Govt to reintroduce VOP clause to cover diesel, bitumen costs
The move comes as construction groups warn that rising prices of essential materials are putting pressure on contractors.
The Malaysian government has decided to reintroduce the variation of price (VOP) clause in order to assist construction contractors dealing with increasing costs of diesel and bitumen. Prime Minister Anwar Ibrahim announced this move during the tabling of the 2027 budget, stating that it was a response to concerns raised by contractors who are facing higher operating expenses.
The VOP clause permits adjustments to contract sums to account for changes in labor, material, or fuel prices. In addition to this, the government will permit projects worth up to RM5 million, which have pre-approved plans from the public works department, to be awarded through the quotation method to facilitate the expediting of public interest initiatives, including the construction of quarters, schools, hostels, clinics, and halls.
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- Govt to reintroduce VOP clause to cover diesel, bitumen costs freemalaysiatoday.com
