Friday, March 24

SBCECA: Not much boost for construction industry under Budget 2023


James Ha

KUCHING (Oct 9): There is not much boost for the construction industry under Budget 2023, says Sarawak Building and Civil Engineering Contractors Association (SBCECA) chairman James Ha.

He also observes the lack of incentives and mega infrastructure projects in the national budget, saying that most of those mentioned during the tabling are already in progress.

“There’s no big boost for the construction industry, no mega projects announced, no financial assistance for contractors like giving the six-month LAD (liquidated ascertained damages) waiver for late project completion.

“Also no incentive given to contractors for using IBS (Industrialised Building System) or digitalisation,” he told The Borneo Post when contacted yesterday.

He also pointed out that the situation had grown more challenging for the industry in view of the rising costs of construction inputs and resources including raw materials.

“All contractors have suffered huge losses. Even with the current VOP (Variation of Price) announced by the government, it has yet to give contractors any meaningful financial compensation.

“The government should encourage the standardisation of designs in public projects and provide rebates or tax incentives to contractors who adopt the new technology because buying equipment to handle IBS is highly costly – about 20 to 30 per cent more than the conventional method.

“For Sarawak, the costs would be much higher due to the high logistics cost and our poor connectivity in the transportation system.”

Ha also called upon the government to relook at its bureaucratic processes.

“It takes a long time for the implementing agencies to assess and approve any contractor’s claim, and to pay the contractors.

“By the time the contractors receive money, it would have already been nine to 12 months late. That’s one of reason why more projects have become sick and get terminated.

“The government would happily spend 70 to 100 percent more than the original contract sum to get ‘rescue contractors’ take over the terminated projects, but unwilling to give 20 to 30 per cent ex gratia payment to actually help existing contractors finish the project,” he lamented.

On another matter, Ha also warned that failure to address the shortage of foreign labour would further delay the completion of projects – a circumstance that could cost the government billions of ringgit.

“The Home Ministry system still needs improvements. More illegal (foreigners are) coming in than the legal ones.

“The damage has been done, and it would require more time for the construction industry to recover,” he pointed out.