KUALA LUMPUR – The government has always taken steps to assist contractors to complete their projects, including allowing them to apply for the implementation of the Variation of Prices (VoP) clause to ensure the survival of contractors affected by rising prices of building materials.
Deputy Works Minister Datuk Arthur Joseph Kurup said the government understands the matter and any move to terminate the contract of contractors involved in delayed projects or “ailing” projects would be the last step taken by the government.
“The government really understands that among the main factors for project delays was the rising building material prices. Besides the allowance of extension of time, the VoP will ensure termination will be the last resort,” he said in the Dewan Rakyat today.
He said this in reply to a supplementary question by Datuk Hasanuddin Mohd Yunus (Hulu Langat-PH) on measures taken by the Works Ministry in helping contractors facing having their services terminated due to delays in the projects carried out by them.
In his reply to the original question by Ahmad Johnie Zawawi (Igan-GPS), Kurup said that as of June 30, a total of 84 projects had been categorised as being delayed projects compared to the 696 government contracts under construction by the Works Ministry, or equivalent to 12%.
He said that apart from rising prices of building materials, other unforeseen factors also contributed to the delays in completing the projects, such as disruption to the supply chain of building materials, manpower shortage due to the implementation of the movement control order since March 2020 and floods in 2021 that also affected private projects.
The government had previously agreed to implement the VoP to ensure government projects were not affected and could be completed according to schedule.
“The conditions and method of calculating the VoP in this work contract are from January 1, 2021 until June 30, 2022. The list of building materials included in this circular is reinforced steel, crusher run, mild steel pipe (water and sewer pipes) and copper.
“To further ease the burden of construction industry players, the prime minister had, on July 14, added 11 more building materials in the implementation of the VoP, bringing the total to 15 approved building materials,” he said. – Bernama, July 18, 2022
