Construction industry suffered RM18.5bil losses in first three MCO phases


KUALA LUMPUR: The construction industry suffered RM18.5bil in losses during the first three phases of the movement control order (MCO) from March 18 to April 28, says Datuk Seri Fadillah Yusof.

The Works Minister said RM6.9bil in losses were recorded between April 15 and April 28, the third phase of the MCO which saw the reopening of 13 sub-sectors.

This was a decrease in losses from the RM11.6bil losses recorded during the first and second phase of the MCO.

"The most severe impact was caused by financial issues, project deliveries and workforce limitations," he said in a speech to industry players on Tuesday (Sep 22).

Fadillah added that inspections on 7,590 construction sites nationwide by the Construction Industry Development Board (CIDB) from April 20-Sept 20 found that 1.96% of them had not resumed operation.

He said 149 sites were still temporarily closed, with 45 of them facing financial issues, among other reasons.

According to Fadillah, little leeway or special considerations were given by banks to developers affected by the Covid-19 pandemic.

He also said that 89,708 or 88.7% of all construction companies registered with CIDB were class G1 to G5, or categorised as small and medium enterprises (SME).

Many had a high dependence on foreign labour with 438,264 workers, and there was low adoption of technology.

"There has also been a failure to obtain funding from financial institutions for projects affected by Covid-19," he said.

Fadillah, together with Minister in the Prime Minister's Department (Economic Affairs) Datuk Seri Mustapa Mohamed, had an engagement session with industry players from the construction sector.

The purpose of the session was to get feedback on the impact of the Covid-19 pandemic on the construction sector.

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MCO , Construction industry , Losses , Banks , Covid-19

   

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