Master Builders Association Malaysia (MBAM) strongly supports the statement in the local media by Minister of Domestic Trade and Consumer Affairs  YB Datuk Shahrir Samad regarding the possibility of removing the price control mechanism as the system is no longer effective. MBAM members definitely are unable to obtain steel bars and cement at Government Control Price (GCP). 

Ir. Yap Yoke Keong, Secretary-General of MBAM said, “MBAM supports YB Datuk Shahrir Samad’s statement regarding the price control mechanism which was deemed unrealistic and the possible scrapping of price control. MBAM is thankful that MDTCA has openly acknowledged the problem. Now, more importantly immediate action needs to be taken to resolve the long-standing issue.  Despite the three (3) times increase in prices of steel bars and billets from April 2007 to Jan 2008   as approved by the Government, the construction industry has not seen a stop to black market prices of steel bars. Besides that, steel mills are not providing the whole range of steel bar sizes and contractors have complain of not receiving consistent and full supply of steel bars ordered. Furthermore, following the announcement by the Ministry of Domestic Trade and Consumer Affairs (MDTCA) regarding price adjustment of steel bars backdated to 1^st December 2007, the various types of steel bar are now said to be priced between RM 2,225.00 and RM 2,419.00 per tonne from between RM 1,837.00 and RM 2,010.00. However, currently local steel millers are requesting additional RM800.00 – RM1,000.00 per tonne “under-table” payment. Effectively this is an increase of more than 60% or nearly RM1, 100.00 per tonne in the period of six months! The construction industry   is also facing increase in purchase price for cement as well as acute shortage of cement. For example, on average the actual transaction price for cement is roughly RM 2.00 – RM 3.00 more than the RM10.95 ceiling price for central region.  The situation is compounded because it is difficult to obtain supply even if contractors were to pay cash. The bleak situation will cause unnecessary delay of construction works.” 

MBAM strongly urge MDTCA to scrap the price control for steel bars and cement. The Association also calls for the removal of the tariff for importing steel bars. In fact, MBAM members and building material distributors are ready to explore the possibility of importing directly in order to ensure construction is carried out in a timely manner and supply is consistent.  

The Association again calls for the open market system where prices are determined by market forces. YB Datuk Shahrir Samad has aptly acknowledged the impact of ASEAN Free Trade Area (AFTA) where if the Goverment allows products to enter the ASEAN region, the nation may have a better price mechanism and supply may be better.    

Released by:

Ir. Yap Yoke Keong

Secretary-General

Master Builders Association Malaysia (MBAM)

25^th March 2008