MBAM: Construction sector yet to hit full capacity

  • Nation
  • Tuesday, 07 Jul 2020

Current problems: According to MBAM, the sector is still plagued by issues such as financial difficulties and a shortage of workers.

PETALING JAYA: The construction industry is still not operating at full capacity due to the impact of the Covid-19 pandemic and the implementation of the movement control order (MCO), says Master Builders Association Malaysia (MBAM).

Its president Foo Chek Lee said that the industry was still plagued by issues connected to the pandemic and MCO, including financial difficulties and a shortage of workers.

“We restarted operations in June, and it’s normal to take some time to receive payments from our clients.

“so many construction companies will only get their payments in September or October.

“So those affected will not receive any revenue from March until September or October, while still facing costs to run the companies such as overheads and salaries, ” Foo said yesterday.

He added MBAM hoped the government could convince banks to extend the loan moratorium as this would help tide the industry over while these firms wait for payments from clients.

“There is an urgency when it comes to finance, so an extended loan moratorium can tide us over during this time, as payments will only come in October, ” he said.

He said it was not only small and medium enterprises (SMEs) that were affected, but bigger construction companies as well.

“There are loans for items like machineries that companies still need to service, ” he said.

Foo suggested the government to look into giving soft loans to businesses, with lower interest rates to help them survive the impact of the pandemic.

“A bridging loan for a year or two should be enough to help pay workers’ salaries and companies’ overheads.

“This will help construction companies from retrenching workers or (in the worst case scenario) to avoid having to ‘bungkus’ (declare bankruptcy), ” he added.

Foo also urged the government to look into the needs of the various industries in the country when it comes to the freeze on hiring of foreign workers.

“There is still a shortage of workers, ” he said, but added that the industry was looking at hiring local workers.

“It’s a bit difficult as many locals are not interested in this sector, ” he said, adding that this was despite the fact that many construction firms offered higher pay to locals.

He was commenting on Construction Industry Development Board’s survey that suggested 23% of construction sites in the country were still not operating.

Foo said he believed the industry would only be back to pre-Covid-19 level of operation when the coronavirus was no longer a threat.

“At present, we have to comply with the standard operating procedure (SOP) such as social distancing.

“For example, if there are 10 people working at one time, we need to have shifts so that the workers are not too close to each other.

“I can’t say when things will go back to normal, but as long as there is no vaccine, we (the construction industry) will probably have to comply with the new SOP, ” he said.

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