certificates. This is to assist the contractors in their ongoing projects so they are able to maintain cash flows, sustain and survive throughout the pandemic.  

“Thirdly, the government should grant upon application by contractors and direct implementation agencies further extension of time of 90 days besides the 84 days initially granted which covers the MCO (movement control order) and conditional movement control order (CMCO) period of March to June 2020 in many government contracts. This additional extension of time is for the reason of force majeure for the period from July 2020 to April 2021,” he said.

Ha added that the third proposal is necessary and in line with the rationale stated in the JKR Malaysia Circular dated June 22, 2020 and also due to the frequent changes of the MCO status based on the severity of the Covid-19 pandemic throughout the period of time.

“The standard operating procedures (SOPs) implemented during that period of time had definitely affected construction works,” he said.

“The rate of construction building material cost and other operational costs like logistics increment for the past 12 months had been tremendously high. This had ranged from 20 percent to as high as 40 percent for construction materials compared with those before the implementation of the MCO,” Ha said.

He pointed out that the increases had greatly impacted the members and other contractors who had fixed price contracts.

“We are grateful to the government for the vast development projects currently planned and implemented such as the Sarawak Coastal and Second Trunk Road projects, water supply projects, Pan-Borneo Highway and other development projects in the rural areas.

“In view of all these projects, especially the ongoing ones, we strongly believe that substantial volumes of construction materials are needed to be procured now and throughout the next three to five years for construction purposes,” said Ha.