Penang construction jobs seen hitting RM6bil

GEORGE TOWN: The value of jobs for the construction industry in Penang this year is expected to hit RM6bil in view of several big contracts that will be given out this year.

In 2014, according to the latest Construction Industry Development Board (CIDB) report, the value of contracts dished out to contractors in Penang was RM4.8bil, which fell short of the RM6bil target. This was due to banks tightening lending rules, particularly the bridging and end-financing loans for developers and buyers and changes in the state housing guidelines.

Penang Master Builders and Building Materials Dealers Association president Datuk Lim Kai Seng (pic) told StarBiz that some Penang and Kuala Lumpur-based developers were getting ready to launch over RM5bil worth of projects in the state this year. The developers are IJM Land Bhd (gross development value (GDV): RM486mil), Eco World Development Group Bhd (GDV: RM600mil), Mah Sing Group Bhd (GDV: RM1.005bil), Sunway Bhd (GDV: RM150mil), Ivory Properties Group Bhd (GDV: RM1.156bil) and Ideal Property Group (GDV: RM1.8bil).

“The construction cost for the projects will come up to about 40%, or about RM2bil of the RM5bil GDV.

“The renovation will cost about 30% - or RM600mil - of the RM2bil spending for construction works.

“We can expect spending of more than RM800mil for construction and renovation works annually for the next three years from these projects alone,” he said.

Lim added that at least eight new hotel projects with an GDV of about RM1bil GDV were in the works. Spending on hotel construction is expected to be about 80% of the RM1bil GDV, or RM800mil, over the next three years.

“This means that there will be more than RM200mil spending for construction of new hotels this year,” Lim said.

Some of the new hotels being planned include the RM350mil Angsana Teluk Bahang, the RM300mil Courtyard by Marriott in Macalister Road, the RM25mil Victoria Street Hotel, the RM33.8mil OZO Hotel in Argyll Road, and an unnamed RM80mil hotel project in Magazine Road. They are expected to be ready within three to four years.

Reclamation works for the second phase of the Seri Tanjung Pinang (STP) development project, which is expected to start in the second half of the year, will add more jobs for the local construction industry, according to Lim.

Lim said about 60% of the construction jobs related to the reclamation works for STP 2 could be tendered out to Penang-based contractors.

For 2014, the CIDB report showed that 445 contracts were given out in Penang. Of these, 62 were government jobs, and the remaining 383 from the private sector.

“There were less spending from the government and private sectors due to changes in the state housing guidelines, new development charges and tighter conditions for bank loans.

“These prompted developers to hold back their projects,” Lim said.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Business , penang stories


Next In Business News

Alibaba’s Lazada hires Ant Group veteran to head up payments
ACCCIM welcomes govt approval to bring in 32,000 foreign workers for plantation sector
Gadang bags Central Spine road subcontract worth RM100mil
Digital drive propels Eco World sales growth in Q3�
KLCI in the red as key heavyweights weigh
Oil fall as US storm-hit supply makes slow return
UOB Kay Hian upbeat on gaming as NFOs restart operations
With creditor talks progress, AirAsia X eyes end-Oct meets
China seen holding benchmark rate in Sept, some expect more liquidity support
Asian shares steady, but set for weekly losses as global growth fears nag

Stories You'll Enjoy