The construction industry in Malaysia is facing unprecedented cost increases, with the price of construction goods surging by nearly 30% following a recent hike in diesel prices, says Datuk Azman Yusoff, president of the Bumiputera Contractors Association of Malaysia (PKBM).
Azman described this spike as the highest in the country’s history. Suppliers have begun setting new rates for construction materials, effective since June 10.
Azman noted that suppliers have threatened to halt deliveries if the new pricing proposals are not adhered to. This move has led to calls for immediate intervention from the Malaysian Construction Industry Development Board (CIDB) and the Ministry of Domestic Trade and Cost of Living (KPDN) to monitor and address potential exploitative practices by suppliers capitalising on the diesel price change.
He said the impact of this price surge is most acutely felt by contractors classified from G1 to G7. These classifications, determined by CIDB, are based on contractors’ financial capacity and project-handling abilities. Azman highlighted to Sinar Harian that the rising costs could lead to significant delays in project completion and substantial financial losses for contractors.
In response to these developments, Communications Minister Fahmi Fadzil cautioned businesses against unjustified price hikes. He assured that the authorities are closely monitoring the situation and will take swift action against companies found to be profiteering from the subsidy rationalisation drive. Fahmi also pointed out that the construction sector had never received diesel subsidies; thus, there is no legitimate reason for the sudden price increase.
This situation underscores the urgent need for regulatory oversight to prevent price gouging and ensure fair practices in the industry. The CIDB and KPDN’s role in monitoring and regulating these price changes will be crucial to maintaining stability in the construction sector and protecting the interests of contractors and consumers alike.
