Construction firms face another stumbling block


  • Construction
  • Wednesday, 06 May 2020

MBAM: It will take eight months to complete Covid-19 testing for all foreign workers



PETALING JAYA: The mandatory Covid-19 screenings for foreign workers is another stumbling block for construction companies who are already suffering from halted operations during the movement control order (MCO).

Apart from the additional costs incurred, employers are also battling against time to get workers tested for the coronavirus before the commencement of work.

According to Master Builders Association Malaysia (MBAM) secretary general Eric Yong, it will take about four months to test two million foreign workers in Malaysia, at the current testing capacity of 20,000 tests per day.

“It is going to be as late as end-May or June to get an appointment, bearing in mind there are still many sectors who have not gone full swing into Covid-19 screening.

“In a scenario of only 10,000 tests a day allocated for foreign workers (with the remaining 10,000 for the rest of the country), it will take eight months to complete testing for all foreign workers.

“This means that 2020 might be a redundant year for many companies, ” he told StarBiz.

At present, almost half a million of foreign workers are in the construction industry.

From this figure, an estimated 300,000 are in Kuala Lumpur and Selangor.

Yesterday, Senior Minister Datuk Seri Ismail Sabri Yaakob announced that the Social Security Organisation (Socso) will bear the cost for Covid-19 screening for foreign workers who contribute to the organisation.

An estimated 60% of foreign workers contribute to Socso.

Ismail said the testing would a start in Kuala Lumpur and Selangor, beginning with those in the construction sector.

As such, it is highly likely that employers will have to foot the Covid-19 test bill for the 40% of foreign workers who do not contribute to Socso.

This total cost will amount to RM320mil, assuming an average price of RM400 per test.

The market rate of a swab test is within the range of RM350 to RM650 each.

“This is definitely an additional cost to construction companies on top of all the other costs, as well as losses, since the start of the MCO.

“We are in very tough times, and it is untimely to impose further cost burdens to contractors.

“Most of the contractors make between 5% to 8% per annum, and now with almost 20% less revenue from no work for two months, contractors are already suffering, as we still need to pay salaries and overheads, ” said Yong, who is also the group managing director of Crest Builder Holdings Bhd.

According to Yong, it is unfair for contractors to bear the costs of Covid-19 screening on foreign workers as many of the workers are already in lockdown or quarantined in their central labour quarters for the past seven weeks.

“In fact, I feel that the government should fully cover the test costs, with re-testing costs to be borne by the worker or contractor.

“The government should arrange separate testing facilities, specifically for the foreign workers, as well as finance these costs.

“Contractors will adhere to standard operating procedures (SOPs) after the first round of tests.

“Should any of the workers get infected after that, employers shall then bear the cost of re-testing, ” he explained.

In Kerjaya Prospek Group Bhd’s case, 30% of an estimated 2,000 of the group’s foreign workers have undergone Covid-19 screening.

Its executive chairman Datuk Tee Eng Ho said all of the group’s foreign workers contribute to Socso.

Going forward, MBAM’s Yong expected the construction industry to be on a downtrend for the next few months, bottoming out towards the end of the year or early 2021, with a recovery coming much later.

“In 2019, the total number of private projects has exceeded slightly over government contracts.

“With this current situation looming on the industry, private sector projects are expected to reduce, especially with retail or commercial projects and office projects possibly going to zero, as tenancy prospects have reduced tremendously.

“Residential projects will also reduce a lot, as buying power is reduced and people will choose to stay put rather than buy new properties.

“As it is, we need to learn to live with the virus, hence the SOPs and social distancing practices, ” said Yong.

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Stumbling block , MBAM , foreign workers , Covid-19

   

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