by SHAFIQQUL ALIFF / pic by MUHD AMIN NAHARUL

BUILDERS and construction associations in the country are seeking the government’s intervention to manage the increase of building materials prices.

According to the industry players, the building materials prices have been on the steep rising trend in the recent months that has directly caused between 13% and 20% hike in construction costs.

“Some items which have shown drastic increases include mild steel price, up to 41% and sand (20%) since October 2020. Such a situation has put companies’ already dwindling profit margins (if any), under pressure,” the associations said in a statement yesterday.

The statement was signed by the Master Builders Association Malaysia, Real Estate and Housing Developers’ Association Malaysia, Persatuan Kontraktor Melayu Malaysia, Persatuan Kontraktor Bumiputera Malaysia, Guild of Bumiputera Contractors Wibawa, The United Malaysia Contractors Association and Persatuan Kontraktor India Malaysia.

“We fervently hope that immediate measures to overcome these very pressing issues can be taken to address the rising costs of building materials.

“If left unattended, the matter would prolong and it can easily lead to loss-making projects and cashflow crunch.

“Developers may have no choice but to pass the extra cost into higher house prices which will ultimately burden the rakyat while contractors who are not able to absorb the extra cost may have to resort to halt their work,” they said.

The associations proposed for the government to conduct continuous monitoring and necessary enforcement to ensure there is no profiteering and anti-competition in the whole supply chain of the industry.

They also requested for the entry of foreign workers to ease the current shortage to be expedited.

Additionally, they seek for the variation of price (VoP) clause in contracts for government projects to be extended for at least another 12 months while the government should encourage the project owners to introduce VoP in their contracts for private projects.

The association also stated private sector projects comprised 65% of the total projects awarded up to October 2021, based on the data by the Construction Industry Development Board and Department of Statistics Malaysia.

It stated with such huge numbers undertaken by the private sector, it is imperative to give the same priority accorded to other sectors, to the building and construction sector otherwise the efforts towards economic recovery would be derailed prematurely.