KUCHING: The state government has introduced six new incentives to help mitigate problems faced by contractors, including shell companies, to prevent projects being delayed.
Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg said the move will safeguard the interest of the construction industry and the economy.
“We will provide advance payment for contracts. This is to help those that are referred to as ‘two dollar companies’. Their financial strength is not there, and if we want to assist, we want to assist these people.
“Secondly, we will allow up to three payments to be made without the contract documents in the first four months of the contract period,” he said when officiating at the ‘Seminar on New Initiatives to Enhance Sarawak’s Construction Industry’ at the Borneo Convention Centre Kuching (BCCK) today (Feb 8).
The incentives also include lowering the rate of liquidated and ascertained damages imposed; lowering minimum payment as well as other measures to alleviate projects affected by price hikes; extension of time (EOT) for projects with progress of at least 60 per cent based on the works programme, and mutual termination subject to prevailing criteria imposed.
Abang Johari stressed that these measures will minimise or even eradicate critically delayed projects and assist contractors’ project cashflow as well as achieve a ‘win-win’ situation for all parties under state government contracts.
The government in its effort to improve the construction industry’s competitive edge is also working towards the development of strategies for industry players to become global solution providers.
This is due to the impact the industry has on the nation’s economy with approximately 1.5 million people being employed under the sector with an expected annual growth of five percent in the next three years.
Abang Johari said these initiatives have been undertaken to further assist in the recovery of the local construction industry and the timely delivery of projects in Sarawak.
He has also advised the State Financial Secretary, Ministry of Infrastructure and Port Development and the Public Works Department Sarawak (JKRS) to formulate further initiatives to support and enhance project management and contract administration.
“While the support provided by the government may not be sufficient to alleviate the adverse effects of the pandemic, the assistance rendered will reduce and minimise margin erosions in the industry,” he added.
The Premier hoped the new initiatives will sustain the local construction industry.
