KUALA LUMPUR (Sept 30): The local construction industry is estimated to have suffered losses amounting to RM42 billion during the implementation of the movement control order (MCO) from March 18, 2020 until now, of which RM18 billion in losses is estimated to have been suffered by the industry during the MCO 3.0 period from June 1, 2021 to September 2021.
Speaking in the Dewan Rakyat on Thursday, Senior Works Minister Datuk Seri Fadillah Yusof said the remaining RM24 billion in losses is estimated to have suffered by the industry following the implementation of MCO 1.0 last year, which affected the implementation of construction work from March to July 2020.
“[Following] the effects of the Covid-19 pandemic and the implementation of the MCO, the construction sector recorded a decline in growth rate of 19.4% in 2020. Meanwhile, in the first quarter of 2021 (1Q21), the construction sector continued to decline at a rate of 10.4%. However, it recorded an increase with a rate of 40.3% in 2Q21,” he said.
Fadillah noted that the construction sector was among the affected industries as a result of the pandemic, with the ministry and agencies under it, such as the Public Works Department (JKR) and the Construction Industry Development Board (CIDB) as well as related implementation agencies, holding several engagement session with industry players to address the challenges arising as well as finding solutions to them.
According to Fadillah, among the challenges faced by the construction industry include the rising cost of building materials, an increase in wage cost for general workers as a result of of manpower shortage due to the need for construction workers to complete their vaccination, as well as foreign construction workers not being able to return to Malaysia after returning to their countries of origin earlier .
He said there is also the cost of the labour recalibration programme that had to be borne by contractors, as well as the imposition of strict conditions for obtaining approvals, besides an increase in costs for employers to provide accommodation for construction workers to meet the requirements of Act 446.
Other challenges, he added, include cost of compliance with the standard operating procedures (SOPs), which needs to be fully borne by contractors, and the need to create a universal period for the extension of time (EOT) into Act 829.
Among the proposed solutions to these challenges, Fadillah said, include conducting the Construction Industry Vaccination Programme (CIVac) initiative to assist workers in the construction sector in getting a vaccine injection which in turn would enable work on construction sites to continue.
“The Ministry of Works [also] takes note of the issue of rising cost of building materials and has submitted a proposal to re-establish the provision clause for allowance of price changes or variation of price (VOP) to the Ministry of Finance (MoF).
“[In addition], the government has agreed to relax the conditions of recalibration specifically for construction workers, [and] encourages the set-up of centralised labour quarters (CLQs) or employee accommodation areas by service providers,” he said.
Fadillah earlier was responding to queries from Jerantut Member of Parliament Datuk Ahmad Nazlan Idris who requested the minister to elaborate on the challenges and measures taken by the ministry to assist the construction sector having impacted by the Covid-19 pandemic.
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