The Malaysian Insight

THE open-tender system of awarding contracts is causing major problems for smaller contractors and they want the government to address the issue in Budget 2020.

Class F Bumiputera Contractors Association president Tukiman Radion said the government must provide assistance to help them compete.

They want the government to ensure they have a fair share of projects in line with the Shared Prosperity policy unveiled by Putrajaya last week.

The open-tender system has seen big players taking even small projects, leaving the Class F contractors without work, he said.

His members are in dire straits as they have not received any project in the last four years, Tukiman said.

“We hope that Budget 2020 will see an introduction of a system where small projects are allocated to Class F contractors through a lottery system. This will be fair for us.

“We also want to enjoy the prosperity as being promised by the government. The government must use a new system to allocate small projects.

“The open-tender system allows the big contractors to take small projects. Sometimes, a collection of small contracts will be high in value,” he told The Malaysian Insight.

The work value limit for Class F contractors is RM200,000, and they usually focus on repair and maintenance projects, including road works and drainage.

Tukiman said the government should also increase the work value limit for them from RM200,000 to RM350,000.

The RM200,000 limit has remained unchanged in the past 17 years.

“Under this coming budget, the government must increase the ceiling value for our projects.”

He said the cost of building material has increased manifold in the past 17 years, resulting in these contractors not making big profits from their projects.

“Seventeen years ago, a bag of 50kg cement was RM8.50. Now it is RM18.

“A tonne of steel then was RM400. Now it is RM2,000. Our profit margin is increasingly becoming smaller.”

Tukiman also urged the government to limit the number of Class F contractors as they number nearly 24,000. – October 11, 2019.