Poor management, financial weakness behind 75pc of delayed projects, says Ahmad Maslan

Approximately three-quarters of construction projects in Malaysia have been delayed or experienced issues due to poor management, insufficient oversight and financial instability, according to Deputy Works Minister Datuk Seri Ahmad Maslan. The remaining quarter of project delays were attributed to technical challenges at the site level.

At the CIDB Northern Region Contractor Convention 2026: NexGen Builders, Maslan emphasized the importance of contractors developing sound financial management, internal governance, and the ability to deliver projects on time, within budget, and to the required standards. He cautioned against reliance on technical competence alone, as contractors must now prioritize financial strength, skilled personnel, technology adoption, and proven delivery records to secure government tenders and compete effectively in the globalized market.

Maslan also urged the industry to reject various unethical practices such as shell companies, proxy bidding, tender-rigging, and the "Ali Baba" contracting method, where firms win contracts but outsource execution to third parties. He highlighted that Bumiputera firms should aim to build their expertise and execution capability rather than merely securing projects to rent out.

Currently, Bumiputera contractors constitute 72% of Grade G1 contractors but only 28% of Grade G7 contractors, suggesting that many Bumiputera firms are not progressing beyond the lowest contractor grade. Maslan encouraged contractors to embrace Building Information Modelling (BIM) and other digital tools, stating that countries like China have embedded BIM into their project lifecycles for over a decade.

Failure to adopt these technologies could render local contractors obsolete. He noted that Malaysia's federal development expenditure reached RM90 billion in 2024, RM86 billion in 2025, and targets RM81 billion for 2026. Contractors must be prepared to compete for projects while adhering to quality, safety, sustainability, integrity, and procurement requirements.

Penang is highlighted as a key economic and construction center, with overall economic growth of 7.3% in 2025 and a 13.4% expansion in its construction sector. The government launched CIS 33:2026, a Facility Management Good Practice Guide, to standardize asset and facility management practices. The sector, which includes asset management, facility operations, technology, safety, sustainability, and user experience, is seen as a valuable avenue for contractors to diversify services and generate new income streams after completing construction projects.

The two-day convention, held during International Construction Week 2026, gathered over 400 contractors, industry players, government agencies, and strategic partners to discuss various topics such as the Construction Action Plan 2026-2030, the Perlis Inland Port, Penang’s Mutiara LRT project, solar development, and sustainable construction.