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MBAM: Small and medium firms at risk of closure
PETALING JAYA: The continuing impact of unprecedented price increase and shortage of building materials will lead to project delays and cost overruns, Master Builders Association Malaysia (MBAM) has warned. President Ng Kee Leen said if these problems persisted, small and medium construction companies might be forced to close down and projects abandoned.
“MBAM urges the enforcement agencies under the Domestic Trade and Consumer Affairs Ministry to intervene, stabilise prices, prevent cartel or monopoly actions and curb hoarding of essential building materials like steel bars and cement,” he said at MBAM’s 54th anniversary dinner here last Friday.
Ng said since 2006, prices of steel bars, although a price-controlled item, had escalated from RM1,200 to RM3,600 per tonne recently.
He said while MBAM appreciated the Government’s efforts to liberalise the market for steel bars to stabilise its supply effective May 12, its members were still unable to import a single rod of steel bar through the local ports.
“As a result, our construction industry is losing more than RM100mil every month. We also urge the Government to clarify, streamline and update the IT system and procedures with other relevant ministries and departments on import of steel bars, to avoid further confusion, delays and losses,” he said.
He also urged the Government to consider imposing an export tax of 15% for all steel bars and billets, as practised by countries like China and India, to ensure adequate domestic market supply and at fair prices.
“This measure has been effective in controlling steel bar prices in China at under RM3,000 per tonne, compared with Malaysia’s local price of more than RM4,000 per tonne,” he said, adding that MBAM also wanted the 10% import tax on cement to be abolished, and an export tax be imposed instead if the situation worsened.
Another problem is the acute shortage of qualified personnel like engineers, quantity surveyors, project managers and site supervisors.
“This perennial problem is mainly due to higher wages and perks offered by Middle Eastern countries, India and Singapore. Another contributing factor to the brain drain and skill drain is the 10 consecutive quarters of negative growth of the Malaysian construction industry from 2004 to third quarter of 2006.
“We predict that the projected growth of 5.5% for the construction sector in the Ninth Malaysia Plan is likely to be reviewed downwards in view of all these issues,” Ng added.
MBAM past president Datuk Lai Foot Kong was made an honorary life president at the dinner. - The Star
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