Future of construction industry good
10MP will generate domestic growth
PETALING JAYA: The 10th Malaysia Plan (10MP) is expected to boost the construction industry and generate domestic growth.
HwangDBS Vickers Research in a recent note stated that the 10MP (2011-2015), which was tabled in June, had at least set the foundation for the rollout of key projects.
“There is emphasis on upgrading the country’s transportation system with projects including seven highways, LTR extensions, MRT and southern double-tracking worth a total RM71bil,” it said, adding that 52 public-private projects worth RM62.7bil were also identified.
The research house said the construction sector would have more room to grow once the RM36bil MRT project was approved and had taken off.
“The probability of it being approved was high as the recent subsidy cuts suggest political will. A key turning point could be the outcome of two consultants’ studies in mid-September,” the report said.
The MRT project is the brainchild of MMC-Gamuda. It was presented to the Government in January.
The MMC-Gamuda joint venture aims to begin work early next year once it receives the go-ahead. It said the project would be carried out in two phases over eight to 10 years. The first phase would involve up to RM23bil worth of construction, including tunnelling works, from 2011 to 2016, while the second phase – from 2014 to 2019 – would be worth RM13bil, it added.
The Government has allocated RM230bil for the 10MP, the same amount as the 9MP. From the amount, 60% will be used for physical development and the rest for non-physical development.
Meanwhile, Master Builders Association Malaysia (MBAM) hopes the Government will implement the 10MP projects without delay.
“This is to ensure contractors will have enough jobs,” said president Kwan Foh Kwai.
Kwan earlier said the local construction sector had grown by 8.5% in the first three months of this year. It moderated to 4.1% between April and June.
“This is a cause for concern as the total value of new construction projects awarded has been declining in the last four quarters. With the transition period from 9MP to 10MP, which will only be launched in October, we expect these new projects to only start contributing to the economy a year later,” he said, adding that with less projects for contractors, competition would be greater. This will add pressure to the smaller contractors to sustain their business.
“MBAM reiterates our call for the Government to speedily award the remaining stimulus package projects and implement the 10MP projects so that there are more jobs in the market. This will provide a continuous and sustainable growth of the industry,” he said.
Kwan said MBAM was also hoping that the Government would review and scrutinise future policies and procedures in the 10MP to ensure that they would minimise unpredictability and ensure a sustainable economy though transparent policies and expeditious implementations.
Recently, the Construction Industry Development Board had said about RM70bil of projects were expected to be implemented under the 10MP but senior general manager and CEO Abdul Latif Hitam said the projects’ implementation was expected to take time due to the procurement process.
By EDY SARIF
edy@thestar.com.my
PETALING JAYA: The 10th Malaysia Plan (10MP) is expected to boost the construction industry and generate domestic growth.
HwangDBS Vickers Research in a recent note stated that the 10MP (2011-2015), which was tabled in June, had at least set the foundation for the rollout of key projects.
“There is emphasis on upgrading the country’s transportation system with projects including seven highways, LTR extensions, MRT and southern double-tracking worth a total RM71bil,” it said, adding that 52 public-private projects worth RM62.7bil were also identified.
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Kwan Foh Kwai calls for speedy implementation of projects |
“The probability of it being approved was high as the recent subsidy cuts suggest political will. A key turning point could be the outcome of two consultants’ studies in mid-September,” the report said.
The MRT project is the brainchild of MMC-Gamuda. It was presented to the Government in January.
The MMC-Gamuda joint venture aims to begin work early next year once it receives the go-ahead. It said the project would be carried out in two phases over eight to 10 years. The first phase would involve up to RM23bil worth of construction, including tunnelling works, from 2011 to 2016, while the second phase – from 2014 to 2019 – would be worth RM13bil, it added.
The Government has allocated RM230bil for the 10MP, the same amount as the 9MP. From the amount, 60% will be used for physical development and the rest for non-physical development.
Meanwhile, Master Builders Association Malaysia (MBAM) hopes the Government will implement the 10MP projects without delay.
“This is to ensure contractors will have enough jobs,” said president Kwan Foh Kwai.
Kwan earlier said the local construction sector had grown by 8.5% in the first three months of this year. It moderated to 4.1% between April and June.
“This is a cause for concern as the total value of new construction projects awarded has been declining in the last four quarters. With the transition period from 9MP to 10MP, which will only be launched in October, we expect these new projects to only start contributing to the economy a year later,” he said, adding that with less projects for contractors, competition would be greater. This will add pressure to the smaller contractors to sustain their business.
“MBAM reiterates our call for the Government to speedily award the remaining stimulus package projects and implement the 10MP projects so that there are more jobs in the market. This will provide a continuous and sustainable growth of the industry,” he said.
Kwan said MBAM was also hoping that the Government would review and scrutinise future policies and procedures in the 10MP to ensure that they would minimise unpredictability and ensure a sustainable economy though transparent policies and expeditious implementations.
Recently, the Construction Industry Development Board had said about RM70bil of projects were expected to be implemented under the 10MP but senior general manager and CEO Abdul Latif Hitam said the projects’ implementation was expected to take time due to the procurement process.
By EDY SARIF
edy@thestar.com.my
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