Provide evidence of price hikes, contractors told

 Deputy works minister Ahmad Maslan says this will allow the government to assess whether contractual variation of price clauses should be applied.

Deputy works minister Ahmad Maslan said data from the statistics department as of Aug 10 showed that most construction materials recorded small and stable price increases. (Bernama pic)

PETALING JAYA:

Contractors must submit evidence of sudden increases in construction material prices to the statistics department to allow the government to assess whether contractual variation of price (VOP) clauses should be applied, says deputy works minister Ahmad Maslan.

Ahmad said the department’s data as of Aug 10 showed that most construction materials recorded small and stable price increases, including steel and cement, which rose by less than 1%.

He said the prices of certain materials, such as sand, had increased by up to 19% in some places, but such data must to be supported by actual cost information from contractors.

“If it is not accurate, the associations involved should provide feedback to the statistics department, accompanied by evidence.

“We have to use the statistics provided by the department. If it says prices haven’t increased by more than 1%, that’s what we will state. How else can we apply price variations?” Bernama quoted him as saying in Kelantan today.

A VOP clause is a contractual mechanism that allows contract sums to be adjusted upward or downward due to market fluctuations in the cost of labour, materials or fuel.

Earlier today, two construction groups told works minister Alexander Nanta Linggi that rising costs are hitting the sector harder than broad economic data suggests.

The Master Builders Association Malaysia and the Bumiputera Contractors Association said national-level statistics did not fully reflect cost pressures, particularly in view of sharp increases in the prices of essential materials.

They were responding to a recent statement by Nanta that the increase in construction material costs remained manageable amid the global energy crisis, with contractors still able to absorb higher expenses and continue projects without delays. - FMT