AUGUST 2022 PRESIDENT MESSAGE
CHANGES TO VARIATION OF PRICE (VOP) AND ADDITIONAL INITIATIVES PROVIDED TO HELP CONTRACTORS POST PANDEMIC FOR GOVERNMENT CONTRACTS
On 14th July 2022, Prime Minister YAB Datuk Seri Ismail Sabri Yaakob announced the addition of building materials that will help ease contractor’s burden handling public works projects following the steep hike of almost every building material cost. The VOP material list which originally had 4 items has been added with extra 11 building materials. MBAM is grateful for the Government’s intervention and support for the Malaysian construction industry with regards to changes to VOP and welcomes the additional initiatives provided to help contractors post pandemic for government contracts.
Under provision 9, Treasury Malaysia circular (PK 2.4), variation of price (VOP) and additional initiatives by government to assist contractors post COVID-19 for government contracts (Amendments on 15 July 2022), besides the VOP, the government has agreed to implement additional initiatives for helping the contractors such as Extension of Time (EOT), subject to a maximum period of six months and the Superintendent Officer /Project Director’s evaluation on contractors application for EOT as well as early release of retention money up to 50% subject to progress of work exceeded 60%. Although the provision is only applied to the public contracts, we hope that private project owners would consider and implement the same which would further facilitate the progress of projects.
MANPOWER POLICY
MBAM would also like to laud the Government and the Ministry of Trade and Industry (MITI) for the 2-year deferment of 80:20 local-to-foreign worker ratio in the foreign worker quota. The new foreign worker quota has been enforced for the manufacturing sector since the lifting of the freeze on foreign worker recruitment from February 15, 2022 and has impacted various business communities across the construction industry supply chain. Thus, the deferment of the ruling would bring great relief to the industry albeit it being a temporary measure.
MBAM also notes the recent Government’s announcement that Construction Labour Exchange Centre Berhad’s (CLAB) is to manage the entry of foreign workers for the construction sector. MBAM will continue to monitor the intake of foreign workers for the construction industry and inform the members of any further development.
Pertaining to the issues of bringing in foreign workers, we have also appealed to the government for a shorter and simplified process and are constantly monitoring developments for a final concrete process decided by the government as we know many contractors are having difficulties in getting foreign workers.
Additionally, as the country moves into the third year of the 12th Malaysia Plan in 2023, we appeal to the government to provide more budget allocation in 2023 for public expenditures on projects which will create more jobs and volume to help the construction industry.
On another note, as August 31st is nearly approaching, I would also like to wish all our readers “Selamat Hari Merdeka”. As we celebrate our country’s independence, I would also like to call upon the Malaysian youth and our local workers to take on the challenge of joining the construction industry workforce. The opportunities are endless and together, we can make a difference for the construction industry.
Oliver HC Wee KMN AMN
MBAM President