RM400 mln to cover price variations

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KUCHING: The state government has set aside RM400 million to cover for price variations in government work contracts resulting from relaxation of its procurement policy amidst Covid-19.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said this is needed to support businesses in the construction sector.

“The Sarawak government will ease the government procurement policy due to the pandemic by allowing variation of price for works contracts.

“This is a consequence of severe surge in prices for certain construction materials due to the global impact of Covid-19 pandemic.

“The government will bear the cost estimated at approximately RM400 million for allowing the variation in price,” he said when unveiling the Sarawakku Sayang Special Assistance (BKSS) 7.0 on Wednesday (Aug 4).

Besides that, the chief minister said it would grant an automatic extension of time (EOT) as a direct consequence of the movement control order (MCO) 3.0. This applies for on-going projects with completion date not within the MCO 3.0 period.

“Projects with scheduled completion dates expiring within the MCO 3.0 period will be granted EOT of maximum 60 days,” he said.

The chief minister said in view of the EOT, the liquidated and ascertained damages (LAD) already imposed shall be waived during the gazetted MCO period.

At the same time, Abang Johari said payment valuations and assessments shall be automatically carried out at the end of every month.

“This is without having to wait for contractor’s written detailed applications for payment claims and to allow minimum interim payment of RM1,000 monthly for all state contracts.

He added, payments would also be allowed to consultants’ site supervision teams during any MCO period subject to the terms and conditions which would be determined subsequently.

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