Provide evidence of price hikes, contractors told

Deputy Works Minister Ahmad Maslan has instructed contractors to provide records of sudden price increases in construction materials to the statistics department. This move is aimed at enabling the government to determine whether contractual variation of price (VOP) clauses should be applied. According to Maslan, as of August 10, most construction materials showed small and stable price increases, with steel and cement rising by less than 1%.

However, certain materials like sand experienced price hikes of up to 19% in some regions. The statistics department's data should be relied upon, but contractors must back up their claims with actual cost information. If the provided statistics are inaccurate, contractors are expected to submit feedback to the department along with supporting evidence.

A VOP clause is a contractual provision that permits adjustments to contract sums due to fluctuations in the prices of labor, materials, or fuel. Two major construction associations, the Master Builders Association Malaysia and the Bumiputera Contractors Association, have expressed concerns over rising costs affecting the sector more severely than general economic data indicates.

They argue that national-level statistics do not fully capture the true extent of cost pressures, particularly due to significant increases in essential materials' prices. These associations responded to Works Minister Alexander Nanta Linggi's recent statement that construction material cost hikes remain manageable amidst the global energy crisis, suggesting that contractors can still absorb the additional expenses and maintain project momentum without significant delays.