Call for more speedy awarding of projects

KUALA LUMPUR (Nov 21): The Master Builders Association of Malaysia (MBAM) is concerned that the construction sector may underperform this year if the sector's fourth quarter (4Q) performance does not improve substantially, it said in statement on Monday.

The statement was released following Bank Negara Malaysia's announcement that the construction sector had seen only 3% growth in 3Q 2011. The sector grew by only 3.8% and 0.6% in the first two quarters of 2011 respectively. The overall growth for 2010 was 5.3%.

"Major building material producers, such as cement and steel manufacturers, have been reporting lesser demands for the year to date," said MBAM president Kwan Foh Kwai in the statement. "As the construction industry has a multiplying impact on over 140 other industries, MBAM urges the government to immediately speed up the award of new projects — in particular, those projects with high impact to the economy.

"For projects involving foreign direct investments (FDI) and domestic investors, the timely issue of construction permits will further improve confidence of the investors," Kwan added.

The statement said that while MBAM applauded the government's assertion that the construction sector will drive the national economy in 2012 by a budgeted growth of 7%, much has to be done now to meet this target, especially when the Malaysian construction industry is set to grow by a bullish RM92 billion in 2012 from RM85 billion this year. "[The] timely awards and implementation of projects as per the 10th Malaysia Plan (10MP) and the Economic Transformation Programme (ETP) from now will contribute positively to the growth in 2012, as the projects require a gestation period in order to generate impact to the economy," Kwan said.

A planned and progressive award of projects will reduce any abrupt increase in demands for building materials and manpower — which may jeopardise the targeted growth due to temporary shortages in supply — as well as preventing unnecessary price increases, which will burden contractors.

"The MBAM will cooperate fully with all initiatives by the government to support a sustainable growth of the national economy and the Malaysian construction sector. One such example is the imminent enactment of the proposed Construction Industry Payment and Adjudication Act (CIPAA), which will make the industry more healthy and sustainable for all players of the industry," Kwan said, adding that the construction industry, thanks to the impact of its multiplying effects, will hopefully be able to continue to be the engine of growth if the industry pulls together.