Glut of contractors tussle over RM99bil pie

 

A contractors association has called for action to deal with the glut of contractors by putting a limit on new licences being issued. (Bernama pic)

PETALING JAYA: The works ministry is taking up a plea by the Malay contractors’ association for action to deal with a glut of contractors in the G1 to G7 class.

Deputy works minister Abdul Rahman Mohamad said there was stiff competition for projects as the government had allocated RM99 billion for the construction sector this year, Bernama reported.

He said too many licences had been issued.

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“It is estimated that there are more than 160,000 contractors in the G1 to G7 categories at the moment, of whom 46,000 are in the G1 class.

G1 contractors are eligible to bid for projects costing up to RM200,000 with the G2 tender limit set at RM500,000. The ceilings for the other classes are RM1 million (G3); RM3 million (G4); RM5 million (G5) and RM10 million (G6).

There is no tender limit for the highest grade, G7.

Abdul Rahman Mohamad.

Rahman said: “We are concerned that there are contractors who have not been awarded projects for a long time, especially those in the G7 class, who have the costs of a lot of staff, machines and other expenses.”

Rahman said the Malaysian Malay Contractors Association (PKMM) had proposed setting a limit on new contractor licences.

The association had also called for a weeding-out exercise for problematic contractors to be identified. “I think their views are good and we will try to take the proposals to be considered by the finance ministry besides several other related matters,” he was quoted as saying. - FMT