Share
KUALA LUMPUR: Syarikat Perumahan Negara Bhd (SPNB) plans to do away with the RM2,500 retention money imposed on contractors involved in future Rumah Mesra Rakyat (RMR) projects.
SPNB chairman Datuk Ir Idris Haron said the move would help contractors achieve higher profit margins.
"Our projects involve a small cost of about RM70,000 only. Retention money will only affect their profit margin which is already small," he told reporters after the handing over of job indents to RMR programme contractors here on Wednesday, Dec 22.
"With the construction industry in a pressing situation, their profit is only around RM5,000 to RM10,000. With retention money, their profit will decrease and this will eventually affect construction quality," he said.
Retention money is a sum held back by SPNB from progress payments to contractors as security against defects. It is released at the end of the defect warranty period, which is usually one year after the completion of projects.
At the function, 203 Bumiputera contractors were awarded job indents for RMR projects in Terengganu, Kelantan, Kedah, Penang and Johor.
"SPNB has received 43,859 applications for RMR projects nationwide and from the total, 17,971 applications with allocations worth RM1.1 billion have been approved," Idris said.
Over the past 10 years, SPNB has completed 15,017 RMR units worth RM840 million. — Bernama
SPNB chairman Datuk Ir Idris Haron said the move would help contractors achieve higher profit margins.
"Our projects involve a small cost of about RM70,000 only. Retention money will only affect their profit margin which is already small," he told reporters after the handing over of job indents to RMR programme contractors here on Wednesday, Dec 22.
"With the construction industry in a pressing situation, their profit is only around RM5,000 to RM10,000. With retention money, their profit will decrease and this will eventually affect construction quality," he said.
Retention money is a sum held back by SPNB from progress payments to contractors as security against defects. It is released at the end of the defect warranty period, which is usually one year after the completion of projects.
At the function, 203 Bumiputera contractors were awarded job indents for RMR projects in Terengganu, Kelantan, Kedah, Penang and Johor.
"SPNB has received 43,859 applications for RMR projects nationwide and from the total, 17,971 applications with allocations worth RM1.1 billion have been approved," Idris said.
Over the past 10 years, SPNB has completed 15,017 RMR units worth RM840 million. — Bernama
SHARE
