PUTRAJAYA, April 15 — The Construction Industry Development Board (CIDB) is collaborating with the Malaysian Statistics Department (DOSM) to assess the actual impact of rising building material costs following the West Asia conflict on the local construction sector, said Deputy Works Minister Datuk Seri Ahmad Maslan.
The collaboration enables the Works Ministry to obtain more accurate percentage increases through scientifically based inflation calculation methods.
“DOSM has figures and calculation methods that are carried out periodically. It uses a reliable approach, not merely estimates,” he told the media after visiting the Setia Perdana Activity Centre project site at the Prime Minister’s Department today.
Ahmad added that the assessment must be conducted in detail by examining the actual components of a construction project.
“For example, in a building project involving about 50 items, we need to identify how many items are truly affected and to what extent the impact is,” he said.
The impact of cost increases varies by project type, with road construction and maintenance reported to be more affected than building projects.
Rising diesel prices have placed significant pressure on operational costs for road contractors, as heavy machinery such as lorries, bulldozers and rollers rely on fuel.
“Conversely, for building construction projects, the impact of diesel price increases is more limited as fuel usage is not as high,” Ahmad said.
Cost increases in the construction sector are not entirely due to the current conflict; they are also influenced by existing supply chain factors that have already affected prices.
In a related development, he said only four per cent of the 855 projects under the supervision of the Public Works Department (JKR) nationwide are currently classified as sick projects, typically due to contractor delays.
“When we study the causes of sick projects, many are linked to weaknesses in project management as well as financial management,” Ahmad said.
During the visit, the minister also inspected the progress of the Setia Perdana Activity Centre, which was supposed to be completed in 2024 but has experienced significant delays after being granted six extensions of time.
He said the contractor was found to have failed to comply with several basic requirements, including failing to attend site meetings, a lack of skilled workers, and poor work planning.
As such, the ministry will review the next steps, including the possibility of contract termination, to ensure the project can be completed without affecting public interest.
Ahmad emphasised that they do not encourage repeated time extensions, as this reflects implementation issues and could increase project costs.
“Each extension of time carries cost implications. If the contract is terminated, the government would need to appoint a completion contractor through a new tender, which would also involve additional costs and a time frame of two to three months,” he said.
