Hartanah Kenyalang eyes price mechanism, firm project pipeline in Budget 2027

Hartanah Kenyalang Bhd seeks to shield contractors from soaring material and fuel costs on fixed-price public contracts in Budget 2027, while outlining a multi-year pipeline of infrastructure projects. Managing Director Seah Boon Tiat emphasized that a price fluctuation mechanism would be the decisive factor in the group's investment strategy for the upcoming year.

He highlighted the risk of price volatility affecting construction contracts due to escalating costs of steel, cement, fuel, logistics, and labor. Fixed-price tenders often leave contractors vulnerable to these fluctuations, leaving them with limited ability to adapt to rising material and fuel costs. Seah urged for a more transparent and fair price variation mechanism to better distribute risks without compromising project quality.

In terms of long-term planning, he advocated for a firm, multi-year implementation pipeline for public infrastructure projects, supported by clear tender and award timelines. This certainty would translate budget allocations into long-term investments, job creation, and enhanced local construction capabilities. For Budget 2026, Hartanah Kenyalang allocated nearly RM2 billion for school upgrades, RM3.3 billion for rural infrastructure, and RM2.2 billion for government accommodations.

The company hopes to continue prioritizing institutional buildings and essential infrastructure in Sarawak, including dilapidated schools, government facilities, rural roads, bridges, water infrastructure, and civil servant quarters. The service tax on construction services, introduced at six percent in July 2025, has added another layer of complexity for contractors.

Seah called for greater clarity and targeted relief for public-sector projects, particularly for essential social purposes such as schools, healthcare facilities, rural infrastructure, and government quarters, through a wider exemption, reimbursement mechanism, or clear contractual treatment of the tax.