Master Builders Association Malaysia (MBAM) said that government needs to intervene on the high building material prices and had proposed the following solutions
In a statement, it said that among the suggestions is that manufacturers and suppliers lock in price for all orders placed, otherwise it defeats the purpose of lock-in price for projects. For additional new orders or new supplies proposed to negotiate on the price.
In addition, the variation of price (VOP) in government contract projects should be extended to 31 December 2022 and beyond if necessary. The prices currently used for VOP is not reflective of the actual market prices as such contractors lose out. “Proposed the Government adopt the materials prices published by Construction Industry Development Board Malaysia (CIDB) who is the custodian of the construction industry,” it said.
MBAM said that the cope of building materials should be extended to include Mechanical and Electrical items that have seen price increase but is not included in the list for VOP.
It said that MBAM had written and voiced this issue to the relevant agencies but with no positive outcome. “Furthermore, we propose the VOP be adopted in private projects and be included in Pertubuhan Akitek Malaysia (PAM) contract form and the Institution of Engineers, Malaysia (IEM) contract form,” it said.
MBAM also suggested price increase to be staggered say over a period of 3- 6 months instead of a sudden big increase of price in one go. It is said that this will not only prevent extreme price fluctuation but also help contractors to mitigate their cash flow and losses.
MBAM appeal to the Government to temporarily exempt import duties of raw materials and also to provide subsidy/grants to manufacturers to mitigate the increase of production cost. In addition, MBAM seeks for the Government to subsidise the rising cost of raw materials in order for prices to stabilise.
MBAM also said that it hoped that manufacturers of building materials could provide a detailed breakdown of raw materials cost, energy cost e.g. to peg the price of building materials with International prices and allow it for up and down accordingly.
In addition, it said that it urges the Government to seriously consider an exemption for Construction Industry Development Board Malaysia (CIDB) payment of levy for 12 months to support contractors especially the smaller ones in the G1 to G3 category. We also hope the Government
