Johor Bumi contractors hit hard by rising costs

JOHOR BARU, June 28 ─ The sudden and substantial rise in prices of building materials, especially steel, recently has resulted in 4,000 Bumiputera contractors in the state facing the possibility of shutting down their business in the near future.

Johor Malay Contractors Association chairman Mahmood Amir said contractors in Johor as well as the other states needed help from the government to face this situation, which he described as critical.

“We ask the government to do something quickly in the next three to four months to counter the sudden and high rise in prices of building materials.

“If there is no solution in the near future, we fear that we have to close shop and companies will remain in name only,” he said in an interview yesterday.

According to Mahmood, the rise in the prices of steel and other building materials like cement and concrete was due to the rise in fuel and the recent lifting of the ban on steel exports.

He gave an example of a ton of steel measuring 6mm to 10mm that had gone up by 55.67 per cent to RM3,859 recently from RM2,479 before the ban was lifted.

“That price went up to RM4,000 per tonne last week or a rise of RM100 within a week. How can contractors survive in this situation?,” he said.

He said the prices of various other types of steel had also gone up by between 46-76 per cent.

According to him, prices of other materials like sand for making concrete also went up by between 30 and 35 per cent for a lorry-load, stones (29-39 per cent), cement (8-22 per cent), roofing material (23 per cent) as well as wooden and metal doors (34 per cent).

Mahmood said due to the price escalation, the actual cost of a government project that they undertook also went up by between 30 and 40 per cent from the contract price.

He called on the government to come up with a mechanism to deal with the problem of the high prices that have to be borne by contractors.

“We are not asking the government to help us make profits but to find a mechanism to reduce the debts we have to face now,” he said.

He proposed that a government-linked company (GLC) headed the import of steel for local use.

“The import of steel is important as local steel companies are more interested in exporting their products due to the profit factor rather than meet local demand,” he said.

The involvement of a GLC, he said, would mean faster import of steel compared to the contractors doing it themselves. ─ Bernama


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