Kuala lumpur: Contractors who claim a sudden increase in construction material prices need to submit evidence and actual cost information to the Department of Statistics Malaysia (DOSM) to enable the government to assess the application of the Variation of Price (VOP) clause. Deputy Works Minister Datuk Seri Dr Ahmad Maslan emphasized the need for accurate data during a recent event.
According to BERNAMA News Agency, Ahmad highlighted that DOSM data from August 10 showed most construction materials experienced small and stable price increases, with steel and cement prices rising by less than one per cent. However, he noted that certain materials, such as sand, have recorded increases of up to 19 per cent in some areas, necessitating contractors to provide field evidence to support these claims.
"If it is not accurate, the involved associations should provide feedback to DOSM with evidence that the statistics are not accurate and specify what is inaccurate," Ahmad stated. He reiterated the government's reliance on DOSM statistics to make informed decisions about VOP applications. "If DOSM says it hasn't increased by more than one per cent, that's what we want to state. If it doesn't increase by more than one per cent, how can we give the VOP?" he added.
Ahmad also mentioned that the government is open to considering VOP if strong evidence indicates a sudden spike in construction material prices impacting project costs. Contractor associations, including the Malay Contractors Association of Malaysia and others, are encouraged to submit relevant invoices and evidence to DOSM for consideration.
In April, the Malay Contractors Association of Malaysia called for government intervention, including reactivating the VOP for construction materials, to support contractors facing cost pressures due to global energy challenges. The association's president, Datuk Mohd Rosdi Ab. Aziz, cited past successful implementations of VOP during crises like the COVID-19 pandemic.
In other developments, Ahmad Maslan announced the completion of an additional project for the Kelantan Matriculation College, valued at RM147.96 million, which was completed without any cost increase, achieving zero major defects and zero Variation Orders (VO). The project boasts a four-star rating in the Safety and Health Assessment System in the Construction Industry and recorded zero accidents causing work time loss.
Facilities at the college include academic and administrative buildings, accommodations, a student centre, a cafeteria, a multipurpose hall, and sports facilities like an athletics track and a hockey field meeting international standards. Ahmad noted the efficiency improvements due to the Industrialized Building System and Building Information Modelling, which scored over 70 per cent. The defect liability period for the project is two years, with maintenance responsibilities transitioning to the Ministry of Education thereafter.