PUTRAJAYA, June 29 — The government’s move to simplify procurement procedures under the National People’s Well-Being and Economic Recovery Package (PEMULIH) will help drive the construction sector affected by rising building material prices following the COVID-19 pandemic as well as help the B40 group in the sector.
Senior Works Minister Datuk Seri Fadillah Yusof said through PEMULIH, the government allowed variation of price (VOP) for work projects due to the significant increase in the cost of building materials from Jan 1 to Dec 31, 2021.
“By allowing VOP, it will help contractors due to the sharp increase in raw material prices currently. This is because the increase in raw materials also has an impact on their (contractors) financial problems.
“This move will also be able to smoothen the supply and demand process in construction works,” he said in a statement today on the PEMULIH package.
Fadillah said the RM150 billion PEMULIH announced by Prime Minister Tan Sri Muhyiddin Yassin yesterday was inclusive and comprehensive, as well as showed concern to all those affected by the COVID-19 pandemic.
Through PEMULIH, he said the government would be assisting local G1 to G4 contractors to carry out small-scale work projects via balloting and tenders.
The contractors (G1 to G4) can perform the work more effectively because they get to deal with prices that assure reasonable profits, he said, adding that this also provides an opportunity for more small contractors to participate in government procurement.
Through PEMULIH as well, he said it also allows time extensions or extension of contract (EOT) of work projects or an extension of contract periods for supply and service contracts, subject to clauses, affected by the implementation of movement control.
“The EOT will allow the contractor to reschedule work to ensure it is fully completed.
“On the other hand, if the project shuts down, the financial impact and completion time of the project that has to be borne by the government is higher as the time required to appoint a new contractor with a new price is also usually longer than the original contract,” he said.