KANGAR: Some 2,000 small-scale contractors in Perlis are facing a bleak future due to a hike in building material costs following the implementation of the diesel subsidy rationalisation, which began on June 10.
Some claimed that they could stay afloat for only another three months due to the spike in prices, which saw building material costs increase by up to 30 per cent.
Malaysia Bumiputera Contractors Association (PKBM) Perlis chapter president Norhayati Hashim said the situation had adversely impacted contractors in G1, G2 and G3 classes, most of whom handle projects valued below RM1 million.
"We (the association) are urging the authorities, especially the Domestic Trade and Cost of Living Ministry, to monitor the price hikes that are burdening contractors.
"We are appealing to the government to consider extending the diesel subsidy for tipper lorries, which transport building materials," she said in a press conference today.
Norhayati also called for the government to review the Variation of Price (VOP) for awarded and ongoing projects.
"For example, in this situation, a project worth RM200,000, (contractors) is not making any profit.
"The relevant authority may also consider reducing the length of the road construction project from one kilometre to 800m to help contractors avoid incurring even bigger losses," she said.
She added that the diesel subsidy rationalisation exercise had landed opportunities for unscrupulous parties to take advantage of the situation by hiking building material prices.
"As such, we are calling for enforcement to be stepped up while the value of projects is reviewed.
"For example, the ceiling price of projects for G1 contractors should be revised from RM200,000 to RM300,000.
"The government should increase the ceiling value of projects for G2 contractors from RM500,000 to RM600,000 and the ceiling value for G3 contractors from RM1 million to RM1.5 million.
She said the prices of building materials have been increasing since the implementation of the Movement Control Order during the Covid-19 pandemic, and the situation has worsened.
"We used to earn a profit margin of about 30 per cent for each project, but this has plunged to just 10 per cent now," she said.