SATURDAY-5TH JANUARY 2008-BUILDING MATERIALS:BODY CALLS FOR PRICE FLUCTUATION CLAUSE

Building materials: Body calls for price fluctuation clause

KOTA KINABALU: The recent rapid escalation of building material prices has imposed a heavy burden on the local builders and contractors in Sabah, said Sabah Builders Association (SBA). Its President Tsen Kui Lin expressed concern that many of the association members and other contractors who have been undertaking either Government- funded or private projects are suffering heavy financial losses. As such, he stressed the need for the Government to include a price fluctuation clause in the contract agreement for both the Government and private sector projects.
“This provision will allow breathing space for the contractors to successfully complete the projects. Otherwise, projects will fail when the contractors are unable to survive under the current hardship,” said Tsen in a statement yesterday. Further, in the midst of Government efforts to implement development programs under the current Ninth Malaysia Plan (9MP), he felt that if there is shortage of building materials and uncontrolled cast escalation, the progress and costs of project would be badly affected. This would unnecessarily increase the burden on the Government and the people as a whole, according to him. He said the Government could adopt proposals put forward by the association such as allowing open competition on building materials to break up the monopoly. “This will not only alleviate the shortage of building materials but also reduce the prices of building materials leading to lower project costs and reduction of Government expenditure,” he said. Tsen said when there are sufficient building materials in the market, the contractors would not only be able to complete projects on time but make a reasonable profit. This, according to him, would enable them to survive under a fair market price structure. In another development, Tsen urged the Government to promote open tenders for all Government- funded projects. “This open competition will not only lower the project costs but help reduce the Government expenditure,” he said. Tsen repeated his call to all contractors and builders in the construction sector to join the association as members for the benefit of the society.