Sarawak initiates VOP to help contractors face price hikes

 

The Sarawak government has initiated a second Variation of Price (VOP 2.0) involving 25 additional construction materials as an effort to ease the margin erosion faced by contractors of state-funded projects.

Premier Abang Johari Tun Openg announced today that the VOP 2.0 was one of the five measures taken by the state government under its ninth Bantuan Khas Sarawakku Sayang (BKSS 9.0).

“The Sarawak government is estimated to bear the cost of approximately of RM700 million for allowing the variation of price,” he told a press conference on the BKSS 9.0 here.

The state government allowed the first VOP in its seventh assistance package (BKSS 7.0) on Aug 6 last year, which cost about RM400 million for contractors of government works who faced a severe surge in prices of certain construction materials due to the global impact of Covid-19 pandemic.

“The VOP 2.0 will cover the ongoing contracts with letters of acceptance (LOA) issued between Jan 1, 2021, and Dec 31, 2021. There are 15 additional materials for building works and 10 additional materials for civil engineering works,” he said.

Abang Johari said among the materials for building works were concrete, glass, sand, paint and roofing materials, while diesel, cable stay, bitumen and steel were for civil engineering works.

He said the BKSS 9.0 also involved a 25 percent discount for annual assessment rate above RM400 and 30 percent discount for annual assessment rate below RM400 from July to December this year.

Discounts of between 10 and 25 percent for water supply bills, five and 25 percent for electricity bills and 50 percent rental discount for stalls operated under the local authorities would continue under BKSS 9.0.

He said all measures taken under this latest assistance package would cost the state government nearly RM1 billion and were meant to ease the burden of people in Sarawak, particularly those in the low-income bracket.

As of June this year, he added that Sarawak's inflation rate had risen 3.2 percent compared to last year.

- Bernama