KUALA LUMPUR: MASSIVE investments in infrastructure may have provided ample opportunities for local contractors, but they now face a shortage of skilled technicians and professionals to carry them out.
“We’re seriously lacking top quality engineers, architects, surveyors, (and) project managers, including project planners. Also, we don’t have enough experienced skilled workers and supervisors at the worksite,” said Master Builders Association Malaysia (MBAM) president Foo Chek Lee.
He said construction companies in Malaysia were competing for a limited supply of talent.
“It is estimated that 30 per cent of local construction personnel are reaching the retirement age. There is a critical need to replenish supply,” Foo told Business Times in an interview recently.
Although there is a need to limit the number of foreign workers in Malaysia, the government should give more focus on expanding the pool of skilled workers.
In addition to increasing levy on foreign workers, it should also further incentivise companies training talent and upgrading the skills of Malaysian youths.
Part of the solution would be to promote vocational schools to churn out more skillful trade workers, technicians and operators in operating heavy machinery.
Their training syllabus must also meet the industry needs, said Foo.
“The government and the private sector must work closely together to ensure developments such as the mass rapid transit (MRT), light rail transit (LRT) and other mega projects are implemented in a timely manner, as any delay will incur more costs,” he said.
Relatively, Foo said the construction industry would continue to encourage prefabrication via the industrialised building system (IBS) and a higher rate of mechanisation.
IBS involves the manufacture of building components that are later transported to construction sites for assembly.
These are for components such as precast concrete framing, panel and box systems; metal formwork systems and metal framing systems.
Moving the production process to a factory makes for a cleaner and safer construction site.
While the IBS involves an initial high capital investment in mass production, the pay-offs lead to durable and watertight features, and uniformity in quality and speed.
All of these contribute to contractors’ track record and reputation.
MBAM lauds the government for incentivising companies for adopting IBS through Investment Tax Allowance under Promotion of Investment Act 1986.
There is also a 20 per cent accelerated capital allowance for three years from the Inland Revenue Board on the purchase of moulds used in the production of IBS components.
Currently, many existing machinery at construction sites are ageing and in dire need of replacement.
“We cannot keep using old machinery; it is very costly to maintain and questionable in term of efficiency,” he said, adding that tax incentives for heavy machinery replacement would help improve safety and productivity.
Effective June 11 last year, the government had slashed import duties for three tariff codes under HS 8429.51.000, HS 8430.41.000 and HS 8431.43.000 to five per cent from 10 per cent, although those on the remaining seven tariff codes remain between 20 and 30 per cent.
“We appeal to the government to reduce import duties on the remaining seven tariff codes so as to be in line with Asean peers. Some of our neighbours have gone on to allow for duty-free imports of heavy machinery,” he said.
The International Trade and Industry Ministry has recently started investigations on whether steel imports are causing price dumping and warranting safeguard measures in the interests of steel millers.
However, construction companies via MBAM are appealing against the government’s plan to impose safeguard measures on steel products, amid fears that steel bar prices may rise drastically.
Foo said: “In January 2016, the price of steel bars was about RM1,500 per tonne. Within four months, it jumped RM2,700 per tonne in May 2016. And in the last four months it has come down to RM1,700 per tonne.
“The prices of steel bars in Malaysia are currently among the highest compared to other Asean countries. Also, the steel millers, here, are still enjoying subsidy on electricity tariff.
“Malaysia should not be led to a situation where steel millers engage in excessive profiteering and jeopardise growth of other sectors, including the construction industry,” he added.
Under the 11th Malaysia Plan (2016 to 2020), the government has set aside RM260 billion for development expenditure. This bodes well for the construction industry.
The top three construction projects are the MRT Line 1 and 2 costing around RM60 billion, the RM18 billion Refinery and Petrochemicals Integrated Development (Rapid) project in Pengerang, Johor, and the RM11 billion futuristic township development of Cyberjaya city.
According to Bank Negara Malaysia, the local construction sector remained the fastest-growing in the first half of the year, expanding 8.4 per cent compared to the overall economic growth of 4.1 per cent.