Contractors allowed to revise project costs


  • Nation
  • Wednesday, 26 Nov 2008

MALACCA: A total of 1,311 contractors involved in government projects have been allowed to make variations with regard to their project costs following the recent price hike in building materials.

Works Minister Datuk Mohd Zin Mohamed said his ministry had so far paid out RM44.2mil as part of the permitted variation of price (VOP) for 270 projects with calculations being made for the remaining 1,041 projects.

He also said that the ministry has expanded the VOP to a total of 15 construction materials from the current five.

“We have also allowed mechanical and electrical work for VOP if the work scope includes civil engineering and building construction,” he told reporters Wednesday after attending a briefing for contractors during his working visit here.

Besides Johor, he noted the ministry had also approved VOPs for its projects in Malacca and had since paid out RM7mil to contractors here.

Meanwhile, Mohd Zin said that a total of 406 projects totalling RM9.4bil would adopt the Industrial Building System (IBS) with 189 of the projects having been tendered out.

He said that a total of 121 projects under the IBS would be tendered out between 2009 and 2010.

He added that the Government would continue adopting IBS in a move to reduce dependency on foreign labour while improving the efficiency of the nation's construction industry.

“Our dependence on foreign labour is extremely high at present with some estimated 2.2 million being employed with only 315,000 of them registered,” he said, adding that the workers sent at estimated RM780mil per month or RM18bil per year back to their respective countries.

With the IBS blueprint in place, he said the country hopes to reduce foreign labour in the construction industry to 250,000 by 2015.

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