By Karen Bong
KUCHING, July 18: A 240 per cent increase in diesel prices and rising construction material costs, compounded by the impacts of Covid-19, have led to 110 sick projects in Sarawak during the post-pandemic period.
Deputy Minister of Infrastructure Development Datuk Ir Aidel Lariwoo pointed out that most of these sick projects were initiated under the 11th Malaysia Plan (11MP), with many contractors unable to continue their work.
Fortunately, he highlighted that the Public Works Department (JKR) Sarawak has managed to reduce the number of sick projects from over 100 to fewer than 10 today.
“Many factors contributed to sick projects in Sarawak, especially those that commenced before pandemic and faced increased costs for construction materials like steel and diesel post-pandemic.
“The construction sector relies heavily on diesel from heavy machinery to logistics. The 240 per cent increase in diesel prices over the years significantly affected the performance of contractors in project delivery,” he told a press conference after attending a briefing on the updates of several projects in Kuching Division at the Public Works Department (JKR) Sarawak Kuching Division Office in Jalan Batu Lintang here today.
At one time, Aidel revealed that the increase in construction costs compared to schedule of rate (SOR) under existing contracts, which were lower, caused contractors to halt their work.
“For example, the cost of sand was RM38 per kilogramme during the contract agreement but increased to RM42 per kg thereafter, creating a variance of RM4. Consequently, contractors who faced constraints and could not continue with their projects were terminated.
“New contractors were appointed with their contracts adopting new SOR, which take into account the increased material prices,” he said.
Aidel emphasised that the Sarawak government had taken measures to subsidise projects through Bantuan Khas Sarawakku Sayang (BKSS) by implementing variations of price (VOP) to assist contractors in continuing their projects.
“The government acknowledges that all project prices, especially those under 11MP, have increased compared to 2016 or 2019 due to the rise in materials costs.
“Today, JKR Sarawak has revised the SOR for new contracts to match market prices. Otherwise, these projects will not be completed,” he added.
Tupong assemblyman Fazzrudin Abdul Rahman was present at the briefing. — DayakDaily
