KUALA LUMPUR, Nov 10 — The Works Ministry (KKR) has sent three proposals to the Finance Ministry to ease problems facing contractors who are implementing government projects following the increase in the price of building materials.
Deputy Works Minister Datuk Arthur Joseph Kurup said the proposals included adding building materials to the list of Variation of Price (VOP) from six to 23 building materials.
“Another proposal is to expand the application of VOP for design work and building contracts for projects on September 1 and extend the VOP until the end of next year if it is approved,” he said during the question and answer session in the Dewan Rakyat today.
He said the proposals submitted by the ministry could be used to help reduce the burden of the contractors concerned and the projects could be completed for the convenience of the people.
He was responding to a question from Datuk Rozman Isli (Warisan-Labuan) on the government’s review on the cost of government projects following the sharp increase in the price of building materials and logistics as well as VOP.
Arthur said the government had re-implemented the VOP conditions for conventional work contracts as approved by the Finance Ministry which is effective for contracts from January 1, 2021 to December 31, 2021.
He said the the contracts covered building works, civil engineering and mechanical and electrical (M&E) for quotation works as well as contracts worth RM500,000 and above.
According to him, based on a study on the Department of Statistics’ data for January to August this year, which is projected until December 2021, it was found that there was an increase in the cost index at a rate of between three per cent to 19 per cent nationwide as a result of the Covid-19 pandemic and rising global market prices.
On the application to expand the VOP for design and construction work contracts, he said the ministry was still waiting for the Finance Ministry’s response. — Bernama