|Price Escalation of Building Materials|
Master Builders Association Malaysia (MBAM) is very concerned over price fluctuation of major building materials particularly price hike in steel bars which is substantial and constitute a heavy financial burden running into millions of Ringgit on construction companies and the nation. Contractors are finding it very difficult in tender bidding due to uncertainty in price for major building materials.
MBAM would like to remind the Government of past experience in the rampant hoarding by steel manufacturers and distributors coupled by unscrupulous manipulation by steel mills in their production schedule to create artificial shortage contributing to sharp increase in steel price resulting in black market price of steel exceeding the control price set by the Government which is still in place.
The skyrocketed steel price at this juncture will add to an increase in project cost in all sectors of the building industry, dampening the Government’s effort in prime pumping. MBAM urge the Government to strictly regulate and enforce a more transparent production schedule from all steel mills to be made available to the public so as to prevent manipulation of rolling schedules to create artificial shortages.
MBAM fears that more development and housing projects will be abandoned in the future by construction companies which are unable to absorb the extra financial burden as they have signed fixed price contracts without any fluctuation clause for building materials price increase. MBAM urge the Ministry of Domestic Trade and Consumer Affairs, Malaysia (MDTCA) to give ample notice and lead time to the industry prior to the propose removal of steel bars and cement from the price control list while at the same time, the Ministry of International Trade and Industry, Malaysia should also consider in lifting the import control (AP) so that local producers can be more competitive and the prices to be determined by market forces. MBAM would also like to highlight other price escalating of building materials such as cement, bricks, timber, GI sheet, diesel and bitumen.
MBAM urge MDTCA to closely monitor the price to ease unnecessary financial burden, which definitely will affect the output of our local construction in the future.
Ir. Lau Mun Cheong
7th March 2003
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