Posted on 30 Jul 2008
It looks like the Government may impose some kind of
restrictions to help the construction industry overcome the rising prices of
these and other raw materials.
Housing and Local Government Minister Datuk Seri Ong Ka
Chuan said he had received lots of requests from developers and contractors
that there should be restrictions to control the outflow of essential items.
Ong said his ministry was talking with the Finance Ministry
on the matter and was mindful of the fact that priority should be given to meet
local demand.
However, for the moment, he felt it would be better to allow
the free market system to determine the supply and demand of steel bars and cement,
while the Government closely monitors escalating prices and their supplies.
a€?But if the situation persists, I think the Government has
to intervene. We have to make it our priority to the local industries rather
than overseas market even if it (the raw material) fetches a better price,a€? he
said.
Ong said this at a press conference after witnessing the
signing of a mutual co-operation agreement between I-Bhd and Kompakar Group for
the development of a Tier 4 Ready Data Centre in the RM2bil i-City integrated
commercial-cum-residential development in Shah Alam.
Meanwhile, the Master Builders Association Malaysia (MBAM)
has warned that many medium and small contractors from Class D, E and F may be
forced to stop, delay or even abandon projects as a result of the steep price
hike of essential building materials.
a€?The Government should act quickly. If the situation
continues to worsen, it should step in and ban export of steel bars and
clinkers to ensure building materials manufacturers would supply the needs of
the local construction industry first,a€? said MBAM president Ng Kee Leen.
He said the 10% import tax for cement should be waived as
well because contractors and developers were facing great pricing pressure and
any form of import tax relief would be appreciated.
Although cement liberalisation was announced on June 5, Ng
said the import of cement was still not in place due to logistics.
With liberalisation, cement price had continued to rise from
RM10.90 during the government price control period to RM13.20 (22% up)
immediately after liberalisation and now another increase by RM1, or 30%, per
50kg bag to RM14.25.
In the case of steel bars, he said, although it was
liberalised on May 12, the liberalisation process was not well implemented.
a€?It was difficult to import steel bars and there are still
cases of Customs Department officers demanding for approved permits and/or
impose import duty on certain steel bars.
a€?MBAM hopes the Government would simplify (matters) by
making clear the process to import steel bars for local construction use,a€? he
added.
MBAM also requested cement and steel bar manufacturers to
provide at least six months' lead time for any announcement on price increase
to enable contractors to allocate provisions to mitigate their cost.
Ng said the Lafarge Malayan Cement Bhd's announcement on
price increase for cement effective Aug 1 would hurt the construction industry.
Meanwhile, ready-mixed concrete operators in Selangor and
