KUCHING, Oct 28: The cost index for building materials increased between three to 19 per cent nationwide due to the impact of Covid-19 and rising global market prices, according to data from the Department of Statistics Malaysia from January 2021 to August 2021 which is projected until December 2021.
Senior Works Minister Dato Sri Fadillah Yusof said that among the affected materials directly related to the construction industry are reinforced iron and crushed aggregates (crusher run).
The ministry also noted that the increase in the price of building materials such as sand and reinforced iron was quite significant based on locality and this also affected the Consumer Price Index (CPI) in certain groups or subgroups as well as affected the smooth implementation of government projects.
To address the rising cost of building materials and ensure the continuation of government projects, he pointed out that several initiatives have been taken including enforcing the variation of price (VOP) facility on July 15 this year, which order is effective for all conventional government contract works starting Jan 1, 2021 until Dec 31, 2021.
“It covers building construction, civil engineering works as well as mechanical and electrical works with contracts worth RM500,000 and above,” he told the Dewan Rakyat in Kuala Lumpur today.
The minister was replying to Penampang MP Datuk Ignatius Dorell Leiking who asked the government on measures taken to control the price of building materials which have increased drastically and the impact the rising costs have had on approved government projects.
In addition, he told the House that the ministry through the Public Works Department (JKR) has submitted an application to expand the VOP facility for design and construction work contracts for projects on Sept 1 and is still awaiting consideration from the Ministry of Finance (MOF).
Apart from that, the ministry also monitors the monthly pricing of building materials which is published in the National Construction Cost Centre (N3C) at https://n3c.cidb.gov.my/ to help contractors to compare prices.
“The prices of building materials are compiled in collaboration with several organisations related to construction and obtained from contractors.
“A study on the price rate schedule specifically for the implementation of projects by sub-contractors under G1 and G2 category has also been carried out.
“The MOF through a letter dated July 12, 2021 has approved the use of the Civil Engineering and Building Work Rate Schedule 2021 which is effective from July 1 until Dec 31, 2022,” he added. — DayakDaily
