KUALA LUMPUR, Dec 13 — The Real Estate and Housing Developers’ Association Malaysia (Rehda) and six other industry players have urged the government for continuous monitoring and enforcement to weed out profiteering and anti-competition activities in the building materials supply chain.

In a joint statement today, industry players said prices of building materials have been on a steep rising trend in recent months, and this has directly impacted the cost of doing business, resulting in a hike on construction cost of between 13 and 20 per cent.

Steel has risen by about 40 per cent and sand, up by 20 per cent since October 2020. This has put pressure on companies’ already-dwindling profit margins.

The statement was issued by Rehda, Master Builders Association Malaysia, the Malaysian Malay Contractors Association (PKMM), Malaysian Bumiputera Contractors Association, Guild of Bumiputera Contractors Wibawa, United Malaysia Contractors Association, and Malaysian Indian Contractors Association.

They also proposed to the government to speed up the entry of foreign workers to ease the current shortage.

“Based on observations, among the major factors affecting the price increase are due to a surge in cost of raw materials, acute shortage of foreign workers, increase in logistics cost, upward trend in prices of crude oil, and rise of energy costs,” they said.

The industry players is seeking the government to give the matter urgent attention as the prevailing situation would affect the property and construction sector adversely and impact Malaysia’s economic growth.

They also proposed that the government extend the Variation of Price (VOP) clause, which involves government projects, by at least another 12 months as they expect prices to remain volatile beyond December 31, 2021.

“For private projects, the government should encourage project owners to introduce VOP in their contracts,” they said.

Industry players said this could lead to loss-making projects and a cash flow crunch if left unattended.

“Developers may have no choice but to pass the extra cost to house buyers while contractors who are unable to absorb the extra cost may have to halt work,” they added. — Bernama