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PETALING JAYA: With the loan moratorium ending in a week, companies in the construction industry, with affected cash flow, are asking for government intervention.
Industry contributes 5% of gross domestic product (GDP), along with 1.46 million jobs in 20 other sectors.
Although most have resumed operations during the recovery motion control (MCO) order period, affected companies say they still need a breather.
The president of the Malaysian Master Builders Association (MBAM), Foo Chek Lee, notes that many companies are still in the red as work only restarted in June and payments for the work are still pending.
“With the loan moratorium ending this month, many would face problems paying off loans.
“If the government wants to stimulate the economy, it has to boost construction.
“But the downstream effect is too great, from transportation, cement, steel bars to the makcik that nasi lemak sells at the construction site,” he said, adding that the worker shortage is still evident with the freeze. of foreign workers still in force.
However, Foo said that MBAM is reaching out to Bank Negara to help its affected members.
The president of the Malaysian Bumiputera Contractors Association, Datuk Azman Yusoff, pointed out that the banks had not been helpful to many of their members, who are contractors of various kinds, who had sought help.
“They are not even willing to offer financial assistance to those who have projects. What else for those who do not have projects but need help?
“Some banks have also withdrawn the credit facilities that were offered.
“We hope that the government will step in and tell the banks to help the contractors finance their projects for the continuity of their business,” he said.
During an engagement session with industry and government players here yesterday, Labor Minister Datuk Seri Fadillah Yusof pointed out calls for the government to step in and help.
“With the pandemic, the cash flow of the companies has been affected and the borrowers cannot pay the loans.
“They requested that the government commit to the banks so that relaxation can be given to reduce the payment of their loan, or so that their lines of credit have a longer payment period.
“They also asked the banks not to send demand letters and freeze their accounts or cancel their lines of credit.
“These are the voices we get from industry players and we need more deliberation,” he said.
Also present was the Minister of the Prime Minister’s Department (Economic Affairs) Datuk Seri Mustapa Mohamed.
Given that the construction industry has three main components: the government, government-linked companies (GLC) and the private sector, Fadillah said that some leeway could be given to government projects.
But what about GLC and the private sector? The government will not be able to interfere in private projects because, sometimes, it is subject to a prior agreement.
“We are finding ways to make it easier for the construction industry to continue and contractors and players not to suffer,” he said.
To solve the problems often faced by the construction industry, Fadillah said a high-level committee will be formed, involving government officials and industry players.
“After today, we will compile all the suggestions, opinions of the players in the industry and we will put a note from the cabinet.
“Once there is a directive from the Cabinet, we will have the high-level committee meeting.
“From then on, we will work together with industry players and all stakeholders in terms of policy, incentives for industry players and also how we can resolve discrepancies related to practices, terms and conditions, and rules and regulations involving local authorities. ”He added.
Mustapa noted that the committee will be led by the Minister of Works and will focus on solving problems, such as minimizing red tape and addressing the difference in rules between states and local councils.
“Such a permanent platform is necessary to reduce problems because the construction industry is the most important sector.
“When there is such a platform, we will have regular follow-up, a proper secretariat and detailed meetings. Then we can see what has been done and what has not.
“We want to listen. We facilitate and not frustrate, ”he said, adding that in the second quarter of this year, the construction industry contracted 44.5%.
Meanwhile, Fadillah said in his speech that inspections conducted by the Construction Industry Development Board (CIDB), from April 20 to September 20, at 7,590 construction sites across the country found that 149 of them they had not resumed operations, 45 of which faced financial problems among other problems.
He added that the industry is highly dependent on foreign labor with 438,264 workers and that there was low adoption of technology.
“There has also been a failure to obtain funds from financial institutions for projects affected by Covid-19,” he said.
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