Abang Johari: Sarawak govt to allow advance payment for construction companies affected by price hikes of building materials
KUCHING, Feb 8 — Sarawak Premier Tan Sri Abang Johari Openg today said that the state government will give advance payment for work contracts to help companies under a new initiative to safeguard the interest of the construction industry. He said the advance payment is to help them, including those categorised as RM2 companies, to strengthen their financial positions.
“The state government will allow up to three payments to be made without the contract documents in the first four months of the contract period,” he said at the opening of a seminar on enhancing Sarawak’s construction industry at the Borneo Convention Centre Kuching (BCCK) here.
He said the state government will also impose a lower rate of liquidated and ascertained damages and lower minimum payments as well as other measures to alleviate projects affected by the price hikes of building materials.
He added the state government will also allow an extension of time (EOT) for projects with the progress of at least 60 per cent based on the works programme, and there will be mutual termination subject to prevailing criteria imposed.
“We hope to mitigate the problems faced by the contractors,” he said.
The premier said the government in its effort to improve the construction industry’s competitive edge is also currently working towards the development of strategies for industry players to become global solution providers.
He said it is to provide the necessary leverage to support sustainable wealth and value creation due to the huge impact the industry has on the nation’s economy with approximately 1.5 million people being employed under the sector with an expected annual growth of 5 per cent in the next three years.
“These initiatives have been undertaken to further assist in the recovery of the local construction industry and the timely delivery of projects in Sarawak. “In addition, the relevant departments have also reviewed their current process and procedures to accommodate market needs and to ensure the success of project implementation,” he added.
Abang Johari said he has advised the State Financial Secretary (SFS), the Ministry of Infrastructure and Port Development (MIPD) and the state Public Works Department (JKR) to formulate further initiatives to support and enhance the project management and contract administration of projects.