Small contractors short-changed
by Philip Kiew, email@example.com. Posted on June 21, 2012, Thursday
MIRI: Sub-contracting works in Samalaju industrial estate, which is one of the main players of Sarawak Corridor of Renewable Energy (SCORE), can be a massive six level deep, and this has proved to be a living hell for small-time contractors.
These small-time local sub-contractors thought SCORE was a gold mine and they jumped into the bandwagon, only to find out later that their move might mean closure of their business as their upline sub-contractors played hide-and-seek with them.
Some of them complained that even though they had completed infrastructure works some six months ago, payment was still not forthcoming.
A Miri-based firm said they knew of at least 10 Sarawakian companies which are now in dire financial straits as the main contractors washed their hands off all problems besieging them despite appeals for intervention.
These companies are said to be from Betong, Sibu, Miri and Bintulu.
“One of the common pitfalls encountered by the small-time contractors is failure to get paid for work done, paid less than work done, or delays in getting paid by clients.
“For small time contractors, not getting paid or being delayed in payment can be a matter of life and death as they do not have the staying power of big businesses,” said a contractor who requested anonymity.
He said a delay of payment for up to six months often meant the victims had to close shop as their cash flow got choked and they had nothing left to run their business.
He claimed that the problem in Samalaju was that the main contracts were awarded to giant corporations who dished out the work to sub-contractors, who in turn appointed sub-contractors.
“The chain of sub-contractors can be between four to six layers deep. For instance, my company is in layer number 5 and we have not been paid even though we completed scaffolding work in the middle of last December for a polycrystalline silicon manufacturing plant!
“Problem starts when our upline sub-contractor fails to pay us.”
He said everybody seemed to play dead because all letters and requests for help sent to the main contractor, authorities of Samalaju, and other relevant bodies never receive any reply.
Calling for a stop to such an unhealthy business environment, he believed that SCORE was only good for the big boys.
“If nothing is done to right the wrong, small time businessman will be left out and will not be able to play any role at all in SCORE.
“By right, SCORE should be a provider of many business opportunities to Sarawakian companies both big and small.”
To solve such problems in future, he suggested that the giant firms exercise extreme care when selecting their contractors and sub-contractors. They should also make it a point to help out whenever problems happen down the line.
“The interest of both big and small contractors should be equally safeguarded. Many small Sarawakian players are doing the actual job on the ground and the least the authorities could do is to ensure they are not exploited in the development of SCORE.”