Construction players face impasse over steel delivery
Posted on | May 4, 2007
By THE EDGE
Construction projects in the country could be delayed, stalled or abandoned if the impasse in the delivery of steel continues, industry bodies alleged on May 3.
The industry bodies are the Real Estate and Housing Developers’ Association, Master Builders Association Malaysia, Malay Contractors Association Malaysia, Indian Contractors Association Malaysia and the Associated Chinese Chamber of Commerce and Industry of Malaysia.
In a joint statement, the associations said contractors and builders were facing difficulties in obtaining steel bars, as steel millers continued to withhold steel supply until high “delivery charges” were paid.
They said steel millers had charged premiums ranging between RM150 and RM200 per tonne above the ceiling price for timely delivery.
“Contractors also reported that orders larger than 10 to 20 tonnes are not being served.
“Contractors represented by the associations are now facing a serious cash flow situation, as the effective price of steel has risen drastically above the agreed price in job contracts,” they said.
The associations added that the situation would affect construction contracts under the Ninth Malaysia Plan and jeopardise the government’s efforts in injecting growth into the construction industry.
They urged the government to step in to resolve the matter immediately, saying that a deregulation of the steel product market would be the best solution.
They added that all contractors and builders were advised to report to the associations high premiums charged by steel millers.
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