L E M B AG A J U R U TE R A M A L AY S I A

KDN PP 11720/4/2013 (032270) B OA RD OF E NGI NEERS MALAYSIA

THE VOL.78
APRIL-JUNE 2019
INGENIEUR
M A G A Z I N E O F T H E B O A R D O F E N G I N E E R S M A L A Y S I A

DISPUTE
RESOLUTION
 EDITORIAL BOARD
2019-2020

PRESIDENT EDITORIAL BOARD

Dato’ Sri Ir. Dr Roslan bin Md Taha
ADVISOR
BOARD MEMBERS Dato’ Sri Ir. Dr Roslan bin Md Taha
Datuk Wira Ir. Md Sidek bin Ahmad
Datuk Ir. Amrullah bin Kamal CHAIRMAN
Datuk Ir. Mohd Adnan bin Mohd Nor Prof. Ir. Dr Norlida binti Buniyamin
Dato’ Prof. Ir. Dr. Hassan bin Basri
Dato’ Ir. Dr. Md Nasir bin Md Noh EDITOR
Datu Ir. Zuraimi bin Hj Sabki Dato’ Ir. Fong Tian Yong
Prof. Ir. Megat Johari bin Megat Mohd Noor
Ir. K. Sundraraj
EDITORIAL MEMBERS
Ir. Omar bin Mat Piah
Prof. Ir. Dr K S Kannan
Prof. Ir. Dr. Norlida binti Buniyamin
Ir. Prem Kumar
Ir. David Lai Kong Phooi
Ir. Chan Boon Teik
Ir. Gopal Narian Kutty
Ir. Lee Boon Chong
Ir. Fam Yew Hin
Ar. Zuraina Leily binti Awalludin
Dato’ Sr Jaafar bin Shahidan

REGISTRAR
Ir. Hizamul-din bin Ab. Rahman

SECRETARY
Ir. Suhaizad bin Hj Sulaiman

The Ingenieur is published quarterly by the Board of Engineers Malaysia (Lembaga Jurutera Malaysia)
and is distributed free to registered Professional Engineers. The statements and opinions expressed in
this publication are those of the writers. BEM invites all engineers and readers to contribute relevant
articles and views to the Publisher.

PUBLISHER
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Tingkat 17, Ibu Pejabat JKR, Jalan Sultan Salahuddin, 50580 Kuala Lumpur.
Tel: 03-2698 0590, 03-2691 2090 Fax 03-2692 5017
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1
 INGENIEUR

CONTENTS

4 President’s Message 18 Limitation of Liability of Engineers

Announcement
5 Call for Articles
Interview with BEM President
6 Tenure with Many ‘Firsts’
Cover Feature
13 Making Dispute Resolutions
Arbitrary: Arbitration Clauses
Buried Under Construction
Contracts
16 CIPAA 2012: An Overview
22 Recent Federal Court Decision on
Liquidated Damages Clauses
Position Paper
25 Responsibility and Accountability
of Stakeholders in the
Construction Industry
Feature
42 Strategies to Promote Energy
Efficiency in Industries
47 Energy Performance Contract in
Malaysia and Other Countries

57 77

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 54 5G: A Strategic Resource 16

Tribute
57 Tribute to the late Ir. Dr Abdul
Majid bin Dato’ Abu Kassim

Report
61 Consequences and Flaws of the
Certificate of Completion and
Compliance – Comparative 42
Analysis with Proposed Solutions1
71 Response by the Board of
Engineers, Malaysia

Engineering Features
77 Ancient Construction Marvel of
Wutaishan and Hanging Temple
of Hengshan, China
47
Engineering Nostalgia Energy Performance
Contracting: Guide for
81 Muar Bridge Opened to Traffic Federal Buildings
in 1967

54 81

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 INGENIEUR
PRESIDENT’S MESSAGE
Dispute
Resolution
D
ispute resolution takes many forms.
Malaysia is well developed in this respect
considering the long history of a legal system
inherited from the British Administration. However,
with the increasing number of development
projects, the trend is moving towards Alternative
Dispute Resolution (ADR) to relieve the burden of
the court. There is also a suggestion for litigation
filed in the court to be converted to university
arbitration to utilise the untapped potential of
cheaper and faster arbitration services.
An international organisation is promoting
commercial dispute prevention and settlement,
placing more focus on dispute preventive
measures. This will undoubtedly be a preferred
choice for industries in preventing project delay
and additional cost of doing business.
The long awaited longstop liability on the design
of consulting engineers under the Limitation Act
was finally passed by the Parliament and gazetted
recently. Here the article on “Limitation of Liability
of Engineers” provides readers with the technical
aspects of the legal amendments, in particular to
the over-riding 15-year longstop from the act of
negligence giving rise to damage.
As a reminder to engineers of their liability for
works undertaken by them, the Position Paper on
“Responsibility and Accountability of Stakeholders
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in the Construction Industry” covers a wide range
of areas of possible failure. The matrix of what
goes wrong covers all stakeholders involved
from developer to local authority on one side and
the supply chain of construction industry from
project inception stage to demolition stage on
the other. Practicing engineers should study the
recommendations by the BEM Working Group at
each stage of the supply chain.
The issue of liquidated damages under
construction contracts often leads to argument
between parties concerned. The article on “Recent
Federal Court Decision on Liquidated Damages
Clauses” provides deeper insight into the matter
and what each party should consider to ensure
that the amount stipulated in the liquidated
damages clauses is a reasonable amount of
compensation for the breach.
As my last message as President of BEM, I
wish to express my gratitude to the Publication
Committee for their wonderful work, and to all
Board members and readers for your unwavering
support during my tenure. I wish to end here by
saying that I enjoyed serving BEM and seeing the
progress over the last few years.
Dato’ Sri Ir. Dr Roslan bin Md Taha
President BEM
 L E M B AG A J U R U TE R A M A L AY S I A
KDN PP 11720/4/2013 (032270) BO ARD O F ENG INEERS M A L AY S I A

THE VOL.77
JANUARY-MARCH 2019
INGENIEUR
M A G A Z I N E O F T H E B O A R D O F E N G I N E E R S M A L A Y S I A
The Ingenieur is published quarterly by the Board of
Engineers Malaysia. The following are the themes

ANNOUNCEMENT
for the coming issues.
• Vol. 79, July-Sept 2019
E MERGING
T E C H N O L O G Y
Engineering Construction Practices
• Vol. 80, Oct-Dec 2019
Aero & Aviation Industry
• Vol. 81, Jan-Mar 2020
Engineering Fraternity

Articles and other contributions relevant to the

themes are welcomed, but the decision to publish
rests with the Editorial Board.
Advertising inquiries are also welcomed. Please
refer to the BEM advertisement in this issue for the
latest rate card and booking form.

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 INGENIEUR
INTERVIEW WITH BEM PRESIDENT
Tenure with Many ‘Firsts’
INTERVIEW
It has been a productive two-year
tenure for BEM President Dato’ Sri
Ir. Roslan bin Md Taha. He is very
happy that he experienced many
‘firsts’ in terms of major events and
significant developments for the
engineering fraternity.
BEM President Dato’ Sri Ir. Roslan bin Md Taha will
end his tenure upon his retirement as Director-
General (DG) of JKR. The Ingenieur Editorial
Committee comprising Dato’ Ir. Fong Tian Yong
and Prof. Ir. Dr K S Kannan, managed to catch up
with him to review developments and events.
Dato’ Sri Ir. Roslan bin Taha commented that
he was very happy with developments during this
two-year tenure (from January 1, 2017) as DG of
JKR and BEM President. He experienced many
‘firsts’, including the first visit by the Minister of
Works, YB Tuan Baru Bian to the BEM office on
October 10, 2018. Another first was the BEM Open
Day on December 4-5, 2018. He emphasised
that this event was significant as it was held in
conjunction with the first “Hari Profesion Teknikal
Negara” (The first Saturday in December is chosen
for this special day).
Also within his tenure, Dato’ Sri Roslan
was pleased that the engineering fraternity
achieved significant milestones with the first
ever registration of Engineering Technologist and
Inspector of Works by BEM and the admission
of BEM as full signatory of Sydney Accord and
Dublin Accord in June 2018 at the International
Engineering Alliance Meeting 2018 (IEAM2018),
London, UK. In relation to this, BEM is well
recognised in Asia and countries such as India,
Pakistan, Indonesia and Myanmar are requesting
for assistance to become signatories. “Some
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of our renowned Board Members have been
appointed as assessors,” he pointed out.
The BEM President was proud that the
Government has given recognition to JKR and
the engineering profession. “This should never
be put aside,” he emphasised. He is glad that
Professional Engineers with Practising Certificate
(PEPC) will be given added responsibilities, notably
in the issue of Planning Permission for certain
categories of development. “It is an honour given
to PEPC. In the long run, this can speed up the
country’s development and our economy can
benefit,” he remarked.
Looking ahead, he said he has a few
aspirations. One is to see more engineers
registered as ASEAN Chartered Professional
Engineer (ACPE) so that they can extend their work
in this region. He noted that there are currently
638 ACPE (Malaysia), and this places Malaysia
second among its ASEAN neighbours.
On reflection, Dato’ Sri Ir. Roslan said he is
retiring with good memories. “I leave with an open
heart, open mind and full of satisfaction,” he said.
He believed that he has set a momentum for
active development in JKR and BEM, and hopes
that his successor can continue and bring it up to
the next level.
 Below are excerpts of the interview with the
BEM President:
Since you assumed the post of President of BEM
in 2017, there were many activities organised by
BEM. Would you like to share with us those that
impressed you most?
I am pleased to mention the bulk registration of
engineering graduates with local universities. Based
on the Registration of Engineers Act 1967 (Revised
2015), it is compulsory for engineering graduates to
register with BEM. The list of universities has grown
and we now have 20 universities signing MOU on
bulk registration with BEM.
Of course, the greatest achievement is that
our engineering education is now on par with
international universities, now that BEM is
signatory to three Accords (Sydney Accord, Dublin
Accord and Washington Accord). In addition, BEM
was appointed as Chairman of the Network of
Accreditation Bodies for Engineering Education in
Asia (NABEEA) for two terms (2017-2019).
ACCREDITATION - Sydney Accord & Dublin
Accord
BEM was accepted as Provisional Signatory
of Sydney Accord and Dublin Accord on June
21, 2017 at the International Engineering
Alliance Meeting held in Alaska.
BEM was admitted as Full Signatory of Sydney
Accord and Dublin Accord in June 2018 at
International Engineering Alliance Meeting
2018 (IEAM2018), London, UK.
BEM has made remarkable progress and
organised many programmes and activities. We
had the first BEM Open Day and the first visit by
the Minister of Works.

Signing of MoU on Bulk Graduate Engineer Registration with 20 local universities

Institutions of Higher Learning Date
1. Universiti Teknologi Malaysia (UTM) 2013
2. Universiti Kuala Lumpur (UniKL)
3. Universiti Malaya (UM)
4. Universiti Kebangsaan Malaysia (UKM)
5. Universiti Teknologi Mara (UiTM)
6. Universiti Tun Hussein Onn Malaysia (UTHM)
7. Universiti Teknologi Petronas (UTP)
8. Universiti Multimedia (MMU) 19 universities in which:
9. Taylor’s University
10. Universiti Malaysia Sarawak (UNIMAS) 18 universities in 2017.
11. Curtin University 1 university in 2018
12. UCTS Sarawak (UNITEN)
13. Swinburne University Of Technology, Sarawak Campus
14. Asia Pacific University of Technology (APU)
15. Universiti Tunku Abdul Rahman (UTAR)
16. Universiti Islam Antarabangsa (IIUM)
17. Universiti Malaysia Sabah
18. Universiti Sains Malaysia
19. UCSI University
20. Universiti Tenaga Nasional

7
 INGENIEUR
BEM President expressing his views to Dato' Fong and Prof. Kannan during the interview
We realise that you have put in a lot of
emphasis on safety of construction during
your tenure and also when you were the
Director of JKR Negeri Sembilan. Would you
like to elaborate on these areas?
I believe in the popular tagline “Safety should
not be compromised.” JKR is certified under ISO
18001 where contracts allow adequate pricing
for all initiatives related to safety like safety and
health measures and the Safety & Health Officer.
Our products must be safe and friendly to the
environment.
In developed countries, they incorporate safety
at the construction design stage. JKR and CIDB
have encouraged local construction companies to
follow this path.
During your tenure, the first ever registration
of Engineering Technologist and Inspector of
Works as a professional recognition for their
roles and responsibilities in the engineering
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fraternity would have some impact in the
construction industry. Would you like to share
with us the current position of registration and
the impact in the construction industry?
From statistics I was told that there were 6,313
Engineering Technologists and 6,416 Inspector of
Works registered.
We gauge the role and contribution of
registered Engineering Technologists to the
construction industry by conducting a survey in
2018. After sending out questionnaires, 1,150
responded. The survey covered demographics,
job satisfaction, constraints in securing first
job, choice of professional route and additional
feedback. The survey report revealed that two-
thirds of respondents were not satisfied with
their current employment in terms of emolument
and job title. Nearly half of them earned less
than RM2,000 upon graduation. Interestingly,
42% of them were employed as engineers.
BEM Representation at International Meetings

Date Meeting Venue

26 – 30.3.2018 Council of Engineers Thailand & Thailand Accreditation Thailand

Board of Engineering Education (TABEE)
As Observer
25 – 29.6.2018 International Engineering Alliance Meeting 2018 London, UK
(IEAM2018)
25.6.2018 Network of Accreditation Bodies for Engineering London, UK
Education in Asia (NABEEA)
CCS & ACPECC Meetings
17 – 19.1.2018 89th CCS & 36th ACPECC Bangkok, Thailand
21 – 25.5.2018 90th CCS & 37th ACPECC Singapore
7 – 11.11.2018 91st CCS & 38th ACPECC Myanmar
Registered 2nd highest ACPE in ASEAN countries.
9 – 16.9.2018 Council for the Regulation of Engineering in Nigeria Nigeria
(COREN)
As Observer
11 – 16.11.2018 Myanmar Engineering Council (MEngC) Myanmar
As Observer
15.12.2018 Dialogue with Professional Engineers Board of Bandung, Indonesia
Singapore
17.12.2018 Courtesy Visit to Persatuan Insinyur Indonesia Jakarta, Indonesia

Total BEM Registration (as at 18.4.2019)

Categories 2014 2015 2016 2017 2018 2019

Graduate Engineer 79,590 86,594 95,314 106,664 117,252 119,583
Engineering - - 1,915 3,974 6,050 6,313
Technologist
Inspector of Works - 24 897 1,941 6,001 6,416
Professional 16,475 16,960 7,252 7,936 8,241 9,400
Engineer
Professional - - 10,434 10,428 10,597 10,432
Engineer with
Practising
Certificate
Body Corporate 1,342 1,395 1,437 1,484 1,521 1,536
Partnership 291 310 346 338 346 350
Sole Proprietorship 1,367 1,449 1,538 1,597 1,652 1,165
Multidiscipline 46 50 58 59 61 62
Accredited Checker 35 36 36 36 34 37
*ACPE 199 228 284 351 590 638

*ACPE - ASEAN Chartered Professional Engineers

For mobility of engineers within ASEAN countries.

9
 INGENIEUR
Generally, Engineering Technologists expect better
recognition from the industry and they think BEM
can assist in this respect. They wish to be treated
as engineers and asked for a more simplified
route by BEM to enhance their professional status
and career path. A large percentage, namely 86%
of Engineering Technologists preferred BEM to
create a new route specific for them to become
Professional Engineering Technologists (PET).
In the process of ensuring the professionalism
of Professional Engineers in delivering the
satisfactory services to the industries, what
concrete steps have BEM taken so far?
We have been stringent and have taken action when
required. On the complaints received, there were 66
new cases but 43 had no prima facie. In 2018, 13
cases were recomended for hearing and 23 are still
under investigation. Eight were found guilty.
On the Certificate of Completion and Compliance
(CCCs) that are issued by Professional Engineer
with Practising Certificate (PEPC), can we have
some statistics on the numbers issued by PEPC
and how many complaints were received over
the last few years?
As of April 2019, 5,640 CCCs were issued. Of
these 389 were late submissions and 345 had
errors. Based on the statistics, complaints were
only on one per cent of certificates issued. This is
not significant. I urge all parties to uphold integrity.
Let it come from within yourselves so that we can
be on par with developed nations.
Status/Decision of Investigating
Committee In 2018
No Recommend For Processing
Case Hearing
9 13 23
N.B. The above figures include cases brought forward from previous years and may not
necessarily include all prima facie cases concluded by PPC but not endorsed by the Board by
year end.
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We understand that the Focus Group of
Development Construction Permit (FGDCP)
has been considering allowing PEPCs to
issue Kebenaran Merancang (KM) or Planning
Permission for certain categories of building. Do
you think PEPCs are ready for this? What advice
would you like to give to PEPCs who choose to
submit KM for the client?
I think it is a good sign and gesture from the
Industry and Government to recognise the role
and competency of engineers in this new frontier
of KM submission which has been the domain of
Planners.
However, I must caution PEPCs to tread
on this new entitlement carefully, seriously
and professionally. I am sure the Planners
will be watching carefully whether PEPCs are
up to the mark to submit KM in a competent
manner. What it means is that the submitted
KM should not have too many errors or not
complying with the relevant policies such as
the Town and Country Planning Act, Act 172,
planning guidelines etc.
However, PEPCs should not be discouraged
by this. The fact that you can be the submitting
person is because you have input in the
respective categories of development projects
for KM. (There are nine sub-categories that
PEPCs can submit KM as of today). PEPCs can
always engaged Planners to handle the parts that
PEPCs are not familiar with until such time they
are familiar with them.
Hearing By Disciplinary Appeal To Appeal Board
Committee in 2018 in 2018
Guilty Not Guilty Upheld Reject
9 - 1 -
Employment status of Engineering Technologists according to sectors

Monthly income of Engineering Technologists upon graduation

Choice of specific category for Engineering Technologist to acquire professional status (Professional
Engineering Technologist or PET)

11
 INGENIEUR
‟
I am proud to say our Malaysian Engineering education is
very comprehensive as the Engineering Accreditation Council
(EAC) and Engineering Technology Accreditation Council
(ETAC) have played significant roles in it.
How do you gauge the standard of Malaysian
engineers and also our engineering graduates
internationally? What are BEM efforts in
ensuring that our graduates meet the global
standard in engineering education?
I am proud to say our Malaysian Engineering
education is very comprehensive as the Engineering
Accreditation Council (EAC) and Engineering
Technology Accreditation Council (ETAC) have
played significant roles in it. They assess our
engineering degrees from local universities are
up to mark with international requirements. Rest
assured, we are doing a good job.
EAC and ETAC are responsible for conducting
accreditation of all engineering, engineering
technology and engineering technician education
programmes in Malaysia, so that graduates of
these programmes can be registered with the
BEM before providing engineering services at the
graduate and professional levels.
The stringent standards set by the EAC and
ETAC are benchmarked against the international
standards upheld by the International Engineering
Alliance (IEA). These standards are embedded
in the Washington, Sydney and Dublin Accords
covering the engineering, engineering technology
and engineering technician education standards
respectively. BEM is a full signatory of these
Accords and is periodically monitored to ensure
adherence. Malaysian engineering degrees
therefore enjoy substantial equivalency with
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countries like United States, Russia, United
Kingdom and Australia plus others which are
signatories of the Accords. Our graduates are not
required to be re-examined in terms of academic
qualification.
As a Council Member of Malaysian Quality
Agency (MQA), I attend meetings with other
Government departments such as the Ministry of
Education and the Ministry of Human Resources.
Our collaboration to improve standards never
stops. We work as a team to keep abreast of
engineering education.
With the coming of 4.0 IR as a disruptive
innovation and commercialisation, how
would you like to advise young engineers
and undergraduates in engineering faculties
preparing for the new ICT era?
The disruptive power of 4.0 IR is very clear in that
many jobs or professions may be replaced or
reduced with the coming of 4.0 IR which is already
at our doorsteps.
We need to keep track of these new
developments and adapt, seeing them not as a
threat but rather as an opportunity. Take for an
example, CADD had replaced the conventional
draughtsman. Now the 3D printing is gathering
popularity and soon it will be the norm of the
manufacturing industry to move into that area. In
short, engineers have to be IT savvy to face the
onslaught of 4.0 IR. - Inforeach
Making Dispute Resolutions
Arbitrary: Arbitration
Clauses Buried Under
Construction Contracts
By Richard Kok,
Rhiza & Richard
The Back-to-Back Principle
In complex construction projects, there are
numerous project participants with different roles
and responsibilities. Subcontracting is a common
practice. Whilst the contractual arrangements
are complex and the contractual chains are long,
it is very common for sub-contracts and supply
agreements to be back-to-back with the main
contract provisions.
The back-to-back principle means that all or
part of the obligations of the main contractor
under the main contract are replicated in the
sub-contracts; all or part of the obligations of the
main contract and sub-contracts are replicated
in the sub-sub-contracts and so on, down the
contractual chain.
On one hand, the main contractors could
avoid gaps in obligations and liabilities among
the various project participants. On the other
hand, it is commercially justifiable as it ensures
consistency of the work throughout the whole
construction project.
Whilst the back-to-back principle is rather
straightforward, problems often arise in practice
from the way in which the various different
contracts are documented. Poorly drafted
contracts can be difficult to interpret, leading
to disputes. The problem is further aggravated
if the main contracts are not available to the
sub-contractors despite contractual provisions
providing otherwise. Hence, the reality is that the
sub-contractors may not have sighted the main
contract at all until a dispute arises.
The main contracts would certainly contain a
dispute resolution clause to resolve any disputes
COVER FEATURE
arising by way of mediation, expert determination,
arbitration, a combination of dispute resolutions,
etc.
However, sub-contractors who had not sighted
the main contracts would not have known that
legally they are taken to have “agreed” to such
an arbitration clause, due to the back-to-back
arrangement. This will eventually take away their
right to resolving any differences in the courts
against the contractor on the tier above.
Meaning of Arbitration
The term “arbitration” if looked up on the Internet
would inter alia simply mean “the hearing
and determining of a dispute or the settling of
differences between parties by a person or
persons chosen or agreed to by them”. It does
not say one will lose the option of pursuing their
case in court if they have agreed to arbitration.
For contractors who had no experience in dispute
resolution, even if they had taken the effort to
look up the meaning of arbitration, they may
not be aware of the legal effect of an inclusion
of such clause in their contracts, more so when
such clauses are ‘included’ via a back-to-back
arrangement.
Section 9(1) Arbitration Act 2005 defines
“arbitration agreement” as;
“In this Act, “arbitration agreement”
means an agreement by the parties to
submit to arbitration all or certain disputes
which have arisen or which may arise
between them in respect of a defined legal
relationship, whether contractual or not.”
13
 INGENIEUR
Malaysia enacted the new Arbitration Act 2005 based on
UNCITRAL
MODEL LAW ON the United Nations Commission on International Trade
INTERNATIONAL
COMMERCIAL
ARBITRATION
Law (UNCITRAL) Model Law on International Commercial
Arbitration.
Merely by looking at Section 9(1) Arbitration
Act 2005, one would understand that it is an
agreement that parties submit their disputes to
arbitration proceedings.
However, Section 10(1) of the Arbitration Act
2005 further states that;
“A court before which proceedings are
brought in respect of a matter which is the
subject of an arbitration agreement shall,
where a party makes an application before
taking any other steps in the proceedings,
stay those proceedings and refer the
parties to arbitration unless it finds that the
agreement is null and void, inoperative or
incapable of being performed.”
Please note the word “shall” used in Section
10(1) above. This means that Section 10(1) of
the Arbitration Act 2005, being the operative
provision, provides for a mandatory stay of
court proceedings where there is an arbitration
agreement unless the arbitration agreement is
null and void, inoperative or incapable of being
performed. In layman terms, this means that the
Court must stop or suspend a legal claim, if there
is an arbitration agreement found between the
parties unless the arbitration agreement is “null
and void, inoperative or incapable”. However,
the exception, i.e. “null and void, inoperative or
incapable” is rarely invoked by the court to strike
down arbitration agreements due to the liberal
approach the courts have adopted in interpreting
arbitration clauses (See heading below, “The
Court’s approach (i): Interpreting an “Arbitration
Agreement””, for further discussion).
Why Mandatory and Binding?
There is a significant global shift to arbitration.
This can be seen from the signing and ratification
of various pro-arbitration international treaties
by a large number of countries. These include
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the New York Convention and the United
Nations Commission on International Trade
Law (UNCITRAL) Model Law on International
Commercial Arbitration, where Malaysia is a
Contracting State of both the treaties.
On December 30, 2005, Malaysia enacted
the new Arbitration Act 2005 based on the United
Nations Commission on International Trade
Law (UNCITRAL) Model Law on International
Commercial Arbitration. The new Act came into
force on March 15, 2006 and it repealed and
replaced the previous Arbitration Act 1952. The
stay provision of Section 10 of the Arbitration
Act 2005, which follows Model Law Article 8,
basically makes the stay mandatory where there
is a bona fide dispute and removes the discretion
to retain the proceedings in court given by Section
6 of the old Act. In addition, Article II.3 of the New
York Convention requires a mandatory stay to be
provided where the arbitration is to be held in a
convention country.
However, such intention for mandatory
arbitration may not be well served simply
because of the high fees and costs of initiating
an arbitration, which is very much higher than
commencing a claim in Court. Furthermore, it must
not be forgotten that arbitration proceedings are
not any less adversarial than legal proceedings.
In fact, arbitration proceedings can be overly
technical and complex. At least in litigation, the
Courts have maxims of equity and inherent court’s
jurisdiction to avoid injustice that comes into play
to allow some flexibility in interpreting the law.
Such rules are not apparent in arbitration.
The Court’s approach (i): Interpreting an
“arbitration agreement”
Standard arbitration clauses seen in standard
form contracts such as the PAM 2006 Form of
Building Contract, the CIDB Standard Form of
Contract for Building Works, the PWD 203A Form,
FIDIC Form, etc. create lesser issues, because the
intention for a mandatory and binding arbitration
is clear and obvious.
However, some contracts adopted by the
employers have “defective” arbitration clauses
that lack clarity and are downright ambiguous. For
example, in the case of Mangistaumunaigaz Oil
Production Association v United World Trade Inc.
[1995] 1 QBD 617, the agreement provided for
“Arbitration, if any, by I.C.C. rules in London” which
the Court upheld as an arbitration agreement.
When upholding certain unhappily drafted
arbitration clauses, the courts did so because
they view such clauses as an agreement between
the parties. When courts view such clauses as
an agreement between the parties, they will
ensure every effort is made to uphold it. The
courts believe that such approach is a business
sense approach. An arbitration clause may be
incorporated by a back-to-back arrangement. In
such cases, it is arguable if the sub-contractors,
who in reality had very little bargaining power, had
really agreed to such clauses.
The Court’s approach (ii): Incorporation of
an “arbitration agreement” by reference
Apart from the liberal approach that the Courts
have adopted in interpreting an arbitration
agreement, by virtue of section 9(5) of the
Arbitration Act 2005 and the development
in common law the position now is that a
general reference to a foreign document in the
construction contract would allow incorporation
of any arbitration agreement found in the said
foreign document (Ajwa for Food Industries Co
(MIGOP), Egypt v Pacific Inter-Link Sdn Bhd [2013]
5 MLJ 625).
The law allows the mere reference of the word
“arbitration” in another document or contract to
oust the Court’s jurisdiction. This seems contrary
to the very root of contract law, namely the
intention of the parties and the requirement of
consent to form any agreement.
Such an approach could create an injustice
especially in the construction industry where a
contract could refer to hundreds if not thousands of
documents and if any one of these documents had
an arbitration clause, then the contracting parties
have no choice but to resort to arbitration. In effect,
such arbitration agreements are ‘hidden’ in the
contract but has full legal force on the parties.
This is no different than ‘forced arbitration’ in
employment, insurance, home-building, car loans
and leases, credit cards, retirement accounts,
investment accounts, and nursing facilities, to
name a few.
Multi-tier Dispute Resolution clause
If this is not bad enough, there are scenarios
where contracts provide for a multi-tier dispute
resolution clause that requires the contractor to
comply with certain requirements, for instance to
submit a report to an officer from the employer, to
take part in mediation etc., before being able to
initiate arbitration proceedings whilst already being
hindered from filing a legal suit. Such pre-requisite
requirements are binding on the parties. Cases
have held that such pre-conditions are mandatory
and have to be adhered to before one can refer
to arbitration. The contractor will be stopped from
filing a legal suit or an arbitration proceeding unless
the steps as stipulated under the said multi-tier
arbitration clause has been satisfied. An example
would be Clause 67 of the PWD Form DB (Rev 2007).
Conclusion
In short, most of the time some contractors without
experience of dispute resolution think arbitration
means sitting down and settling the case, but they
do not know the adversarial nature, costs and time
involved in arbitration. They certainly do not know
that courts, when interpreting contracts, do not
need to consider what they think are the clauses
they had agreed on. They also may not know that if
somewhere in their contract they had accidentally
referred to a document which has an arbitration
clause, they would then be taken to have agreed
to arbitration. The bottom line is, they may have
“an arbitration clause” forced on them. The reality
is that this would end up stifling the contractors’
suits that are only seeking payments for work
done. Already out of pocket, they may now have to
pay more for a dispute resolution.
15
 INGENIEUR

CIPAA 2012: AN OVERVIEW

By Lam Wai Loon and Serene Hiew
Harold & Lam Partnership
COVER FEATURE

T
he Construction Industry Payment &
Adjudication Act 2012 (“CIPAA 2012”),
for a fast, effective and cheaper option
to resolve payment disputes arising from a
contract for construction related works done
and services rendered, was introduced by way of
an Act of Parliament in 2012. This mechanism
is available to work and service providers in the
construction industry (including contractors, sub-
contractors, suppliers, architects, engineers,
quantity surveyors and the like) provided always
that there is a written construction contract and
the construction project is within the territory of
Malaysia. The main idea behind the introduction
of CIPAA 2012 is to help alleviate the prevailing
problems of non-payment or delayed payments
and under- cer tification in the Malaysian
construction industry. Although most disputes in
the construction industry revolve around payment
issues, there are some basic requirements that a
party seeking to resort to the mechanism would
have to consider before commencing a CIPAA
process namely:-
●● Is there a written construction contract?
●● Are there payments for work done —
certified or uncertified — left unpaid?
●● Are these payments already due (to refer to
period for honouring certificate)?
●● Are there supporting documents to verify
the claim?

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 The entire CIPAA process takes about 3.5
to 5 months. A claim under CIPAA 2012 can be
made during the course of the project or after the
completion of the project works. This duration
is short when compared with court litigation or
arbitration. However, it is generally a documents-
only proceeding and as such, a party who wishes
to commence CIPAA proceedings should keep
good documentary records to support its payment
claim. One of the appealing features of the CIPAA
process is that the Courts have ruled that the
defending party, also known as the non-paying
party, shall not be entitled to launch a counter-
claim against the claimant that is more than the
amount claimed by the claimant in the CIPAA
proceeding. At the very best, the defending party
can only zerorise the claimant’s claim through
offsets or cross claims.
PAYMENT Payment
CLAIM Response
Adjudication Adjudication
Response Claim
Adjudication
DELIVERY
Reply
OF
DECISION
For example, Contractor X claims for
RM500,000.00 pursuant to an Architect’s
Payment Certificate. Employer Y disputes the claim
and states that it is entitled to   liquidated and
ascertained damages (LAD) of RM800,000.00
and counterclaims for RM300,000.00 against
Contractor X. Even if the adjudicator finds that
Employer Y’s defence is valid and it is entitled
to the deduction of LAD, the adjudicator cannot
award the RM300,000.00 against Contractor
X. The most the adjudicator can decide is that
Contractor X is not entitled to any money from
Employer Y.
The chart below briefly shows you the process
of a CIPAA proceeding from the filing of a Payment
Claim until the delivery of the adjudication decision
by the Adjudicator.
Notice of
Adjudication
Appointment
of Adjudicator
17
 INGENIEUR
Limitation of Liability of
Engineers
COVER FEATURE
By Ir. Lai Sze Ching
T
he liability of an engineer has been a thorny
issue as there is always a fear of “life
guaranteed” liability for all the design work
carried out by the engineers. This issue has finally
been resolved when the Limitation Act 1953
(“Limitation Act”) was amended recently.
The Limitation (Amendment) Act 2018
(“Amended Act”) was passed by the Malaysian
Parliament on April 4, 2018. The Act was
subsequently granted Royal Assent by the Yang di-
Pertuan Agong and gazetted on April 27, 2018 and
May 4, 2018 respectively, and will come into force
on a date to be appointed by the Minister.
The objectives of the Amended Act are to:
1. postpone the commencement of the
limitation period when a person is under
a disability at the time the cause of action
accrued;
2. extend the limitation period in cases of
negligence not involving personal injury and
the damage was not discoverable prior to
the expiry of the statutory limitation period;
and
3. provide an overriding 15-year longstop
from the act of negligence giving rise to the
damage.
This article will discuss the amended new
Section 6A of the Amended Act which addresses
the last two issues.
It must be noted that as Sarawak and Sabah
have their own legislation on limitation, therefore
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the Amended Act is not applicable in those
States.
Extension of Limitation Periods in the
Limitation Act 1953
Section 6(1)(a) of the Limitation Act provides that
any legal action must be brought within six years
from the date that a cause of action accrued.
What is a cause of action? The Court in Lim
Kean v Choo Khoon (1970) 1 MLJ 158 said, “a
cause of action normally accrues when there is
a person who can sue and another who can be
sued, and when all the facts have happened which
are material to be proved to entitle the plaintiff
to succeed.” In the law of contract, the cause of
action normally arises when terms of a contract
are breached; for example, when the project fails
to complete on time, or the contractor refuses to
comply with the instructions issued by the contract
administrator.
For claims initiated under the law of tort,
the limitation period is six years when a plaintiff
suffers damage due to the tortious act such
as negligence by the defendant. The six year
limitation period applies regardless of when the
plaintiff discovers such damage.
However strict interpretation of the said
provision may cause an injustice when the damage
was discovered only after six years. In Pirelli Cable
Works v Oscar (1983) 1 All ER 65, the chimney
was constructed in 1969 but the faulty condition
of the chimney could not have been discovered
with reasonable diligence and was only in fact
discovered in 1977. The court held that the cause
of action accrues at the date when the cracks on
the chimney occurred and not when the plaintiff
could diligently have discovered it. In this case, the
plaintiff’s action is time-barred as the date when
he discovered the crack was over the limitation
period of six years.
To address the injustice caused by this, the UK
has enacted the Latent Damage Act 1986 which
provides that where the cause of action could not
be discovered when it arose, the plaintiff can sue
within three years of the time when it could be
discovered.
New Section 6A
The amendment of the Limitation Act introduces a
new section 6A as follows:
“Limitation of actions to claim damages for
negligence not involving personal injuries
6A. (1) Notwithstanding subsection 6(1), this
section shall apply to any action for
damages for negligence not involving
personal injuries, where the starting
date for calculating the period of
limitation period under subsection (2)
falls after the date on which the cause
of action accrued.
(2) An action to which this section applies
shall not be brought after the expiration
of three years from the starting date if
the period of three years expires from
the starting date if the period of three
years expires later than the period of
limitation prescribed in subsection 6(1).
(3) Notwithstanding subsection (2), no
action shall be brought after the
expiration of fifteen years from the date
on which the cause of action accrued.
4) For the purposes of this section –
(a) “starting date” means the earliest
date on which the plaintiff or any
person in whom the cause of action
was vested before him first had both
the knowledge required for bringing an
action for damages in respect of the
relevant damage and a right to bring
such action;”
Therefore the new section 6A(1) enables a
person to take action founded on negligence not
involving personal injuries by allowing an extended
limitation period of three years from the date of
knowledge of the person having the cause of
action.
This proposed new section 6A considers
negligence cases involving latent damage in
construction cases, where the damage was not
discoverable through general inspection and that
the person having the cause of action did not
know or could not have been reasonably expected
to know of the damage.
It must first be noted that the six year limitation
period remains as the starting point. Section 6A
only applies to actions brought after the expiration
of the said six years, and where the claim is for
damages for negligence not involving personal
injury only. The limitation period for breach of the
contract remains at six years from the date of
cause of action arises.
In addition, such action must be brought within
three years from the “starting date” and is subject
to a longstop of 15 years. In this respect, the Act
is similar to the corresponding legislation in the
United Kingdom and Singapore.
Application of Sections 6A(1) and 6A(2)
The new sections 6A(1) and 6A(2) provide three
illustrations to explain the operation of this
section.
a. C bought a house from D in 2000. In 2010,
C discovered a crack which damaged the
walls badly. A building report made by a
consultant revealed that the cracks had
occurred in 2002, two years after C moved
into the house. C has three years from
2010 to file an action in court against D for
damages.
b. C bought a house from D in 2000. In 2006,
C discovered a crack which damaged the
walls badly. A building report made by a
consultant revealed that the cracks had
occurred in 2002, two years after C moved
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 ‟
INGENIEUR
Therefore, an engineer’s liability under tort of
negligence involving injury is now limited to a longstop
of 15 years.
into the house. C has three years from
2006 to file an action in court against D for
damages.
c. C bought a house from D in 2000. In 2005,
C discovered a crack which damaged the
walls badly. A building report made by a
consultant revealed that the cracks had
occurred in 2002, two years after C moved
into the house. C has three years from
2005 to file an action in court against D for
damages.
Limited to Negligent Cases
Read on its own, section 6A of the Limitation Act
is wide enough to cover all instances of negligence
involving injury. However there are some limitations
of the new section 6A.
The explanatory statement in the Bill initially
states that the provision is intended “to enable
a person to take action founded in negligence
not involving personal injuries by allowing an
extended limitation period of three years from the
date of knowledge of the person having the cause
of action.” However, it then goes on to explain
that the provision “considers negligence cases
involving latent damage in construction cases,
where the damage was not discoverable through
general inspection ...”
It appears from the above statement that
Parliament intends for section 6A to apply only to
latent damage in construction cases. There are
two grounds to support this contention.
Firstly, according to the Minister’s statement
in the Hansard of April 4, 2018, section 6A
“would permit a plaintiff to take action based on
negligence involving latent damage in construction
cases by extending the limitation period by three
years …”
Secondly, all three illustrations provided in
section 6A(2) to describe the operation of certain
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sub-sections are premised on construction
cases.
Therefore it remains to be seen whether
the Malaysian courts will apply section 6A to
negligence cases that do not involve latent defects
in construction cases.
Limited to 15 Years
Section 6A(3) provides as follows:
“Notwithstanding subsection (2), no action
shall be brought after the expiration of fifteen
years from the date on which the cause of action
accrued.”
Therefore section 6A(3) prevents any person
from instituting court proceedings more than 15
years after the cause of action accrued even if
it results in the extended limitation period being
less than three years or even though the damage
is discovered after 15 years.
Application of Section 6A(3)
The new section 6A(3) provides an illustration to
explain the operation of this section.
C bought a house from D in 2000. In 2017, C
discovered a crack which damaged the walls badly.
A building report made by a consultant revealed
that the cracks had occurred in 2001, one year
after C moved into the house. C cannot commence
an action because he has already exceeded the
fifteen-year limitation period.
Therefore, an engineer’s liability under tort
of negligence involving injury is now limited to a
longstop of 15 years. He does not have to worry
about a stale claim brought against him 15 years
or more from the date he designed the project.
With this amendment Malaysia is now in line
with the jurisprudence in Singapore and United
Kingdom on this issue.
Recent Federal Court
Decision on Liquidated
Damages Clauses
By Lam Wai Loon and Serene Hiew Mun Yi
Harold & Lam Partnership
T
he Malaysian Federal Court has recently,
in the case of Cubic Electronics Sdn Bhd
(in liquidation) v Mars Telecommunications
Sdn Bhd [2019] 2 CLJ 723 decided on the often
debated point of law relating to the application
and effect of liquidated damages clauses.
While this recent Federal Court decision does
not overrule the previous judgment of the Federal
Court in Selva Kumar a/l Murugiah v Thiagarajh
a/l Retnasamy [1995] 1 MLJ 817, the Federal
Court has certainly clarified the decision in Selva
Kumar in regard to the interpretation of Section 75
of the Contracts Act 1950.
BEFORE CUBIC ELECTRONICS
Prior to the Federal Court’s decision in Cubic
Electronics, the courts have consistently followed
the interpretation of Section 75 of the Contracts
Act 1950 as laid down in Selva Kumar, which held
(among others):
●● Although Section 75 of the Contracts Act
1950 provides that an innocent party
may receive reasonable compensation
‘whether or not actual damages or losses
are proved to have been caused thereby’,
the Federal Court held that those words
ought to be given a restricted construction.
As such, an innocent party who is claiming
for actual damages in an action for breach
of contract must prove actual damages/
losses or reasonable compensation in
accordance with the principles in Hadley v
Baxendale [1943-60] All ER Rep 461.
●● An exception to the above would be where
the court finds it difficult to assess the
COVER FEATURE
actual damages/losses as there is no
known measure of damages employable.
Nevertheless, the evidence ought to still
show some real loss which is not too
remote.
Due to the restricted interpretation in Selva
Kumar, even if an innocent party succeeds in
proving a breach of contract, the failure to prove
actual damages/losses will result in the refusal
of the court to award such damages. Even if the
contract contains a liquidated damages clause
which stipulates a sum to be paid in the event of
a breach, the innocent party will still have to prove
actual damage/loss.
The above position was also confirmed in the
Federal Court case of Johor Coastal Development
Sdn Bhd v Constrajaya Sdn Bhd [2009] 4 MLJ
445.
DECISION IN CUBIC ELECTRONICS
After more than 20 years since Selva Kumar, the
Federal Court has decided to adopt a more liberal
interpretation of Section 75 of the Contracts Act
1950, in line with the position taken in other
common law jurisdictions.
In Cubic Electronics, the issue before the
Federal Court was regarding forfeiture of a deposit
(as agreed liquidated damages). Nevertheless,
the Federal Court went on to clarify the law on
liquidated damages clauses under Section 75 of
the Contracts Act 1950:
●● As Section 75 of the Contracts Act 1950
allows the innocent party to reasonable
compensation ‘whether or not an actual
damage or loss is proved’; proof of an
21
 INGENIEUR
actual loss is not mandatory in order for the
court to award damages.
●● In the event the innocent party is able to
show a breach of contract and that the
contract contains a liquidated damages
clause, then the innocent party would be
entitled to reasonable compensation not
exceeding the sum stated in the clause.
●● The burden then shifts to the defaulting
party to show that the sum stated in the
liquidated damages clause is unreasonable.
A sum would be considered as unreasonable
compensation if it is extravagant and
unconscionable in amount in comparison
with the highest conceivable loss which
could possibly flow from the breach.
●● Even though proof of an actual loss
is not determinative of ‘reasonable
compensation’, evidence of an actual
loss would be useful as a starting point in
determining whether the compensation is
a reasonable one. There should not be a
significant difference between the damages
stipulated in the contract and the level of
loss/damage which is likely to be suffered
by the innocent party.
The Federal Court also clarified that if there
is a dispute as to what constitutes reasonable
compensation, the burden of proof lies with the
defaulting party to show that the damages clause
including the sum stated therein is unreasonable.
With this new Federal Court decision, it would
appear that an innocent party will have a higher
chance of receiving the stipulated sum in the
liquidated damages clause as compensation for
the breach of contract.
UNITED KINGDOM (UK)
While the Federal Court in Cubic Electronics
did refer to the UK Supreme Court’s position
in Cavendish Square Holding BV v Makdessi
[2015] UKSC 67 in determining what amounts to
‘reasonable compensation’, has the Malaysian
Federal Court truly adopted the position in
Cavendish? Before we conclude on that, we might
find it helpful to discuss briefly the position of
the law in the UK on the enforceability of penalty
clauses (liquidated damages clauses).
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Prior to the UK Supreme Court’s transformative
decision in Cavendish, it has traditionally been
accepted that the test for determining whether
a particular liquidated damages clause is in fact
an unenforceable penalty clause would depend
on whether the stipulated sum was a genuine
pre-estimate of the loss that could be caused
by the breach of the relevant primary obligation
(Dunlop Pneumatic Tyre Co Ltd v New Garage &
Motor Co [1914-15] All ER Rep 739). The Dunlop
approach was predicated on the assumption
that the sole purpose of a liquidated damages
clause is to compensate the innocent party for
losses arising from a breach of contract. Thus, the
liquidated damages provision in a contract would
be unenforceable if the amount stipulated was
“extravagant, exorbitant or unconscionable”.
Though there were some developments on
this area by the English courts thereafter, the UK
Supreme Court finally shed a new light on the law
on penalty clauses in the case of Cavendish. The
UK Supreme Court reformulated the approach
towards penalty clauses as follows:
●● The penalty rule applies only to secondary
obligations, i.e. obligations triggered by
a breach of contract. The rule does not
apply to primary obligations (i.e. obligations
imposed on each party to procure whatever
he has promised to do).
●● If the penalty rule applies, the court will
then consider whether the consequence
of a breach is out of all proportion or
“unconscionable” or “extravagant” having
regard to the legitimate interests of the
innocent party.
The Cavendish approach is certainly wider
than the Dunlop approach in that it allows for
consideration of contractual purposes beyond
the desire to recover compensation for a breach,
including but not limited to considerations of
commercial interests. This shift in position also
indicates the reluctance of the courts to interfere
with the parties’ freedom of contract, as well as to
give legal certainty to the operation of a damages
clause.
Coming back to the Malaysian position, whilst
the Federal Court did decide that the concept
of ‘legitimate interest’ and ‘proportionality’ as
enunciated in Cavendish would be relevant
in determining what amounts to ‘reasonable
compensation’ under Section 75 of the Contracts
Act 1950, the Federal Court did not in fact adopt
the test in its entirety for primary obligation and
secondary obligation. Although, it is important
to note that the first step in claiming under the
liquidated damages clause is to show that there is
a breach of contract.
OTHER COMMON LAW JURISDICTIONS
It is interesting to note that other neighbouring
common law jurisdictions, such as Singapore,
Australia and Hong Kong, have also not adopted
the Cavendish approach wholesale (except
Singapore as explained below).
Singapore
Since the UK Supreme Court decided in the
case of Cavendish, the Singapore courts have
considered and applied the same approach when
it comes to penalty rules or liquidated damages
clauses. This can be seen in cases such as iTronic
Holdings Pte Ltd v Tan Swee Leon [2016] SGHC 77
and Nanyang Medical Investments Pte Ltd v Kuek
Bak Kim Leslie and others [2018] SGHC 263.
However, in another Singapore High Court
case, Hon Chin Kong v Yip Fook Mun [2018] 3
SLR 534, the Court reverted to the Dunlop test
of genuine pre-estimate. The High Court took the
position that the Dunlop approach shall continue
to be law in Singapore, and that the Cavendish
approach is not applicable in Singapore.
Nevertheless, it is important to note that
in Hon Chin Kong, the High Court clarified that
the law of penalties (i.e. the Dunlop approach)
would not apply to true deposits, whereas it was
observed that the Cavendish approach may be
wide enough to apply to true deposits.
In another recent Singapore High Court
case, Seraya Energy Pte Ltd v Denka Advantech
Pte Ltd and another suit (YTL PowerSeraya
Pte Ltd, third party) [2019] SGHC 2, the Court
considered the “legitimate interest” approach in
Cavendish. However, the Court reaffirmed that it
is bound to apply the classic case of Dunlop on
the principles applicable to distinguish between
a provision for liquidated damages and one
imposing a penalty.
Having said that, the Singapore High Court
in Denka Advantech did refer to other Singapore
High Court cases that considered the UK Supreme
Court case of Cavendish. However, as at the
date of this article, there is no Singapore Court
of Appeal decision on this matter. Nevertheless,
the discussions on the Cavendish approach
seem to suggest that there is a slow but
growing acceptance of the Cavendish position in
Singapore.
Australia
The Australia courts similarly adopt the Dunlop
approach when determining whether a liquidated
damages clause is enforceable or should be
considered as a penalty.
In the High Court of Australia case Andrews
and others v Australia and New Zealand Banking
Group Ltd [2012] HCA 30, the Court held that
when the contract requires the payment of
compensation that is non-proportional to the pre-
estimated loss, the clause may be considered as
a penalty and thus is unenforceable.
The law of penalties was also considered in
the Federal Court of Australia case of Paciocco
v Australia and New Zealand Banking Group
Limited [2014] FCA 35. The Federal Court
similarly followed the Dunlop approach and held
that a stipulation (to pay a sum or other property)
will not constitute a penalty at law or in equity
unless it is ‘extravagant and unconscionable in
amount in comparison with the greatest loss
that could conceivably be proved’. Further,
the Federal Court clarified that whether a sum
stipulated is a penalty or liquidated damages is
to be determined upon the terms and inherent
circumstances of the contract, judged at the time
of making of the contract.
To assist further, the Federal Court also set out
some considerations which may be considered:
●● Whether the sum stipulated is extravagant
and unconscionable in amount in
comparison with the greatest loss that
could conceivably be proved.
●● Whether the breach consists only in not
paying a sum of money, and the sum
stipulated in the clause is a sum greater
than the sum which ought to have been
paid.
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 INGENIEUR
As the Australian courts have yet to consider
the case of Cavendish, it would be interesting to
see whether the Australian courts will depart from
the Dunlop approach.
Hong Kong
The issue relating to liquidated damages clause
was recently decided by the Hong Kong Court of
Appeal in the case of Brio Electronic Commerce
Ltd v Tradelink Electronic Commerce Ltd [2016]
HKEC 989. In this case, the contract in dispute
had a non-solicitation clause whereby parties
agreed not to ‘poach’ each other’s clients. The
contract further provided a sum of HK$5 million
as liquidated damages for the breach. In the
Court of Appeal, the defendant did not challenge
the finding that it was in breach of contract.
However, the defendant contended that the
term fixing damages at HK$5 million was not
an enforceable liquidated clause as it was not a
genuine pre-estimate of damages (following the
Dunlop approach).
In arguing its case, the defendant’s counsel
suggested that the Hong Kong Court of Appeal
follow the English Court of Appeal decision
in Murray v Leisureplay Plc [2005] EWCA Civ
963, which provided a step by step guide to the
questions the court should ask itself to determine
whether a clause is a penalty. In doing so, the
court would have to make a comparison between
the amount stipulated in the contract as payable
in the event of breach and the amount that would
be payable for such breach under common law.
Nevertheless, the Hong Kong Court of Appeal
took the view that the approach taken in Murray
was too rigid. In upholding the liquidated damages
clause, the Court of Appeal held, among others,
as follows:
●● A comparison, as suggested in the
English Court of Appeal case of Murray,
would remove one of the commercial
advantages that a liquidated damages
clause is recognised as achieving, i.e. the
dispensation with the need to adduce
evidence on damages and to calculate
them, particularly in cases where proof
of the amount of damages suffered may
be difficult to achieve to any degree of
precision.
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●● When considering whether a clause is valid
liquidated damages clause or a penalty,
one must consider the standpoint of the
parties at the time when they entered into
the contract.
●● Where a breach could have a range of
outcomes or consequences, a clause will
be held to be a penalty where the amount
stipulated is extravagant compared with
the greatest loss that could be proved
to flow from the breach. This approach
recognises that the consequence of a
breach may not be foreseen with precision
and hence, allows parties to stipulate a
sum representing adequate compensation
in the event of breach.
Although the case of Brio was decided
af ter the UK Supreme Cour t delivered its
decision in Cavendish, the Hong Kong Court of
Appeal did not take the opportunity to express
its views on Cavendish. It remains to be seen
whether the new test laid down in Cavendish
would be adopted by the Hong Kong courts in
the future.
CONCLUSION
Although the other neighbouring common law
jurisdictions have yet to align their laws on
penalties with the UK position in Cavendish, the
courts are certainly more reluctant to disturb
parties’ freedom to contract, especially in
commercial contracts.
As for Malaysia, the Federal Court decision
of Cubic Electronics has certainly provided some
clarification on the law on liquidated damages
clause. Parties therefore ought to ensure that
the amount stipulated in the liquidated damages
clause is a reasonable amount of compensation
for the breach.
Specifically for construction contracts, parties
should properly consider the genuine pre-estimate
of losses and the reasonable time for completion
of the works when agreeing on the liquidated
damages clause given that there is no longer a
requirement for the innocent party to prove actual
loss. We await further judicial guidance on the
application of these principles in construction
contracts.
Responsibility and
Accountability of
Stakeholders in the
Construction Industry
By Dato’ Ir. Fong Tian Yong
The Board of Engineers Malaysia recently prepared a Position Paper to identify issues and
weaknesses in the construction industry supply chain in respect of building failures and fatal site
accidents and proposed recommendations with a view to minimise such mishaps.
B
uilding failures and fatal site accidents
are common in the construction industry.
Construction site accidents account for
approximately 10% of the total accidents of workers
in general. The high profile case of the Highland
Tower collapse in 1993 and a series of landslides
claiming several lives prompted authorities to beef
up the Regulations and Guidelines on Hill Sites
and Highlands Development in 2010 that have
given more emphasis to the planning aspects of
hill slopes.
However, the recent spate of building failures
either during construction, occupation or demolition
has created great public concern with wide publicity
in the press. Structural collapse which does not
incur loss of life or physical injury may not be
noticed and can be easily remedied on site, but site
accidents involving life or injuries are of concern
to the public, and they are covered in this position
paper for review and recommendation.
With the wide negative publicity of
stakeholders involved in the construction
industry, even for minor events such as falling
ceilings or leaking roofs of a public building, the
Board of Engineers Malaysia (BEM) decided to
form a Working Group (WG) to study the whole
supply chain of the construction industry. The
study will look into the stages of development
and the stakeholders involved, the relevant laws
and policies related to them, possible causes of
failures and recommendations. Literature reviews
POSITION PAPER
will also be carried out on past cases of building
failure related to the above.
Working Group of Responsibility and
Accountability of stakeholders in
construction industry
The WG was headed by Dr Ir. Tan Yean Chin,
Chairman of Professional Practice Committee of
BEM, with representatives from the construction
industry consisting of KPKT, IEM, ACEM, CIDB,
PSDC, MBAM, DOSH, PAM, LAM and BEM.
As the scope for this subject is broad, the WG
decided to limit the scope to the following types
of failure:
Types of failure
a) Building failures of all public buildings
involving structures or services;
b) Building failures of other buildings/
structures involving life or injury to people
or an incident reported in the press;
c) Construction site accidents involving
personal injury or loss; and
d) Serviceability problems of public buildings
which create nuisance and interruption to
the users (internal piping burst, parliament
roof leaks etc).
25
 INGENIEUR
Stakeholders At each of these phases, different stakeholders
and different regulatory bodies are empowered
a) Developers/Project proponents under different applicable laws. This review
b) Planners will examine each of these phases to identify
c) Architects common or possible causes of building failures
d) Engineers or site accidents.
e) Contractors
f) Tradesmen
g) Site Supervisors Common/Possible Causes of Building
h) PTD (land officers). Failures or On-site Accidents

Supply Chain of the Construction
Industry
The supply chain of the construction industry
involves the following phases:
a) Development project inception,
b) Land conversion,
c) Planning approval,
d) Building plan approval (including
earthworks utilities/infra),
e) Procurement process,
f) Construction,
g) Building delivery (Certificate of Fitness
or CFO/Certificate of Completion and
Compliance or CCC),
h) Maintenance and management,
i) Periodical inspection, and
j) Demolition.
From literature reviews, past failures can be
attributed during any phase of supply chain of
property development to any of the stakeholders
stated above although the probability of
occurrence differs. For ease of documentation,
the causes of failure/incidence are categorised in
Figure 1.
Development Project Inception Stage
a) Project proponent carrying out structure work
without professional input within Local Authority
areas or outside Local Authority areas.
Street, Drainage and Building Act (SDBA) 1974
and the Uniform Building By-laws (UBBL) regulate
Local Authority areas whereas construction works
outside Local Authority areas are not within their
jurisdiction. In fact, many structures outside Local

Supply chain of
Stakeholders Responsible construction industry

●● Project conception ●● Developer / owner

●● Land conversion ●● Architect
●● Planning permission ●● Contractor
●● Building plan
●● Procurement BUILDING ●● Planner
Engineer
FAILURE
●●
●● Construction stage ●● Tradesmen
●● Building delivery (CFO/CCC) ●● Site Supervisor
●● Maintenance & Management ●● Land Officer
●● Periodical Inspection ●● Local Authority
●● Demolition

Figure 1

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Authority areas, such as rural village houses,
agriculture buildings (lately 3-4 storey swiftlets
houses), bridges, etc., were built without approval
from a Local Authority. As of 2010, only Perlis,
Kedah and Melaka had gazetted every inch of
their land under a Local Authority.
The recent collapse of a canopy bridge in Perak
in 2009 claiming three students’ lives while on
outdoor activities is one such case where a donor
appointed a contractor to build the canopy bridge
without input from a Professional Engineer (PE) or
plans submitted for Local Authority approval.
The landslide at the Cameron Highlands farm
in 2003 was due to the construction of ponds at
mid-slope by farmers without professional advice.
It would appear from these cases that project
proponents take things for granted relying on a
contractor’s experience or they follow examples of
what was built in other places without due regard
to the geotechnical conditions. The same can
happen in a house extension or renovation where
enforcement from a Local Authority is lacking.
There are also instances where developers
call the shots in deciding the final design or
construction method and overrule the consultant’s
recommendations in the development phase.
Some common problems are earth fills for low-
cost housing where the depth of the fill for each
compaction can be as little as a metre or so. The
Ministry of Housing has received many complaints
of such nature particularly for low-cost housing
because of the low profit margin when compared
with medium to high cost housing areas.
b) Short and unreasonable time lines to complete
complex structures
Several structure failures have been caused partly
because of the short time frame to complete the
project where intricate works have to be carried
out round the clock by same team of skilled and
unskilled workers and supervisors. The structural
failure of Sekolah Menengah Majidee Johor Bahru
in 1988 under the ‘Projek Segara’ was mainly due to
rushed works at the expense of proper site control
and monitoring. Classroom floor screeds were
dislodged when the school was opened for use.
Investigation showed some core samples of the slab
below 10 kN. Similarly, installation works, such as
space frames require concentration and attentive
effort. Errors in one component or member can
lead to undue stresses in other areas. Some local
stadium roof collapses are such examples.
Recommendation
a) Promote public awareness on the risks of
structural works without an engineer’s advice
through education, campaigns or village
leadership training since many of these
problems occur in rural areas. Pamphlets may
be produced similar to the types used in Hong
Kong to educate house owners living near hill
slopes with the risk of landslides.
b) Strengthen SDBA and UBBL to cover a wider
area outside Local Authority areas.
c) Stakeholders must insist on a reasonable time
line for project completion and avoid night
work with the same crew to avoid fatigue, loss
of concentration and ineffective supervision.
Land Conversion Stage
a) Land Offices approving development
applications without considering the geo-hazards
in particular areas especially farming activities
on hill slope areas
The Land Office with the authority to approve land
conversions is the first check point for the whole
property development approval process – land
conversion, planning approval, building plans, etc.
It is therefore very important that Land Offices
understand the risk implications of a site against
possible failures in relation to the geotechnical,
geological or environmental setting. The approval
of several property developments at Bukit
Antarabangsa by the Land Office even though it had
several unstable slopes, set in train several mishaps.
Recommendation
a) All land conversion applications on high hill
slopes and sensitive areas should have a
brief evaluation by a PE with the relevant
experience in geotechnical engineering on the
site’s suitability for the proposed development.
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 INGENIEUR
Planning Approval Stage
a) Approving plans with structures on unstable
ground hazard areas
Planning is about the arrangement of a built
environment. The planning authority is guided by the
Town and Country Planning Act and several Planning
Guidelines to evaluate planning submissions
prepared by town planners or architects for
approval. Again, some understanding of the site is
important as there are still projects being approved
at unsafe hill sites or ex-dump sites. Examples of
these are the recent Klang Valley bungalow project
on hill slope (steep slope with previous landslide
in 2008) and the Lembah Subang Flats and PPR
Apartment with the threat of methane gas arising
from a thick waste dump beneath the ground.
b) Approving a build environment on a flood prone
plain
Development projects on flood prone areas such
as Taman Sri Muda create social problems for
the residents and occupants. They also create
additional burden on the local Government which
has to install and maintain huge pumping facilities
to pump out floodwater on a periodical basis.
Recommendation
a) Planning authorities should be careful when
approving planning permission for new projects.
Where hill slopes or sensitive areas are involved,
for example ex-dump sites, wetlands and peat
soil areas, they should insist on comments from
PEs with relevant experience. Alternatively,
town planners submitting plans for planning
permission approval must attach an engineer’s
report on ground suitability for hill slopes or
sensitive areas.
Building Plan Approval Stage
a) Architects submitting building plans with
structural elements
Architects have been submitting building plans
with structural elements such as roof trusses,
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lintels or high walls while there is no clear line
drawn yet on the eligibility of architects and
engineers to submit plans for some structural
elements. The list of projects/components
issued jointly by the Board of Architects and
Board of Engineers places roof trusses under
List C, meaning both architects and engineers
can submit plans for these. The Streets, Drainage
and Building Act defines structural elements
as those components of a building that carry
moment and force. Although there is no reported
failure of short roof trusses for houses, the
long span roof truss is beyond an architect’s
competence. In the case of the timber roof truss
failures involving long spans and usage of splices
at a Kulim property development project, both
the architects and engineers tried to distant
themselves from the responsibility.
b) Incompetency of design engineers
There are several cases where design errors have
been detected during and after construction, such
as a trade centre in KL, a school project in Cheras,
a Government training centre building in Bangi, a
private college in Petaling Jaya, a linkway bridge
in Petaling Jaya, among others. In the case of two
Government projects, the design engineers had
only a few years’ experience and had just started
their Engineering Consultancy Practice (ECP)
when they obtained PE status. Error in design is a
common cause where wrong parameters are used
or wrong analyses are applied on a structure.
Some projects were awarded to consultants
without the required experience and resources to
undertake complex structures such as the space
frames for big complexes.
There are also cases discovered by BEM
Professional Practice Committee where electrical
engineers signed for civil and structure plans.
c) Insufficient soil investigation for geotechnical
related work
There have been cases where little or no sub-
surface investigation was conducted for structures
in a geotechnical setting. The retaining wall
failures at a Kulim housing project revealed the
absence of any soil investigation.
Recommendation
a) Review the joint list of project submissions for
architects and engineers as agreed by the two
professional boards, Board of Architects and
Board of Engineers, providing clear lines of
authority and responsibility between architects
and engineers in respect of designs involving
structural elements.
b) PEs must have a minimum number of years
of relevant experience (e.g. in engineering
consultancy services) before being allowed to
act as a Submitting Person for structural plans
to the Local Authority.
- select consultant based on Quality
Based Selection (QBS) process such as
International Federation of Consulting
Engineers’ (FIDIC) guidelines to ensure that
only competent consultants with relevant
experience are selected.
- Design of complex structures or
geotechnical works must be vetted by
accredited checkers registered with BEM.
c) Review UBBL to require submission of
structural plans to be accompanied by a
soil investigation and geotechnical report by
PEs with relevant geotechnical engineering
experience for works in a geotechnical setting.
d) Take stern action against any PEs who practice
beyond the field of engineering that they are
competent in.
Procurement Process Stage
a) Incompetent and inexperienced contractors
As contractors are the persons who actually carry
out the construction works, it is important that
they are qualified to handle the job depending on
its complexity. There are prevailing requirements
for the registration of contractors depending on
their classification by CIDB. However, in practice,
many contractors do not seem to possess the
necessary qualifications and experience as
evident by the number of structural failures due
to contractor negligence since the consulting
engineer cannot be on site full time.
Recommendation
a) Selection of contractor for complex works
should be based strictly on the contractor’s
experience, support of skilled technical staff
and financial standing.
b) Costing should be included into the
‘Preliminaries -’ of the contract for the cost
of ensuring safety and complying with the
provisions of the Occupational and Safety Act
514 (OSHA), Factory and Machinery, Act 139
and the Rules on requirements on Site Safety
Supervisors under Factories and Machinery
(Building Operators and Works of Engineering
Construction) (Safety) 1986.
Construction Stage
a) Incompetent Clerk of Works as a Site
Supervisor or Inspector of Works
A Clerk of Works (COW) was formerly engaged
for construction work to act on behalf of either
the consultant or contractor. There were several
cases of failures that were attributed to the
incompetency of supervisors. CIDB now registers
them as Site Supervisor (SS) and BEM registers
them as Inspector of Works (IOW). Since engineers
cannot be on site full time for most projects, it is
therefore important that an SS or IOW possesses
the right competency to undertake the task to
ensure structures are constructed according to
plans and engineering principles.
Some developers second their office staff who
might not be qualified to act as an IOW nor have
sufficient time for site supervision.
b) Insufficient Site Supervisors
It is common for Government projects to be
supervised by a skeleton strength of SSs. The case
of structural failures at SM Majidee Johor Bahru
in 1988 points to the lack of supervision where a
technician had to supervise four schools under the
‘Projek Segara‘ scheme and concreting was allowed
at night. During the investigation by JKR HQ, for a
similar project across the Causeway, a Jurong Town
Corporation housing flats in Jurong had allocated
four technicians for a single project.
29
 INGENIEUR
c) Temporary works overseen by an incompetent
contractor/supervisor or without an engineer’s
input for works involving structural inputs
Temporary works failures such as temporary
retaining structures for a deep trench or basement
excavation, struts, formworks, scaffolding,
catch platforms, cranes, etc., are common on
construction sites. Contractors tend to take
the easy way out since it is not part of the final
product. Many of these are performed without an
engineer’s input and are based on the contractor’s
experience on a trial and error basis. A few cases of
trench cave-ins claiming the lives of construction
workers prompted DOSH to produce guidelines on
work safety for trenching works.
d) Removal of consultants’ scope of service in the
construction stage
By-law 5 of UBBL stipulates that no erection
of building can proceed unless the Submitting
Person (the PE who submitted the structure plan)
undertakes the supervision of that building.
However, some Government agencies and
developers remove the scope of services in the
construction stage from the consultants and take
over the role of site supervision or involve only
the minimum services of the consultants.
e) Contractor’s fraudulent acts resulting in inferior
products/unsafe construction
There are many cases of contractors who cheat
on materials and compromise on workmanship.
This can result in weaker concrete strength
and durability, less stable structures, regular
breakdown of building services, water seepage on
walls and floors, etc.
f) Inferior quality of building materials used
A few cases have been highlighted in the media
that relate to inferior building materials being
used. For example, incidents of pipe bursts at
newly completed Government buildings. One of
the buildings had an incompatible end piece of
PVC pipes that gave way when the main pipes
were under pressure, thus flooding the floor and
damaging the ceiling.
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g) Incompetent or inexperienced tradesmen
engaged on site
Incompetent tradesmen are also contributors
to minor failures in buildings such as piping,
wiring, sanitary plumbing, waterproofing. The
current system of registration of tradesmen
by CIDB is good but more often than not, many
construction works are being sub-contracted to
other unregistered tradesmen who may not have
the basic knowledge of the trade and are also not
directly responsible to the main client. In the case
of a housing project in Kuala Lumpur, excessive
leakage occurred in the plumbing system in
about 30 houses in various areas of the houses
as the plumbers did not consider the fact that a
booster pump was installed at every house by the
developer. The same problem happened in a newly
completed building in Kuala Lumpur where a non-
compatible end-piece was connected to a piping
system.
h) Lack of safety measures on site
The standard of safety measures on site including
that of the employment of a competent safety
officer is often not on the priority list of the
contractor. It is also an area where cost cutting
tends to be exploited. Some site accidents can
be traced to the lack of basic safety provisions for
necessary safety equipment.
Recommendation
a) Set a minimum ratio (e.g. number of personnel)
of SS against the size and complexity of the
projects and define the category of the SS
required.
b) Review existing guidelines on temporary works
in respect to structural stability and hazards to
the public. Identify any gaps in the guidelines
and enhance enforcement.
c) Make key personnel of all contractors (e.g.
directors, key important posts) personally
responsible and punishable through
amendments to the CIDB Act or other
regulations on negligence and fraudulent acts
resulting in inferior products (e.g. cheating,
 bad workmanship, defective or inferior quality
materials used, negligence, etc.)
Building Delivery (CFO/CCC) Stage
a) Certifying without checking/visiting the project
There have been a number of complaints from
Local Authorities that the Submitting Person who
signed the Form E for the application of a CFO had
done so without visiting the site and some did
not even know the location of the site for small
projects in rural areas.
The case of the structural failure of
Government housing flats (a prefab system from
a Korean company) is an example where the
local consultant certified Form E without active
involvement in the project.
Recommendation
a) Regular reminders to PEs on their responsibility
and accountability when certifying works and
publicise cases in BEM publications or press
conferences by the BEM/Minister.
b ) Take stern action against PEs who do not act
professionally or ethically.
c ) The contractor’s column in all Form Gs where
contractor column appears, must be signed
by the contractor’s company director and the
site manager jointly.
d) Take stern action against individuals (e.g.
directors and site/project managers) of
contracting companies that act irresponsibly
or fraudulently.
Extension and Renovation Works
a) Performing extension or renovation works
without checking on design capacity of structure
This is a common feature whereby an owner
renovates a structure without the engagement
of an engineer to check against its carrying
capacity due to additional loading. Certain internal
renovations need not require approval from a Local
Authority even if it involves extensive material
change and it is not noticeable to authority.
Examples of such failures are the Singapore
New World Hotel collapse in 1986 and Korea’s
Sampoong building in 1995, where changes to the
use of the buildings introduced extra loading due
to air conditioner units, water tanks, exterior tiling,
raised floors, etc.
Recommendation
a) Strengthen UBBL to make it a requirement to
submit structural plans to the Local Authority
for endorsement of any renovation that incurs
extra loading. This will imply the engagement
of an engineer as only a PE can sign on the
structure plan. Since it is only to deposit the
plan with Local Authority, it does not impose
any bureaucracy in the process.
Maintenance and Management Stage
a) Incompetent technical personnel handling
refurbishment and or repair structural works
Repair or refurbishment works are of ten
overlo oke d from the s truc tur al s afet y
aspect whereby works are often carried out
by incompetent supervisors or left to the
contractors themselves. In the case of the
Johor Bahru Lumba Kuda 16-storey flats’ roof, a
500,000 litre pressed steel water tank collapsed
in 1993 killing a youth and damaging several
cars, and residents were forced to move out for
a day. Although the tank was just repaired by
replacing new struts, the corroded cleats joining
the strut and the tank plate were not replaced.
Hacking and re-joining the struts and the plate
made the joints weaker and they failed two
weeks after the completion of the repair. The
technical assistant, as the most senior technical
officer from Jabatan Perumahan Negeri had no
proper training or experience to pre-empt such
risk and relied upon contractor’s experience to
do a proper job.
Recommendation
a) Repair of structural elements should be
managed by qualified technical personnel. For
complicated structures or slopes, PEs must be
31
 INGENIEUR
engaged. Since incidences of such nature affect
mainly complexes or big buildings, owners and
the managing team should be educated on this
risk as part of their work manual.
Periodical Inspection Stage
a) Failure to perform periodical inspection of a
building by the owner
Buildings deteriorate over the span of their life
time. Corrosion affects reinforcements due to
carbonation or concrete cracking and reduces the
structural capacity of the building as it ages. On
top of this, incremental overloading of the building
due to change of use on certain floors can have a
detrimental effect on the building’s integrity. Such
incremental threats need to be identified and
remedied. Section 85A of the Street, Drainage
and Building Act 1974 provides for mandatory
inspections of buildings more than five storeys
every ten years. However, the Act requires the
Local Authority to issue a notice to owners of
these buildings and most of them hardly do so.
Owners take advantage of this and consequently,
very few building owners perform such a task as
it is perceived as an additional financial burden.
Should another building collapse due to same
cause as mentioned above, fingers will again be
pointing at stakeholders.
Recommendation
a) Governments, especially State Governments
should issue instructions to all Local Authorities
to ensure notices are sent to all building owners
to observe this rule. Alternatively, Act 133
can be amended to make it mandatory for
the owners of buildings to perform periodical
inspection by PEs according to the guidelines
drawn up by the Ministry of Housing and
Local Government. (Guidelines on Periodical
Inspection of Building issued by Ministry of
Housing & Local Government 1996).
Demolition Stage
a) Demolition done by contractors without
understanding the structural behaviour of a
building’s structure
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This is a common practice where the demolition
of structures, especially low rise, contractors and
workers pay little attention to the safety aspects of
workers and the public. Structural components are
demolished based on operational convenience.
In the recent case of the collapse of some Ipoh
shophouses during demolition killing two passers-
by in 2009, the demolition sequence was wrongly
performed. The contractor started demolishing
the shophouses from the back leaving the front of
the shops which faced the street unprotected. As
demolition reached the front, the cantilever action
of the cantilevered balconies of the buildings
together with some stacked tiles suddenly tilted
the shell of the buildings towards the street and it
fell on three passing cars killing two people.
b) Demolition contractors submitting standard
method statements without understanding the
structural behaviour of structure
Contractors demolishing buildings have been
using the same standard method statement
to satisfy the Local Authority and DOSH as the
rule requires them to submit such a document
before commencing demolition work. Contractors
may not follow what is stated in the method
statement.
In 2009 alone, there were two building
demolition sites where a sudden building collapse
caused fatalities.
Recommendation
a) Method statement must be signed by a PE
which is then submitted to DOSH and he must
undertake the supervision of the demolition of
critical parts of the structure.
Analysis of Stakeholders’ Exposure to
Causes of Building Failure and their
Frequency
It would appear that contractors have the highest
number of exposures to causes of building failure
that occur along the supply chain with 16 (67%)
followed by Engineers with 10 (42%) based on 24
identified possible causes. (Some causes may
have more than one stakeholder). See Table 1 and
Chart 1.
Frequency of stakeholders’ exposure to
stated causes of building failure
In terms of frequency of exposure to building
failures, the number of such causes under the
categories of high, medium and low is as follows:
High : 6
Medium : 38
Low : 11
The majority of the identified causes of failure
are in the medium range of frequency of possible
occurrences comprising 69% of the total. Of these,
contractors have the highest exposure rate (16),
followed by engineers (10), developers (9), and
supervisors (6). As such, more attention should be
placed with these four categories of stakeholders
to minimise building failure or mishaps on site.
See Table 2 and Charts 2 and 3.
Legislation regulating the various phases
along the construction supply chain in
relation to causes of building failure
Generally, the regulating authorities have limited
resources to inspect every detail and even if
this is done, there is no guarantee that mishaps
will not happen. The Local Authorities’ technical
personnel are generally not conversant with
the requirements of design codes and work
specifications. In fact, most of their professional
staff are not registered with the regulatory
boards. The primary function of regulatory
staff is to ensure compliance with procedures
and policies of the Government. In fact, the
Governmental trend now is shifting towards
self-regulation where a bigger burden will be
imposed upon the professional consultant to

Stakeholder No. of exposures As % of total

Contractor (Cr) 16 67
Engineer (Ir) 10 42
Developer (Dv) 9 37
Supervisor (Ss) 6 25
Architect (Ar) 4 17
Local authority (La) 3 13
Pentadbir Tanah (PT) 3 13
Planner (Pl) 2 8
Other agencies (Oa) 2 8

Table 1: Stakeholder’ exposures to causes of building failure that occur along the supply chain

Dv Cr Ar Ir Ss PT La Pl Oa Total %
H 2 1 1 0 0 0 1 0 1 6 11
M 4 15 2 6 6 2 1 1 1 38 69
L 3 0 1 4 0 1 1 1 0 11 20
Total 9 16 4 10 6 3 3 2 2 55

Table 2: Frequency of stakeholders’ exposure to stated causes of

building failure (H-high, M-medium, L –Low)

33
 INGENIEUR

80
70
60
50
no of exposure
40
as % of total
30
20
10
0
or

ah
r

r
er
or

y
pe

ct

ne
r it
is
ct

ne

an
ite
lo

an
ho
rv
ra

gi

ch
ve

rT
pe
nt

Pl
ut
En

Ar
De

bi
la
Co

Su

ad
ca

nt
Lo

Pe Chart 1: Stakeholders’ exposure to causes of building failure

by that occur along the supply chain (as % of total)

Total number of identified exposures that caused building failures: 24

High
Medium
Low

Chart 2: Frequency of stakeholders’ exposure to stated causes of building failure

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16

14

12

10
H
8 M
L
6

0
Dv Cr Ar Ir Ss PT La Pl Oa

60

50

40 H
M
30
L
20 Total

10

0
T
v

Ir
r

al
a
La
s

l
C

P
D

O
S

ot
T

Chart 3: Frequency of stakeholders exposure to stated causes of building failure

35
 INGENIEUR

Item Property Development Supply Chain

a Land conversion National Land Code, Act 56

b Planning permission Town and Country Planning Act, (Act 172)

c Building plan approval Street, Drainage and Building Act (Act 133), UBBL,
Earthworks By-Laws,
Electricity Supply Act,
Water Service Act,
Sewerage Service Act,
Solid Waste Management & Public Cleansing Act,
Telecommunication Act,
Fire Service Act,
d Procurement Contract Act 1950
e Construction Act 133, UBBL,
E/works bylaws,
OSHA, CIDB
f Building delivery Act 133, UBBL
g Extension & renovation Act 133, UBBL,
works Act 172,
Fire Service Act
h Periodical Inspection Act 133, UBBL
i Demolition Act 133, OSHA

Table 3 - Legislations regulating the various phases along the property development supply chain

carry the accountability and responsibility since
the Street, Drainage and Building Act as the main
Act governing the construction works and the
Interpretation Act, Act 388 provides indemnity to
Government bodies and its officers against any
liability thereof. See Table 3.
Responsibility and accountability of
stakeholders
In view of the higher expectation of professionals
on work quality and compliance, self-regulating
mechanisms were introduced, such as the CCC,
where architects and engineers have been given
the authority to issue CCCs (which was formerly
the sole authority of the Local Authority). So now
all stakeholders, especially professionals must
adhere to a level of professionalism to gain public
confidence on the safety and health aspects of
the construction industry.
There must be a consolidated effort among
stakeholders to reduce the frequency of mishaps
in the construction industry in order to restore
the confidence of the public locally and abroad.
The Straits Times editorial on the June 4, 2009
headlined “The Collapse of Professionalism”,
calling professionals in the Building industry to
step up and act on any failure in carrying out their
duties with due care and diligence in accordance
within the laws and ethics that govern their
profession, is a wake-up call to stakeholders to
take measures to improve the situation. With the
liberalisation of service sectors within the ASEAN
region particularly for professionals, there is a more
urgent need to improve the professionalism of our
local professionals if we are to face the competition
from the regional players amongst the 580 million
strong ASEAN communities. Meanwhile, it is also
important to prevent sub-standard professionals
from the ASEAN community practicing in Malaysia
where public safety is of paramount concern.

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A Strategic Plan to minimise/mitigate
building failures
In view of the sizeable number of identified possible
causes of building failures and mishaps in the
construction industry based on statistical records, the
WG has decided to focus on the causes with higher
frequency and higher tendency as a priority area while
the others are placed as longer term goals.
The strategic plan covers seven sections:
1. General awareness of construction/
building safety
2. Strengthening role of regulating authorities
especially Local Authorities
3. Ensuring quality and independence of
Engineers
4. Upgrading competency of Site Supervisors/
Inspector of Works
5. Review the Code of Ethics for professionals
6. Clearer delineation of responsibility to
produce certain ‘structural’ drawings by by
architects and engineers
7. Enhance the accountability of contractors
General awareness of construction/
building safety
Since many of the causes of construction
failures can be traced back to non-professional
stakeholders such as owners, developers, land
officers, planners, occupiers and even financiers,
it is therefore important than these non-
professional stakeholders are fully aware of the
prevailing regulations in place and understand
the risks associated with construction works.
With this in place, land officers will be careful
when approving land conversion for sites with
adverse geotechnical conditions, ex-dump sites or
sensitive ground. Private projects will have to seek
professional input before putting up structures
even if they are minor in nature such as small
bridges, etc. Extension works to existing buildings
especially houses should seek engineer’s input.
The WG recommends the following general
awareness action plan:
a. Publicity through circulation of pamphlets
on the risk of building failures;
b. Make publicity easily available to
professional associations, CSR (Corporate
Social Responsibility) service counters
as practised in Hong Kong, to provide
technical advice.
Strengthening the role of regulating
authorities especially Local Authorities
Since several projects’ failures are traced to
incompetency of engineers as Submitting Persons
due to insufficient experience in a specific field,
local Government should insist on checking
by an accredited checker as provided for in the
Street, Drainage and Building Act, Act 133 for
certain categories of buildings based on the
height, complexity and geotechnical setting.
Act 133 should be amended to strengthen this
requirement as the current provision is only limited
to projects during the course of construction and
much discretion is left to the Local Authority.
Meanwhile, the Local Authority’s engineers should
be trained and updated with the latest technology
since they are the ones receiving and endorsing
the consulting engineers design drawings.
WG recommends the following:
a) To amend the Street, Drainage and
Building Act, Act 133 and UBBL to make
it mandatory for the developer/owner to
appoint an accredited checker for the
categories of property development based
on the size and complexity of the project.
b) Local authority engineers to undergo
mandatory training courses every two
years to update them on new technological
practices and codes of practice in
structural and geotechnical works.
Ensuring quality and independence of
Engineers
Of the 18,054 PEs registered by BEM as of
December 31, 2017, 10,425 were registered
as PEPC (Profe s sional Engineer with a
Practicing Certificate) involved in Engineering
Consultancy Practices (ECP) while the rest
37
 INGENIEUR
were involved in various capacities related to
engineering practices. A total of 3,602 ECPs
were registered to provide engineering services
to clients. The current system of becoming a
consultant engineer with a minimum of four
years of experience after graduation should be
reviewed. Many new consultants lack sufficient
experience and knowledge of the regulations in
force on safety aspects of construction.
WG recommends the following:
a. All potential candidates sitting for a
professional examination must be pre-
qualified on prevailing regulations related
to safety of building such as UBBL, Act
133, OSHA, etc.
b. Remind all PEs to practice only in the field
of engineering that they are competent and
possessing the relevant experience. This
also applies for PEs seeking procurement
of engineering consultancy services.
c. All payment of professional fees to be
paid directly to the Professional Boards as
stakeholder similar to the practice by the
Board of Surveyors for cadastral surveys to
enhance professional independence of PEs
with their client.
Upgrading competency of supervisors
Site Supervisors or Inspector of Works as the
persons directly supervising construction works
full time should be more accountable apart from
just registering them. The level of expertise should
be specified according to the size and complexity
of the project.
WG recommends the following:
a) To specify that all local ‘Standard Forms of
Contract’ specify the number and level of
qualification of the supervisors needed to
act for the consultants.
b) To amend UBBL on all Form Gs except G1 to
require the relevant supervisor to sign the
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relevant Form Gs that he has supervised
the project and that he takes responsibility
for the portion of works he is connected
with.
Review Code of Ethics of Professionals
Professionals should act in the public interest and
not be in collusion with developer for individual
interests at the expense of the public. Developers
as the paymaster do sometimes exert influence
over the professionals to act unprofessionally as
has happened in some housing projects such
as over-certification for progress payments or
certifying beyond their authority.
WG recommends the following:
a) All payments to professionals to be paid
directly to the Professional Boards as
stakeholder similar to the practice by the
Board of Surveyors for cadastral survey.
b) BEM to review their procedure of
Disciplinary Action against defaulting
engineers including guidelines and
regulations in a more effective manner.
Clearer delineation of responsibility of
certain ‘structural’ drawings by
architects and engineers
The joint circular between BEM and BAM on
the rights to submit Building Plans should be
reviewed as “Appendix C” (common list jointly
issued by LJM and LAM) contain few structures
with structural elements. “Structural element”
is well defined in the Street, Drainage and
Building Act i.e. “structural elements means
those parts or elements of a building which
resist forces and moments and includes
foundations, beams, columns, shear cores,
slabs, roof trusses, staircases, load bearing
walls and all other elements designed to resist
forces and moments but excludes doors,
windows and non-load bearing walls”. There
was a case where both the architect and
engineer denied responsibility when timber

roof trusses failed in a shophouse project in
Kulim.
WG recommends the following:
a) A declaration from both the Boards
that any drawing submitted to the Local
Authority with structural element would be
the responsibility of any of the Submitting
Person concerned unless the note of
‘to engineering details’ is stated by the
architect.
b) The two Boards review the three
appendixes (Joint BEM/LAM Memorandum
List) on the authority to submit building
plans.
Action Plan
Taking cognisance of the various prevailing
policies, legislation, guidelines and individual
Construction site of a new property development
agency’s action plans, the above recommendations
would require consensus and engagement
from all stakeholders to ensure success in
the implementation stage. Feedback from the
construction industry practising at the ground level
is equally important to gauge the effectiveness of
the proposed recommendations.
Conclusion
The local construction industry fraternity is
recovering from bad publicity due to the recent
spate of building failures that are of equal concern
to the public and Government. There is therefore
an urgent call to beef up the professional
standing of our stakeholders in order to regain the
confidence of the public and potential customers.
In the light of the liberalisation of engineering
services, it is even more urgent to improve the
professional standing of local stakeholders
responsible for the safety of local property
development.
39
 Where Engineers Excel THE
ING JANU
ARY- VOL. KD

ENI
MA
RCH 6
2015 1
NP
KDN PP 11720/4/2013 (032270)
L E M B AG A J U R U TE R A M A L AY S I A
P1
B OA RD OF E NGINE E RS MA LAY S IA
17

INGENIEUR
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The Board of Engineers Malaysia (BEM),

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formed in 1972, is a statutory body

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M A G A Z I N E O F T H E B O A R D O F E N G I N E E R S M A L A Y S I A O EN U T
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constituted under the Registration ofof

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Engineers Act 1967. BEM falls within the

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ambit of responsibility of the Minister of of

Works. Its primary role is to facilitate the
CAPACITY
registration of engineers and regulate the the BUILDING
professional conduct and practice of
registered engineers in order to
safeguard the safety and interest of of the
the
public.
ingenieur 2015 July-FA.indd 1 7/31/15 8:46 PM

The content in this magazine, written mainly

Under BEM’s registration record are by the engineering community and
19,000 Professional Engineers and
15,000 technical professionals, provides first-hand
119,000Graduate
71,000 GraduateEngineers
Engineersininvarious
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Published quarterly by BEM, The Ingenieur,
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41
 INGENIEUR

Strategies to Promote
Energy Efficiency in
Industries
By Ir. Dr K S Kannan
FEATURE

ISI Ventures Sdn Bhd

UTM, Kuala Lumpur

F
rom an energy policy maker’s perspective,
industry – as every other target group – has
to be considered as a customer. If industry
does not realise energy savings, then the current
tools/instruments have to be considered a failure.
Effective tools/instruments have to be customer-
focused and -tailored. Therefore, they can be
defined by the following characteristics:
●● they reach the customer,
●● they draw the attention of the customer,
●● they convince the customer to act (decide
to realise energy savings), and
●● they make the customer repeat effective
actions (continued energy savings)
How to reach industry
The best channels to “carry” energy efficiency to
industry are possibly provided by using the “day-
to-day” business relations of a company, the
industry’s own network (stakeholders, see Figure
1). By feeding the energy efficiency message
effectively through these channels, the energy
issue can be integrated into the industry’s existing
business procedures. Additionally, we have to
know much more about our customer. Is the
company big or small, energy intensive or not?
Does it work on a transnational basis or on a
regional/local level?

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 Suppliers
Banks, Insurance , Utilities
Companies

Technology core Service

New investments business Financial Pressure
Service

Market pressure
ESCOs,
Competitors Consultants

The Company Know How Transfer

Legal Pressure Policy

Taxes

Customers Industrial
Authorities Associations

Figure 1: Industry Stakeholders

Figure 1: Industry Stakeholders

Best Practice
Information on technologies & new/EE technologies
Multiplicator E.g for Outsourcing Financing, DSM,
new plants
Contracting
Banks, Insurance ,
Suppliers
Companies
Utilities

Benchmarking Energy Audits, M & T,

Energy Management

Demo projects ESCOs,

Consultants
Competitors

Comparison of
The Company
Energy Indicators

Customers
Industrial Training
Associations
Environmental Schemes, Authorities
Kyoto Protocol

Taxes, directives, laws , regulations, standards

Mandatory Voluntary
Schemes Agreements

Figure 2: Instruments for Energy Efficiency And Their Channels

Figure 2: Instruments for Energy Efficiency and their Channels

43
 INGENIEUR
How to attract industry’s attention
In order attract a company’s attention, we have to
understand its structure and internal relationships,
it cannot be a black box. Who is the owner? Is it led
by an effective management team and are staff
assigned work in support of the owner’s vision?
If we reach the company we might have to deal
with financial managers as well as site managers,
with technical as well as with marketing people.
Thus, depending on their respective professional
backgrounds and education, very different drivers
will attract their attention. These drivers can come
from inside the company as well as from outside.
Internal drivers for energy efficiency
These can be situational factors, e.g. all kinds of
problems affecting the core business (problems
with quality, processes, production, resources) or
opportunities (end of technical lifetime, extension
of production, new buildings, new products, new
personnel). They present a situation in which a
company might have to invest. In that case why
not link energy efficiency to it?
External drivers for energy efficiency
These include all kinds of pressures (financial,
legal, market) but also incentives (subsidies,
awards) or positive examples (from suppliers,
other companies, planners etc). With pressure a
company has to act, while successful examples
can provide an impetus for imitation.
In most cases these drivers present situations
which involve at least one of the stakeholders,
Money related factors
Profitability
Productivity
Stock market reaction
Cost effectiveness, etc.
Factors affecting the core business
Product innovation and quality
Procurement
Process reliability
Outsourcing, etc.
Table 1: Critical success factors for industrial management
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e.g. when facing a technical problem, a company
has to contact a supplier for new technology,
maybe a bank for money and a consultant to
give support. These business contacts can be
used as a “carrier” for energy efficiency. Figure 2
indicates the services that can be provided by the
stakeholders.
How to make industry act?
Whether energy efficiency measures are realised
by a company (or not), it is in the end decided
by the owner and the management team. Some
critical success factors (CSFs) required to satisfy
the crucial needs of the management are shown
in Table 1 below.
Some of these CSFs are relevant when
considering the interaction between the company
and its stakeholders (see Figure 1) and effective
tools have to involve at least one or more of these
issues.
Effective tools/instruments for industrial
energy efficiency
Using our knowledge about how to address
the industry’s CSFs and how to attract their
attention, we can try to identify effective tools
and instruments to increase industrial energy
efficiency. Preferably these tools or instruments
should act via the company’s own networks, trying
to integrate energy efficiency into their existing
Customer focused factors
Customer loyalty
Image (incl. environment), etc.
Management related factors
Risk/quality management
Human resources (health, security)
Policy and strategy
Information/Data management, etc.
 Mandatory/Legal
Standards/labels
Directives, regulations
Taxes, etc.
Voluntary
Long term agreements
Environmental schemes (ISO 14000)
Benchmarking (also awareness), etc.
Tools to identify, monitor, evaluate
Monitoring & Targeting (M&T)
Energy management
Energy audits, etc.
Table 2: Groups of effective tools/instruments
day-to-day business relationships. In Figure 2,
such tools/instruments are indicated, showing
also which channels might be used to reach the
target group. In Table 2, these tools/instruments
are grouped according to their main features.
Strategies to be adopted
1. Extensive awareness campaigns
(Agencies responsible: SEDA, GreenTech
Malaysia, ST, FMM, Industry associations)
a. To conduct general awareness campaigns
on EE (energ y ef ficiency) and RE
(renewable energy) throughout Malaysia
for all categories of consumers – students
(schools and higher institutions of
learning), housewives, general public and
Government officials.
b. GreenTech Malaysia to conduct awareness
campaigns in co-ordination with FMM
and industry associations to industry
and commercial building owners/tenants
throughout Malaysia focusing on EE
opportunities and technologies.
Awareness oriented
Targeted information, networking
Education and Training
Conferences, workshops, campaigns, etc.
Service oriented
Third Party Financing/contracting
Outsourcing
Demand side management, etc.
Others
Co-operative procurement
Tools to improve working conditions, etc.
2. Free energy audits to identify energy
efficiency opportunities
(Agencies responsible: GreenTech Malaysia,
SEDA, SME Corp)
c. SEDA to conduct free energy audits for the
commercial sector and industry to identify
energy efficiency opportunities. Detailed/
Investment Grade audits to be conducted
by industry with/without help from Energy
Service Companies (ESCOs). Government
to maintain energy audit team at SEDA for
this purpose.
3. Benchmarking
(Agencies responsible: GreenTech Malaysia,
NPC, SME Corp, FMM, MIDA)
a. GreenTech Malaysia in collaboration
with NPC to activate an e-benchmarking
programme.
b. FMM to co-operate with SME Corp to
encourage companies to participate in
e-benchmarking programmes.
c. GreenTech Malaysia to liaise with MIDA,
Department of Statistics to obtain data for
benchmarking through their survey forms.
45
 INGENIEUR
4. Availability of funds for energy efficiency
projects in industry Acronyms
(Agencies responsible; EPU, Banks/
Financial institutions, MESTECC) EPU Economic Planning Unit
(Energy section)
a. EPU to establish an EE Fund to be operated
by designated banks/financial institutions. FMM Federation of Malaysian
b. Source of funds from allocation, cess or Manufacturers
energy tax MESTECC Ministry of Energy,
c. Banks/financial institutions to provide Science, Technology,
loans to industries upon recommendation Environment and Climate
by SEDA/GreenTech Malaysia Change

5. Energy labelling/standards/best practices

(Agencies responsible: ST, SIRIM,
GreenTech Malaysia, FMM and consumer
associations)
a. ST, in collaboration with SIRIM, to promote
standards and rating/labelling systems for
domestic refrigerators, air-conditioners and
electric motors.
b. GreenTech Malaysia to promote labelling
systems and best practices (e.g. for boilers)
to industries (with FMM) and consumers
(with consumer associations).
6. Demand side management by utilities
(Agencies responsible: ST, TNB, Gas
Malaysia)
a. Promotion of co-generation (combined
heat and power) to be intensively promoted
with TNB, reducing stand-by and related
charges; Gas Malaysia entering into long-
term contracts.
b. Supply of high efficiency equipment (e.g.
motors less than 10 kW, lighting fixtures)
to industries.
c. TNB to encourage energy efficient practices
by replacing existing motors (less than 10
kW) and lighting fixtures in industry with
high efficiency equipment.
7. Legislative support
(Agencies responsible: EPU, ST, MESTECC)
a. Energy managers - Efficient Management
of Electrical Energy Regulations requiring
larger industries to utilise the services of
MIDA Malaysian Investment
Development Authority
NPC National Productivity
Corporation–
SEDA Sustainable Energy
Development Authority
ST Suruhanjaya Tenaga
(Energy Commission)
TNB Tenaga Nasional Berhad
registered energy managers and certified
energy auditors to be widely enforced.
Energy managers can be used to regulate
the system used for reporting energy
consumption data, specific energy indices,
and production and energy demand
forecasts to the relevant authorities.
b. Mandatory energy audits, in the form of
walk-through audits, are essential for
the industrial sector to have a better
understanding of the current status of end-
use energy efficiency. A walk-through audit is
a basic and cost-effective exercise to identify
opportunities for energy cost savings.
c. Fiscal policies to provide incentives may
include: import or sales tax exemption
for energ y- efficient equipment and
energy efficiency services, accelerated
depreciation, grants and the establishment
of investment bank lending criteria to
promote energy efficiency.
For existing incentives, simplified
implementation guidelines should be drawn
up and made available.

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Energy Performance
Contract in Malaysia and
Other Countries
By Ir. Dr Goh Hui Hwang, IPM Professional Service Sdn Bhd
Dr Chai Chang Saar, University of Reading Malaysia
Dr Goh Kai Chen, Universiti Tun Hussein Onn Malaysia
M
inister of Energy, Green Technology,
Science, Climate Change and Environment
Yeo Bee Yin said that various approaches
are being taken by the Government to promote
energy efficiency, among which include 50
Government buildings being retrofitted with energy
efficient lighting and appliances by next year
through Energy Performance Contracts, drafting
the Energy Efficiency and Conservation Act, and
reviewing the National Energy Efficiency Action
Plan 2016-2025.
An Energy Performance Contract (EPC) is
a mechanism that uses market-based capital
and technology to improve energy efficiency
in buildings, industry, and other areas. There
is a lot of room for development in the Energy
Performance Contract market in Malaysia. This
article analyses the key elements of EPC market
development in Malaysia, including market
advantages and challenges.
Norazrin bin Rupadi of the Energy Commission
stated that the implementation of EPCs in
Malaysia’s Government sector was approved by
the Government in January 2013. The concept
of EPC is based on a profit-sharing agreement
between the building owner and the Energy
Service Company (ESCO) whereby the initial cost
for the energy efficiency improvement project is
borne by the ESCO. In ensuring the successful
implementation of the EPC, ESCOs are required to
register with the Ministry of Finance (MoF) to carry
out EPC projects in Government buildings under
the Green Technology Service Code (222801).
Meanwhile, MoF requires ESCOs applying for
registration under this code to be registered with
FEATURE
the Energy Commission. Since then, Malaysia’s
energy-saving service industry has developed
rapidly, both in terms of the number of ESCOs and
the amount of investment in EPC management.
The development of Malaysia’s energy-saving
service industry has been concentrated in the
industrial sector, mainly because industry is the
main area of ​​energy consumption, accounting
for two-thirds of the country’s total energy
consumption. There is more than one model for
EPCs in Malaysia, with energy-saving benefit-
sharing as the main factor, partly because energy-
saving benefit-sharing contracts enjoy national
financial incentives and tax incentives. The
energy service industry is in its infancy because
Malaysia is in the market stage of rapid economic
development and low energy prices. Many
industrial enterprises often only regard energy
efficiency improvement as one of the means to
reduce costs and impact on enterprises, to expand
production and increase profits. Therefore, there
is a lack of enthusiasm and initiative for energy
efficiency investment. Due to this circumstance,
energy-saving service companies have promoted
the implementation of EPC projects on a large
scale by using their own funds for energy-saving
retrofitting and sharing energy-saving benefits
with industrial enterprises. In doing so, they have
put huge financial pressure upon energy service
companies.
For most small and medium-sized energy
service companies in Malaysia, it is difficult to
obtain third-party financing because of the lack
of credit records, so most Energy management
projects can only be financed with their limited
47
 INGENIEUR
liquidity, resulting in smaller projects. The EPC
projects in the construction sector are small
in number and small in technology, and the
contractual energy management projects of
public institutions are rare. The reason is that
the property rights and use rights of commercial
buildings and complex property management
models make it difficult for energy-saving service
companies to carry out EPC projects in the
commercial field especially in public buildings.
Even if the Government has explicitly encouraged
the public sector to adopt EPCs to carry out
energy-saving initiatives, the Government’s fiscal
budget system has become an obstacle to the
promotion of contract energy management. The
current budget aims to pay the energy cost only.
It cannot pay the energy-saving benefits of ESCOs
implementing EPC projects.
In the initial stage of the development of
Malaysia’s energy-saving service industry, the
energy-saving benefit-sharing business model has
played an important role in the rapid start of the
industry. However, as more and more “low-cost
energy-saving measures” are implemented and
the liquidity of energy-saving service companies
are occupied with projects, the benefit-sharing
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model with ESCOs as the main body of financing
may be sustainable for the EPC market. This is also
a potential opportunity to actively look for other
financing models and contractual mechanisms.
This requires new policies to support innovation
in business models and financing mechanisms,
as well as extending the EPC to areas that are
not currently covered. Malaysia’s energy-saving
service market will continue to expand.
Therefore, there is a need to set targets
for building energy-efficiency retrofits. The
interest in building energy efficiency and green
buildings has increased, driving more buildings
to obtain “green” certification, increasing overall
energy efficiency. The online monitoring system
for energy consumption in the industrial and
construction sectors will also help to understand
energy use, tap energy-saving potential, identify
opportunities for energy savings and help energy-
using units to benchmark energy efficiency levels.
National and local Governments encouraging the
adoption of EPC mechanisms in the public sector
will further expand Malaysia’s energy service
market. The rising price of energy markets, the
establishment of total energy control targets, and
the establishment of carbon and other polluting
emissions trading markets will all stimulate
energy-saving demand in Malaysia.
Energy savings detection and verification
(especially to determine whether the energy
savings generated by the project are from the
implementation of energy-saving measures,
or other factors) are also a challenge because
each participant in the project has a strong
economic interest in the project. In the end, the
ESCO introduced a new EPC model – namely the
energy-saving guarantee model. In this model,
ESCO guarantees the lowest energy savings so
that the minimum expected return on the project
is deterministic and therefore more conducive
to external financing. ESCOs’ balance sheets no
longer have an investment in energy efficiency
projects, which allows ESCOs to launch more
new projects. At the same time, the International
Performance Measurement and Verification
Protocol (IPMVP) [4] stated that the long-term
success of energy management projects is
often hampered by the inability of the project
partners to agree on an accurate, successful
Measurement & Verification (M&V) plan. M&V
protocol discusses procedures that, when
implemented, help buyers, sellers and financiers
of energy projects to agree on an M&V plan
and quantify savings from energy conservation
measure (ECM) projects. This allows the project
to provide clear evidence for assessing and
recording project energy savings even if certain
conditions change after start-up. This procedure
has given customers more confidence in energy
savings and increased investor confidence in risk
aversion.
Malaysia has huge potential for energy-saving
initiatives. The Government should consider
policies and incentives encouraging contractual
models that promote technology consolidation
and deeper transformation. These can include
energy-saving guaranteed contractual models that
help achieve greater reductions in greenhouse gas
emissions. Malaysia can also consider developing
policies to encourage EPC projects to expand from
the industrial sector to the construction sector.
Many countries, including the United States,
already have many successful cases of EPC in the
construction sector. Malaysia can consider raising
targets and strengthening incentives to promote
deeper energy-efficiency retrofits while driving
large-scale, market-based financing.
The following approaches could further expand
Malaysia’s energy saving potential:
●● Consider extending tax incentives,
fiscal incentives, and measurement and
verification practices to models other than
benefit-sharing models, including energy-
saving models.
●● En c o ur a ge in t e r a c t i o n s b e t we e n
companies, clients, and Government
decision makers to maximise the impact of
incentives and subsidies.
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 INGENIEUR
●● Expand the coverage of measurement and
verification specifications to cover a wider
range of project types. Through effective
means, the measurement and verification
specifications can meet the actual
requirements of various types of contracts.
●● Develop reliable tools to measure energy
savings and establish effective baselines
to facilitate deep energy savings.
●● Increase the financing of third-party
financial investment institutions to the
owners, develop the national public credit
rating system as well as the required
standards and guidelines and allow an
independent auditing firm to determine the
accuracy of the financial report.
●● Establish diverse and innovative financing
channels to encourage greater energy
savings; establish project bundling
mechanisms to reduce transaction costs
and scale.
●● Continue to encourage financial innovation
to open the civilian and commercial
construction market and expand low-cost
project integration.
●● Establish an EPC model in the public sector:
adjust the Government procurement policy
and energy cost budget system according to
the needs of EPC to drive public investment
in the energy efficiency department.
●● Allow the public sector to retain its
original energy budget throughout the
implementation of the project to reimburse
energy-saving project contracts.
●● Ensure that the procurement policy is
beneficial to EPC projects, for example,
explicitly allowing EPC models and allowing
two-stage bidding. i.e. allowing ESCOs to
conduct investment-level audits.
●● Encourage to adopt procurement policies
that are beneficial to EPC. Due to the high
initial transaction costs in small-scale
markets, it is encouraged to conduct
consultations with energy-saving service
companies to facilitate these small-scale
markets to attract contractual energy
management projects
●● Work with the Energy Performance Contract
Demonstration Project Working Group to
establish direction, especially to determine
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whether project selection is focused on
the construction sector (public buildings,
commercial buildings, etc.) or the industrial
sector.
●● Use the working group to advance the
co-operation and consensus between
the two parties, including issues like
the establishment of feasible contracts,
financing, measurement and verification,
and strategic issues such as policy
recommendations.
It is recommended that demonstration projects
include technology integration solutions to achieve
deep energy savings. The following methods
should be adopted in parallel: energy-saving and
quantity-guaranteed applications, more effective
support for measurement and verification of
technology integration, and third-party financing
models.
In another case, customers did not trust the
technology at first, so the two parties negotiated
the EPC model, and the energy-saving company
bore the technological risks and costs of capital
investment.  However, after the project was in
operation for a period and the energy-saving
benefits gradually materialised, the company
found that the cost of signing the energy-saving
contract was twice that of the buyout equipment,
so they regretted it when they paid. Such examples
are everywhere in the energy-saving management
industry. Later, based on energy-saving benefit-
sharing, a variety of business models were derived
from the industry.
In addition, financial difficulties are also a
major obstacle in this industry. At the beginning
of the project, the energy-saving company needs
to provide a package of services such as start-up
funds, equipment, installation and commissioning,
maintenance and repair, etc., only to recover the
proceeds later.  Therefore, the initial start-up
capital is critical to the business. However, energy-
saving enterprises are mostly in their early stages.
High risks and lack of guarantees make it difficult
to obtain bank loans.  Under the circumstances,
contract energy management is still in its infancy
in Malaysia. Small companies are scattered in
various places, “each is in power”, and there is
no company that has occupied enough market
share.  From this point of view, the domestic
energy-saving industry may experience some
reshuffling in the future standardisation process.
Finally, let’s take a look at the situation in other
countries:
US contract energy management policy
The US Government has enacted the Federal
Government Performance Contract (ESPC) Act,
and the US Department of Energy provided
specific guidance and assistance to Government
agencies to develop documents on contract
energy management.  After the implementation
of the ESPC Act, the project capital recovery
rate of the energy-saving benefit-sharing model
was accelerated, which reduced the financial
risk of energy-saving service companies. After
the contract was over, the federal Government
received all the energy-saving benefits and
the economic growth rate rapidly increased.  In
addition, the US Government has formulated
a number of energy conservation policies,
provided a good policy environment, promoted
the development of the energy conservation
service industry, and raised public awareness
of energy conservation services.  In addition to
mandatory regulations, the United States has
also developed a market-based approach to
energy-saving standards in various industries
to promote the development of energy-saving
services. They have established standards for
the verification and testing of energy-saving
services in the energy-saving service industry
on a technical level in order to standardise the
energy-saving services market.
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 INGENIEUR
Canada’s contract energy management Czech contract energy management
policy. policy.

In the early 1990s, the Czech Republic began

to focus on the development of the contract
energy management industry. With the help of
the Czech Energy Conservation Center (SEVEN),
the US-funded energy efficiency service (EPS)
first entered the Czech market before some
Czech energy-saving service companies started.
Energy service companies in other countries also
Energy Performance
Contracting: Guide for
quickly entered the market. In the past 20 years,
Federal Buildings Czech contract energy management has been
continuously improving its operations. During this
period, the Czech Republic has enacted laws to
encourage the development of the contract energy
management industry and proposed a series of
public incentives. For example, the Ministry of
Energy provides energy-saving investments for
energy service companies; energy prices are also
subsidised in some cases; and most ESCO project
funds are mainly from bank loans at an annual
interest rate of 10%-20%, which is lower than
other transition countries.

The federal and local Governments of Canada France’s contract energy management
attach great importance to contract energy policy.
management and have established a specialised
energy-saving service company.  The six largest
banks in Canada support contract energy
management. The banks evaluate the customer’s
contract energy management programme
and gives priority to funding.  In 1992, the
Canadian Government began implementing the
Federal Buildings Initiative (FBI), which detailed
methodological guidelines and implementation
procedures for Government agencies to
implement contract energy management projects,
provide training, prepare guidelines, review the Since the 1970s, the French Government has been
qualifications of energy service companies, committed to promoting energy conservation.
recognise the accelerated depreciation of The French Environmental Energy Control Agency
equipment, and review and propose changes is the country’s national agency that controls
in contracts, along with sample contracts. environmental pollution. The current funding
The federal Government adopts three types of for energy conservation and environmental
contracting methods: ensuring energy savings, protection comes mainly from Government grants
sharing energy savings, and a combination of and corporate environmental pollution charges
the two. Government departments at all levels (or environmental management fees). 71% of
signed contracts with energy conservation service the funds used are for energy-saving projects
companies to reduce energy consumption of the implemented in industrial enterprises through
Government with energy management contracts. contract energy management.

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Japan’s contract energy management
policy.
The Japanese Government adopted mandatory
means to promote the development of contract
energy management. In 2002, the Japanese
Government revised the Energy Conservation
Law to ensure the smooth development of
energy conservation work, which mandated
implementation of energy efficiency indicators for
all large energy-intensive industrial enterprises and
commercial buildings. Provisions and requirements
for regular submission of energy consumption
reports have opened up markets for the business
development of ESCOs.  At the same time, the
Government supports energy-saving service
company collaboration with private enterprises
and Government departments by providing low-
interest loans. It also supports and assists in
the implementation of new energy and energy-
saving projects through the New Energy and Work
Technology Development Agency (NEDO).
There is still room for improvement in handling
energy efficiency in Malaysia. There are many
factors that can contribute to energy efficiency.
To paraphrase a quote from Neil Armstrong, ‘one
small step for energy efficiency, one giant leap for
Malaysia’s energy saving future’.
REFERENCE
Abdul Wahab, Zaini (2018), “Success Practices &
Case Studies in Energy Performance Contracting
Projects & Programme Implementation”,
[PowerPoint slides]. Retrieved from http://www.
maesco.org.my/uploads/1/2/8/1/12811096/
epc_success_stories-for_circulation.pdf (10
December 2018)
Carvalho, Martin, “Yeo: Malaysia can save at least
RM47bil over 15 years by being more energy
efficient”, 1 November 2018, The Star Online Web,
10 December 2018.
Hu Z., Han X., Wen Q. (2013) The Backbone of
DSM Implementation: Energy Service Companies.
In: Integrated Resource Strategic Planning
and Power Demand-Side Management. Power
Systems. Springer, Berlin, Heidelberg.
International Performance Measurement and
Verification Protocol (IPMVP), Volume I, March
2002, Retrieved from https://www.nrel.gov/docs/
fy02osti/31505.pdf (10 December 2018)
Rong-sheng, Lv & Sheng-qiang, Zhang. (2011).
Discussion on the way to increase the EMCo’s
Credit. 10.1109/ICEBEG.2011.5881924.
Rupadi, Norazin (2017), “Energy Efficiency
Initiatives in Malaysia”, [PowerPoint slides].
Retrieved from https://www.st.gov.my/ms/
contents/.../Goverment%20Initiative%20On%20
EE.pdf (10 December 2018)
Rytter Jensen, Henrik (2017), Energy Performance
Contracting Guide Book, Kuala Lumpur,
Malaysia: Building Sector Energy Efficiency
Project (BSEEP) Retrieved from http://bseep.
gov.my/App_ClientFile/df08bc24-99fb-47a3-
937f-dc25df9d3997/Assets/Books/2017-EPC-
BOOK-V4.pdf (10 December 2018)
S. Yang and L. Ji, “Research on tax incentive
mechanism for the development of energy-saving
service industry,” 2011 International Conference
on Business Management and Electronic
Information, Guangzhou, 2011, pp. 515-517. doi:
10.1109/ICBMEI.2011.5917960
W. F. Qin and G. Y. Xu, “Research on Development
Mode of Energy Management Contract in New
Energy Field”, Advanced Materials Research, Vols.
403-408, pp. 3004-3008, 2012
Wentong, Mi. (2011). Analysis on the factors
restricting the development of China’s energy-
saving services industry. 3560-3563. 10.1109/
ICECC.2011.6068006.
Wang, Licun & Du, Li & Liu, Shunshu. (2010). The
Necessity Analysis to Speed Up Contract Energy
Management in China. 869-872. 10.1109/
ICEE.2010.225.
X. C. Liu et al., “Approaches and Countermeasures
for Development of Energy-Saving Technology
Service Industry in Tangshan City”, Applied
Mechanics and Materials, Vols. 368-370, pp.
1332-1337, 2013.
53
 INGENIEUR
5G: A STRATEGIC
RESOURCE
FEATURE
Malaysia has started the ball rolling on 5G with
the setting up of a task force. Authorities are
now preparing the necessary groundwork to
provide the framework for the rollout sometime
in 2021. It is time that engineers and other
professionals gear up to take advantage of 5G
applications and usher the country into the 4th
Industrial Revolution.
F
or most of us, 5G is basically a step up from
4G. There has been a lot of chatter about
5G at various levels. It has been touted as
an important link to economic development.
Industry sees it as a tool to transform the way we
work, learn, communicate and travel. Agriculture,
education, healthcare, leisure and manufacturing
sectors are said to benefit if they take advantage
of this latest cellular technology.
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What is 5G?
5G is the common term used to describe the next
generation of wireless systems. We are familiar
with these systems because we use them on our
mobile phones. We may not be too familiar with
2G, 3G and 4G but we have certainly encountered
GSM, UMTS and LTE, as the digital cellular
networks that our phones connect to.
5G is not only the next generation digital
cellular network, it is exponentially faster, capable
of ultra reliable low latency communications
(URLLC) and can accommodate a massive number
of devices per square kilometer (Massive Machine-
Type Communications or mMTC), thus bringing
scalability to a very high degree. All of these will be
possible in an environment where there are large
amounts of concurrent connections.
 5G technology is specified to use two
frequency bands, FR1 (below 6 GHz, shared
with LTE) and FR2 (mmWave or above 24 GHz).
5G signals that use higher frequencies are not
capable of travelling large distances and cannot
easily penetrate solid objects. As a result, rather
than huge, geographically dispersed towers,
much of a 5G network will consist of a dense,
distributed network of small cell base stations to
overcome these issues. This in turn allows more
processing on the edge, leading to lower latencies.
Such a network is also advantageous in terms of
installation costs.
5G also makes use of other technologies such
as Massive MIMO antennas that can increase
sector throughput and Beamforming to improve
signal quality and data transfer speeds.
Superhighway for IR4
Bernard Marr, in an article in Forbes, describes
the 4 th Industrial Revolution (IR4) as "the
exponential changes to the way we live, work and
relate to one another due to the adoption of cyber-
physical systems, the Internet of Things (IoT) and
the Internet of Systems. As we implement smart
technologies in our factories and workplaces,
connected machines will interact, visualise the
entire production chain and make decisions
autonomously. This revolution is expected to
impact all disciplines, industries, and economies."
Professor Klaus Schwab, Founder and
Executive Chairman of the World Economic Forum,
the man who coined the phrase, describes it as
"a range of new technologies that are fusing the
physical, digital and biological worlds, impacting
all disciplines, economies and industries."
While the previous industrial revolutions
were powered by steam, electricity and
computerisation, the fourth industrial revolution,
with an entire interdependent, interlinked digital
ecosystem, relying on data to inform every step
in every process, will be underpinned by 5G
communications networks.
5G infrastructures will allow for real-time
communication, eliminating the annoying lag over
distances, procedures such as remote surgeries
that require not only real-time images and
response but also ultra-reliability, and mMTC will
provide the capacity to accommodate IoT devices
and deliver AI capabilities.
S t r a t fo r, an A m e r i c an ge o p o li t i c al
intelligence platform and publisher, writes, "5G
communications networks will enhance the
performance of the Internet of things, autonomous
vehicles and other technological advancements in
the 2020s."
In an article published on their website, Stratfor
Worldview reported that in a 5G simulation in San
Francisco, users could enjoy a significant increase
in speeds rising from 71 megabits per second
55
 INGENIEUR
for 4G to 1.4 gigabits per second for 5G. These
speeds, in their view "do not portend a mere
improvement in the streaming of media but will
unlock real-world applications on a massive scale.
Augmented and virtual reality will also benefit
from the emergence of the mobile broadband
improvements."
In the area of URLLC, Stratfor Worldview
expects latency at less than one millisecond,
compared to the current standard of 25
milliseconds for existing 4G technology. Under
these conditions "tactile internet" will become
a possibility, allowing people to control objects
remotely and reliably, paving the way for remote
surgeries. Self-driving cars, already a reality, can
be deployed widely. In their view, 5G represents a
great leap forward and "countries and companies
with ambitions in the field are well aware of the
need to stay ahead of the pack for what is certain
to be a strategic resource."

5G in Malaysia

At a recent media briefing on the 5G

Malaysia Showcase in Putrajaya, Malaysian
Communications & Multimedia Commission
(MCMC) chief digital officer Gerard Lim said that
Malaysians may start using 5G by 2021 or 2022.
The 5G Malaysia Showcase signalled
Malaysia's interest in the technology and is aimed
at informing Ministries, agencies and industry
players of the potential of 5G and to showcase
existing innovations. Available on show included
the latest generation of holograms, massive
multiplayer gaming, healthcare advancements,
drone technology, and even autonomous self-
driving vehicles.
Last November, the MCMC set up a
national 5G task force with key stakeholders
and industry players, specifically for reviewing
and recommending a holistic strategy for the
implementation of 5G.
So a time frame has been set and MCMC
has started the ball rolling. A task force has
been set up. As the authorities do the necessary
groundwork to provide the framework for the
rollout of 5G, including regulation, spectrum and
infrastructure, industry players should begin to
strategise as to how they can take advantage
of 5G and usher Malaysia into the 4th Industrial
Revolution. - Inforeach
REFERENCE
https://en.wikipedia.org/wiki/5G
https://www.weforum.org /about/the-fourth-
industrial-revolution-by-klaus-schwab
h t t p s : // w w w . f o r b e s . c o m / s i t e s /
bernardmarr/2018/08/13/the-4th-industrial-
revolution-is-here-are-you-ready/#5ae72cd4628b
https://www.micron.com/insight/fast-data-the-
engine-that-drives-the-fourth-industrial-revolution
https://worldview.stratfor.com/article/us-china-
and-others-race-develop-5g-mobile-networks
https://www.sdxcentral.com/5g/definitions/key-
elements-5g-network/
h t t p s : // w w w . m a l a y m a i l . c o m / n e w s /
malaysia/2019/04/03/5g-in-malaysia-mcmc-
says-eyeing-2021-2022-deadline/1739473
h t t p s : // w w w . n s t . c o m . m y/n /
nation/2019/04/476697/mcmc-5g-opens-new-
frontiers-innovation-msia

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Tribute to the late Ir. Dr
Abdul Majid bin Dato’ Abu
Kassim
I
t has been over two years since we lost a
talented and dedicated member - Ir. Dr Abdul
Majid bin Dato’ Abu Kassim. His name is still
mentioned in most meetings of the Board of
Engineers Malaysia’s (BEM) Committees.
Dr Majid, born on June 19, 1958, graduated
from the University of Edinburgh in 1982 with
a First Class Honours in Bachelor of Science
(Engineering). He obtained a PhD (Engineering)
from the same university in 1986 and spent 30
years of his engineering career in consultancy firm
Hussein & KH Chong Sdn. Bhd.
A general impression of him, when he was
working as a consultant, was that of a simple
person but who was very knowledgeable on
the engineering details and was able to provide
TRIBUTE
Dr Majid starting an interesting talk
practical solutions. Whilst serving on various
committees under the BEM, he still retained the
same personality of a simple outfit, but was more
vocal in opinion on matters that challenged the
basic principles and his beliefs. Several years ago,
he challenged the appointment of a new publisher
of BEM’s publication, The Ingenieur, which was not
on favourable terms with BEM although it had top
management support. He finally won the battle
which saved considerable funds for BEM.
Since joining the Board in 2010, Dr Majid,
as he is commonly referred to, devoted a lot of
his time and effort to BEM activities. He is still
most revered as the Professional Engineer who
spearheaded the latest amendments (2015) in
the Registration of Engineers Act (REA) 1967.
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 INGENIEUR
Fellow Board Members remember him as a
very detailed and assertive person, who always did
his research and supported his views with facts
and figures. “It was difficult to win an argument
with him, he was strong-minded in his opinions”
said Ir. Prem Kumar. On top of this, he was vocal
and dared to challenge others on pertinent issues.
He projected himself as a man of principle and
integrity, who disliked those who performed public
service for personal gain. “He was always clear
about the role of the Board to protect the public
and not the engineers,” Ir. Prem elaborated.
Dr Majid was a Board Member between 2010
and 2015 and was reappointed in August 2016
until his untimely demise. He was the Chair
of BEM’s Engineers Act Committee and was a
member of the Professional Practice Committee,
Scale of Fees Committee and Examination and
Qualification Committee.
Dr Majid also held prominent positions in
the building industry, namely President of the
Association of Consulting Engineers (ACEM) in
2008 and Chairman of the Building Industry
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Dr Majid enjoying a meal with fellow engineers
Presidents Council (BIPC). He was appointed by
the Minister of Works as a Member of the Expert
Panel to review the practice of the construction
industry in 2013. He helped investigate factors
contributing to the collapse of the ramp of the
Second Penang Bridge in Batu Maung as well as
recommend remedial measures.
The Ingenieur editor Dato’ Ir. Fong Tian Yong
stressed that Dr Majid contributed significantly
to the engineering profession with passion and
vision. “In view of trade liberalisation, he could
foresee foreign competition and the need to
uplift the standard of engineers,” he explained.
Dr Majid was instrumental in revising the
terms and conditions of engineer registration
in Malaysia to keep up with the times. He
introduced new categories of registered persons
namely Engineering Technologist and Inspector of
Works in the revised REA. To ensure standards,
he proposed the Professional Assessment
Examination (PAE) and the Professional
Competency Examination (PCE) for different
categories of registered persons.
 WORDS OF APPRECIATION
(Source: Book on “Remembering Dr Majid” by Prem Kumar and Wong Pek Yin)

Dr Majid was a simple, unassuming and pleasant fellow but most importantly, he was a good friend.
People like him make the engineering fraternity something to be proud of. This country will definitely
miss a rare talent with a great mind but even greater heart. – Dato’ Sri Ir. Judin bin Abdul Karim

It was an honour to serve as council member during his tenure as ACEM President. I have vivid
recollections of his relentless endeavours to promote and ensure that ACEM was at the forefront of
engineering consulting practice. – Ir. Tom Chong

It is his wit and honour that I enjoyed most of our friendship, he made me laugh. Dr Majid saw
the lighter side, especially when it came to serious matters. It was during such a moment that he
coined the term ‘chicken burger’ to describe people who talked a lot but then chickened out at the
last minute. – Wong Pek Yin

It is never often enough in life to have the privilege of knowing someone who is so dedicated to the
well-being and perfection of his profession, not in the sense of protecting that profession but rather
protecting the interest of the public. – Ir. Chen Thiam Leong

His dedication to BEM and the engineering profession is most commendable and I will always
remember him as a friend, advisor and champion of the engineering profession. – Dato’ Ir. Fong
Tian Yong

His professionalism. He is a person who is very passionate and very well versed in whatever he
does. He must have spent long hours doing research on the subject matter he was involved in. He
used to call me after office hours and our conversations were normally long. – Ir. Rousdin Hassan.

Dr Majid is one of the few professional engineers I salute. I salute him for his professionalism,
dedication, courage and humour. Most of all, I remember him as ACEM Council Member, President
Elect, President, Past President as well as fellow consulting engineer! – Ir. Heng Aik Sin

I remember Dr Majid with his unkempt hair, his short-sleeved shirt with ink stains and shoes that
have seen better days and yet he was a towering figure with a loud and passionate voice espousing
his views on the state of our industry, on IEM, on his efforts at BEM, on his many engagements
with various stakeholders in the industry. He was a man out to change the world. He was tireless in
his efforts to advance our profession and was always willing to challenge the norm and the status
quo. – Ir. Prem Kumar

Sincerity and courage to fight for his beliefs are traits that Dr Majid was respected for. As an
example, when BEM retracted its stance against registering Engineering Technologists under the
Board, YB Dato’ Seri Shaziman Abu Mansor, the then Minister of Works was upset with this about-
turn. Dr Majid responded, ‘Yes YB, the Board made a mistake before. But two wrongs cannot make
the mistake right. That is why the Board has now decided to register the Technologist, and he
proceeded to explain the reasons. The Minister accepted the argument and went on to convince
the Cabinet to overturn an earlier Cabinet decision. – Ir. Ashari Mohd Yakub

59
 INGENIEUR
The PCE was originally structured for the
Civil, Electrical and Mechanical branches
but due to demand, the branches Chemical,
Mining, Environmental and Geotechnical were
subsequently added. Professional Engineers with
Practicing Certificate (PEPC) are now mandated by
many authorities and organisations, covering more
branches than originally envisaged.
Dr Majid led the mammoth task of drafting
the amendments to the REA and convincing
the relevant authorities of the need for these
changes. He first approached the legal adviser
in the Ministry of Works and then briefed the
Minister before meeting the Attorney General
(AG). His professional approach won over the top
echelons of Government in the Dewan Rakyat
and Dewan Negara. The whole process took
long hours of research, tons of paperwork and
countless meetings, but results were achieved in
less than five years. The Registration of Engineers
(Amendment) Act 2015 was passed by Parliament
in 2014 and the Act was gazetted by the Minister
Dr Majid - Devoted engineer
of Works on February 28, 2015. It took into effect
on July 31, 2015. must be given to Dr Majid who took the trouble to
Continuing his cause, Dr Majid went on comb through all of BEM’s old records, summed
numerous BEM roadshows throughout the country up all old circulars systematically, and proposed
to explain the REA amendments to engineers amendments to replace outdated documents.
and stakeholders in the industry. BEM used to For clarity on the hierarchy of BEM issued
comment that during his tenure as Board member, documents, he made the effort to consult the AG’s
no road show was complete without him. His office and came up with a categorical classification
favourite topics had always been on works safety, system of BEM’s published documents, which
responsibility and accountability of consulting include the categories Notification, Circular and
engineers. His sessions always attracted the most Guidelines.
attention as he was directly involved in the drafting Image and branding for BEM were also
of the policies concerned. With him around, the important in Dr Majid’s strive for excellence. He
Q&A sessions normally extended beyond the was often chosen as a spokesperson for the Board
closing time due to the interest generated on the in talks and negotiations with various Ministries.
Board’s policy and the professional liability issues. His professional demeanour and accountability
On BEM’s task assignments such as working put BEM in good light. This devoted engineer will
groups on guidelines or investigation works, it was be remembered for his immense contribution to
a joy serving under his chairmanship as he would the Board and the engineering profession.
have done thorough research and prepared the His sudden and untimely demise took
complete working paper leaving little room for everyone by surprise although some knew he
members of the team to comment or add on. It was unwell months before. He still appeared
was in fact a learning opportunity for members normal and continued to clear the unfinished
under his team when he would reveal the findings works under various committees of BEM. His
of his research and the rationale of his proposals dedication to BEM and the engineering profession
and solutions. is most commendable and engineers will always
BEM is now reviewing all past circulars dating remember him as a friend, advisor, and champion
as far back as the 1980s. For this exercise, credit of the engineering profession.

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Consequences and
Flaws of the Certificate
of Completion and
Compliance – Comparative
Analysis with Proposed
Solutions1
By Datuk Professor Sundra Rajoo
The aim of this report is to undertake an
objective analysis of the implementation of
the Certificate of Completion and Compliance
(CCC) in 2007 which was aimed at replacing
the Certificate of Fitness for Occupation (CFO)
previously issued by the local authorities under
the Street, Drainage and Building Act 1974
(SDBA).
Under the former system, the CFO was issued by
the Local Authority (LA) under the Uniform By-Laws
of the Street, Drainage and Building Act 1974 (Act
133). The rationale behind the change was that
the former system was overly cumbersome, time-
consuming and subject to abuse.
It was not unusual for inordinate delays
to occur due to many factors including: non-
compliance by the developer for the submission
of Form E and its enclosures to the LA, additional
conditions imposed by the LA at the time of an
application for the CFO, the involvement of many
technical agencies and the lack of technical
officers to process the CFO.
Purchasers of proper ties encountered
numerous problems whenever vacant possession
was delivered to them by developers and the
1 ‘The Certificate of Completion and Compliance (CCC) In the Building Industry — Bugbear or Bunkum?’ by Ir. Harbans
Singh and Sundra Rajoo [2008] 1 MLJ cix.
REPORT
purchasers could not occupy or renovate their
properties because the CFO was not issued.
Back in 2007 when the CCC was implemented,
self-certification, self-regulation, cutting down
red-tape and corruption were intended to be the
plausible solutions for the problems posed by
the certification process prevailing at that time.
Bearing these in mind, the new system was
proposed and eventually implemented.
Due to unending complaints particularly
from developers that the local authorities were
not adhering to the directives that had been
issued, the Government was concerned that
such apprehensions would presumably translate
into a loss of votes at the ballot box. Hence,
the Government approached the problem
with the implementation of the CCC. This was
intended to rejuvenate the public’s confidence
and to give assurance to the public that the
newly implemented procedure would be more
streamlined and structured.
However, 10 years into its implementation,
the CCC has proven to be more of a bane
than a boon. The reasons for this are many.
For starters, the Principal Submitting Person
(PSP) holds numerous responsibilities and
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 INGENIEUR
liabilities, including and not limited to criminal
and statutory liabilities. The arduous and strict
liabilities vested upon the PSP, residual powers
of the local authorities, ambiguity in approach
and the lack of effective check-and-balance
mechanisms in the issuance of a CCC are the
major flaws of the CCC regime. The present
trend has also indicated that the CCC regime
proves to be an implosion which I will deal with
in detail in this report.
The supporters of the CCC regime appear to
have not scrutinised the liability issue in the haste
to implement this method of a public delivery
system. This could be due to sheer ignorance or
inadvertence. This view is reinforced by the fact
that the liability issue has not been substantially
addressed but merely polished. It is fairly apparent
that the individuals and bodies responsible for the
implementation of the CCC system have been
zealous in their approach.
There are controversial areas of concern
with regards to the professional liability of the
CCC certifier when the entire delivery system is
examined together with the amended relevant
laws. Exponents and proponents of the system
have, however, sold this system on the basis
that the professionals carry the same liability as
the previous CFO system. This view is a grave
misconception.
This report will further elucidate how the CCC
regime works and its inadequacies. It is pertinent
to note that all these gaps and more were
underscored by an article I have written with Ir.
Harbans Singh back in 2008 “The Certificate of
Completion and Compliance (CCC) In the Building
Industry -- Bugbear or Bunkum?”2.
Issues regarding CFO
Prior to the implementation of the CCC, the CFO
used to be issued by the local authorities [See s 3,
The Street, Drainage & Building Act 1974 (Act 133)
and the Uniform Buildings By-Laws for definition
of the CFO]. As mentioned above there were a
2 [2008] 1 MLJ 109
3 ‘Self-Certification versus private certification doctrines on the issuance of the Certificate of Completion and
Compliance for buildings in Malaysia’ by Kamarudin Mohd Nor (2008), Journal of Building Appraisal (Vol. 4, No.2,
pages 125-131).
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series of problems around the CFO issuance,
largely due to the alleged unnecessary layers of
bureaucracy in the certification process and the
alleged rampant acts of gratifications in the local
authorities3.
It was a normal occurrence that many
developers gave vacant possession without the
CFO being issued. This caused considerable
difficulties to house buyers for such vacant
possession does not mean a beneficial takeover
and the ability to use the relevant building lawfully.
The situation was the same for the commercial
buildings and industrial premises. Disgruntled
purchasers complained to the Ministry of
Housing & Local Government (MOHLG), other
Governmental authorities, activist consumer and
non-Governmental organisations such as the
Consumer Association of Penang and Federation
of Malaysian Consumers Associations (FOMCA)
whenever there was delay or failure to issue a
CFO by local authorities. In the main, most of
these complaints were well grounded and not
frivolous.
CFO PROCEDURE
The following are the brief steps that were involved
in the CFO procedure:
1. Building Plan approval: Following the
procurement of the Development Order
(DO) approval, for buildings, the next
approval under the CFO procedure in
order of precedence was the Building Plan
approval.
2. Plan submission by Qualified Person: The
plans had to be endorsed by a Qualified
Person (QP) for building plan approval.
The endorser of the plan was responsible
for the proper execution of the works until
completion, unless he was removed and
replaced with the consent of authority
concerned.
3. Notification prior to commencement of
work: Commencement of any work had to
 be immediately preceded by notifying the
relevant authority through the issuance
of the prescribed forms; failing this may
attract applicable sanctions.
4. Supervision: The QP was obligated to
supervise the work through the lifetime of
the project.
5. Authority Inspection: Upon completion
of the works, the relevant technical
agencies inclusive of the LA had to carry
their respective inspections. Having been
satisfied that the relevant conditions
of the plan approval had been met, the
completion certification was proceeded
with.
6. Certification by QP: The QP certified in
Form E that he had supervised the erection
of the building and that he accepted full
responsibility for those portions which he
was respectively concerned with.
7. Confirmation from LA: The vacant
possession of a dwelling was handed
over to a purchaser when all the above
conditions had been satisfied, and the LA
had issued the CFO.
8. Certificate of fitness and occupation: In
addition to the issuance of the full CFO, the
local authorities were empowered to issue
a Temporary Certificate for Occupation
(TCFO) and Partial Certificate for Occupation
(PCFO). As the name suggests these were
temporary certificates.
THE CCC REGIME
CCC is defined as the certificate given or granted
under any by-laws made under the Street,
Drainage & Building Act (SDBA) and is meant to
replace the previous Certificate of Fitness for
Occupation (CFO) issued by the local authorities
under SDBA. (see s 2(b), SDBA (Amendment) Act
2007). This has been in effect since April 12,
2007.
The initial steps of the approval process i.e.,
for Building Plan Approval, Earthworks Approval,
etc. are similar to the CFO regime, save for the
introduction of the term 'Principal Submitting
Person' (PSP). SDBA defines a PSP as a qualified
person who submits building plans to the LA for
approval and includes any other qualified persons
who takes over the duties and responsibilities of
or acts for the first mentioned qualified person
in particular circumstances as permitted by the
applicable by-laws. Effectively speaking, the PSP is
meant to be a Professional Architect, Professional
Engineer or Building Draughtsman.
Under the CCC system, the LAs may inspect
the building site at any time on their own initiative
or if they receive complaints. In the event of a
failure to comply with the approved plans, the Act
or by-laws in the erection and construction of the
building, the local authorities may issue to the PSP
the following:
a. a written notice requiring compliance within
a period specified in the notice, as the LA
thinks fit, in order that the non-compliance
be rectified; and
b. a directive in writing to withhold the
issuance of CCC until such non-compliance
has been rectified.
The LA may itself cause any work to be
executed or any measure to be taken if it considers
such work or measures necessary. Even though
the local authorities are vested with such umbrella
powers, these liabilities are meaningless. It is
the PSP who has to ensure that all the technical
conditions as imposed by the LA have been
complied with and if he fails to do so, severe
penalties can be imposed on him, as described in
detail below.
CHANGE IN LIABILITY
With the move towards self-certification, it is
inevitable that there is a parallel shift in liabilities
away from local authorities to the professionals, in
particular, the PSP. The bulk of the liability unfairly
falls on the PSP. A number of statutes have been
amended to increase the penalties to discourage
wrongful certification and to expressly prohibit
fraudulent certification by the PSP, making it much
more onerous on the professionals.
Here are a few pointers elucidating the
increased liability of the PSP under the current
regime:
Statutory Liabilities - With regard to his statutory
liability, the recent amendments to the relevant
laws and in particular the SDBA, impose additional
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 INGENIEUR
duties and responsibilities with attendant
sanctions which are heavier in nature and content
and could include custodial/penal sanctions in
certain instances. For example, Section 70(27)
SBDA (Amendment) Act 2007 provides for
imprisonment of up to 10 years where the PSP
permits a building to be occupied without a CCC.
Liability under SBDA (Amendment) Act 2007 - If
a person who is not the PSP issues a CCC; or if
the CCC is issued without all the relevant forms
prescribed by the by-laws made under the SBDA;
or issues a CCC in contravention of a direction
given by the LA to withhold such issuance pending
rectification of any non-compliance; knowingly
makes or produces or causes to be made any
false or fraudulent declaration, a certificate,
an application or representation of any form
prescribed in any by-laws made under the SBDA
knowing the declaration, certificate, application
or representation has been forged, altered or
counterfeited; or permits to be occupied any
building or any part of a building without a CCC
shall be liable or conviction to a fine not exceeding
RM250,000 or to imprisonment for a term not
exceeding ten years or both (see s 70(27)(a) to
(f), SBDA (Amendment) Act 2007). Both civil and
criminal liabilities run concurrently making this a
very severe liability for the PSP.
Liability under Uniform Building By-Laws
(Amendment) 2007 Act - Where the PSP who
fails to deposit a copy of the CCC or PCCC (as the
case may be) within the period stipulated in by-
law 25(3) with the LA and the Board of Architects,
Malaysia or Board of Engineers, Malaysia (as the
case may be); or fails to comply with the notice
issued by the LA in respect of the rectification of
any failure to the building or non-compliance with
the by-law 25(4), shall be guilty of an offence (see
By-law 28(1), UBBL (Amendment) 2007).
Liability under Housing Development (Control
and Licensing) Act - Various other legislations
have also been amended to impose increased
liabilities on the PSP. For instance, under Section
22F of the Housing Development (Control and
Licensing) Act 1966, any architect or engineer,
who issues a progress certification knowing
that the works therein referred to have not been
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completed in accordance with the provisions of the
Sale and Purchase agreement, shall be guilty of an
offence and shall on conviction be liable to a fine
which shall not be less than RM10,000 but shall
not exceed RM100,000.00, or to imprisonment for
a term not exceeding five years or both.
Liability under the various Disciplinary Boards -
In addition to all the statutory liabilities discussed
above, the PSP may also be subjected to disciplinary
action by the Board of Architects, Malaysia or the
Board of Engineers, Malaysia as the case may be
(see Section 17-19, the Architects (Amendment)
Act 2007). Should there be wrongful or negligent
or false certification by the PSP of the CCC or any
other disciplinary offence committed by the PSP in
the process of implementing the CCC procedure,
under the Architect's Act 1967 (Amendment)
Act 2007 or Registration of Engineer's Act 1967
(Amendment) Act 2007, these professional
bodies are empowered to investigate and take the
necessary disciplinary action against him.
Increase in the quantum of penalties - The
relevant regulatory bodies concerned can mete
out heavier penalties in the form of bigger fines,
longer periods of suspension of registration and
even custodial sentences (see Section 7A, 5(d), 24
and 25, Registration of Engineers (Amendment)
Act 2007). As part of the ‘self- policing’ or ‘self-
regulating’ obligation, these professional bodies
have been given more clout in the process
including sanctions they can mete out for
disciplinary breaches and offences committed
under the respective Acts by a professional such
as a PSP.
All these amended laws and by-laws have
left the PSP vulnerable to direct complaints
from interested and affected parties such as
purchasers, lenders and the like. To sum up,
the PSP holds civil liabilities, criminal liabilities,
statutory liabilities, professional liabilities and
liabilities under tort. This is in addition to the
fact that the other parties are involved in the
certification process like the contractor, sub-
contractor and consultants’ site supervisors.
It is also worth mentioning at this juncture, that
the protection of double jeopardy does not apply
to the PSP under his duties. Therefore, he holds
concurrent liability for all of the above. Also to be
taken into consideration is the loss of reputation
and time defending these proceedings which
cannot be quantified or replaced.
It must also be emphasised that the
Courts will not treat a breach of these duties
and responsibilities imposed by the various
legislations lightly, as the liability for such
breaches is strict. This position is reinforced by
the case of Pendakwa Raya -lwn- Chew Weng
Leong [2015] MLJU 1238, whereby the Penang
High Court reversed the Sessions Court’s decision
on appeal, and held that the prosecution had
made out a prima facie case against Chew Weng
Leong, the PSP who was alleged to have illegally
issued the CCC despite the fact that the LA had
withheld such issuance pending rectification
of non-compliance. In this case, the MPPP had
withheld the issuance of CCC and requested the
developer to carry out the required “Full Scale
Load Test” on the subject building which had
allegedly settled.
The developer did not carry out the said test
as required. Despite this, the PSP issued the
CCC, in contravention of Section 70(27)(c) of the
Street, Drainage and Building Act 1974. Breach of
Section 70(27)(c) is a criminal offence and upon
conviction, the PSP would be liable to a fine of not
exceeding RM250,000.00 or to imprisonment for
term not exceeding 10 years or both. In this case,
the Penang High Court held that such statutory
offence attracted strict liability, and the mens rea
for committing the breach was presumed.
The local authorities are absolved from most
of the liabilities and cannot be made a party to
the suits. Even if they were to be made parties to
the suit, the chances of obtaining an order against
them are bleak. This can be demonstrated in the
recent High Court decision in Aini bt Ismail & Ors
v OSK Properties Sdn Bhd & Ors [2017] MLJU
104. In this case, the purchasers of a singly built
detached house sued the developer, the LA and
the PSP involved in the Project.
The High Court allowed the application
made by the LA to strike out the claim against
it on the grounds, in the main, that there was no
contractual relationship between the purchasers
and the LA, and that more importantly, By-Law
25A of the Uniform Building By-Laws 1984 [G.N.
4 Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon [2006] 2 MLJ 389, F.C.
5178/84] had vested full power to the PSP to
issue the CCC. By-Law 25A of the UBBL 1984
provides that the PSP accepts full responsibility
for the portions that he is concerned with, which
includes the supervision of the erection and
completion of singly built detached houses.
The High Court took note that under the CCC
regime, the duty to ensure compliance with regard
to the CCC rested fully with the PSP, and that even
though the LA may also inspect the building, it
was not mandatory for them to do so, Although
the High Court also struck out the claim against
the PSP in this case, it was done so because of
incomplete\technical faults in pleading issues.
The PSP has no immunity unlike the local
authorities under the previous and present
regime4, as demonstrated in the case of Aini bt
Ismail & Ors v OSK Properties Sdn Bhd & Ors
[2017] MLJU 104.This opened up a floodgate of
cases and has proven to be of detriment to the
professionals, though it has benefitted the long
suffering aggrieved parties such as purchasers.
COMPARISON OF PSP LIABILITY IN CCC
REGIME vis-à-vis CFO
It may appear on the face of it that the PSP carries
similar responsibilities and liabilities as the QP in
the previous CFO regime at least in terms of civil
liability. However, it is in fact far from the truth in
practice.
Increase in Administrative Role: Under the CCC
procedure, the PSP has much more administrative
obligations to perform vis-à-vis the other building
professionals namely, mechanical and electrical
engineers and quantity surveyors, main contractors,
trade/subcontractors, etc. to ensure that statutorily
prescribed Forms G1 to G21 are duly signed/
endorsed, collated and checked before the CCC is
issued. This is in addition to his existing duties to
supervise the construction process and taking all
the adequate means to ensure care.
PSP reliant on the employer for help: Having
no direct contractual control over such parties,
to fulfil his statutory liability especially in regard
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 INGENIEUR
to the Forms G1-G21, the PSP has to look to the
employer for help in sanctioning delinquent or
dilatory third parties so that the CCC procedure
is not derailed. Hence, although he is ultimately
directly liable to his employer, the scope of his
duty of care is considerably wider because he
carries out more duties and liabilities.
The PSP is liable to other interested parties:
Furthermore, as for the previous CFO regime, the
PSP is potentially liable to other interested parties
such as purchasers, lenders, etc for any breach
in his duties vis-à-vis the issue of the CCC. Here
again he can be subjected to claims under the tort
of negligence; a very real possibility in view of the
PSP undertaking self-certification. In the event
of either the non-issue or late issue of the CFO
under the previous procedure, aggrieved parties
rarely ever proceeded against the LA concerned
as the latter was protected by immunities granted
statutorily and under the relevant case law.
The PSP has no Immunity: However under the CCC
procedure, since the PSP has no such immunity,
many an aggrieved party could be tempted to
proceed against him either directly or as a joint
defendant with the developer or vendor under
the law of tort should he default in his prescribed
certification duties. It is even more likely when
the PSP is seen to have 'deep pockets' and/or is
adequately covered by a Professional Indemnity
Insurance Policy. The sum total of which would be
the opening up of a floodgate of cases much to
the detriment of the professionals, however more
to the benefit of long suffering aggrieved parties
such as purchasers.
INADEQUACIES OF THE CCC PROCEDURE
Although much hyped as the definitive solution to
the contemporary incompetent and unfavourable
CFO regime, the CCC system in its existing form,
nevertheless is far from perfect and suffers
from a wide range of shortcomings, fluctuating
from measly trivial deficiencies at one end of the
spectrum to very serious lacunae that may render
the procedure in practice a minefield of disputes
and claims.
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Inadequate Checks and Balances: The power
to issue CCC rests predominantly upon the PSP,
without an adequate mechanism for checks and
balances. The perception of the public is that the
PSP would act more in the interest of their clients,
who are the developers/employers, than that
of the purchasers and endusers. This, and the
emergence of case laws and rise in complaints
by the public pertaining to the abuse or alleged
abuse of the system and breaches by the PSP in
the issuance of a CCC has seriously dampened
the confidence of the purchasers and the public at
large in the CCC system.
Non-technical issues left unaddressed: The
CCC leaves the non-technical issues to be
resolved between the developer/vendor and the
LA concerned or through any other alternate
mechanism to be worked out between the parties.
It effectively means that after the issuance of a
CCC, local authorities cannot ensure that the PSP
meets his obligations vis-à-vis the relevant non-
technical issues.
No quality control mechanisms: The CCC
regime does not preclude the issuance of a
certificate on the grounds of quality nor does
it provide a forum to do so. Such matters will
have to be taken up as a cause of action in a
breach of contract or tort of negligence through
arbitration or litigation.
Lack of flexibilit y in implementation:
Construction projects usually spread over a long
period of time and may witness a change in
circumstances from the initial project approval to
ultimate realisation calling for a review of technical
and non-technical conditions. The PSP has no
such powers, for non-technical conditions the
local authorities still retain some residual power
but their ambit remains ambiguous.
Consultants’ site supervisors are not included
in the CCC procedure: the consultant’s site
supervisor is precluded from the matrix of
responsibility under the CCC regime. The site
supervisors play a crucial role during the execution
and construction stage of a building and are the
real 'eyes and ears' of the respective consultants.
The very essence of the CCC which is to make all
parties including the PSP fully responsible and
accountable for their respective scope of works
gets defeated by the preclusion of site supervisors.
Matrix of responsibility not effective: The CCC
does not provide for the registration and regulation
of all parties such as contractors, sub-contractors
and tradesmen. It seems that the instant matrix
of responsibility appears to be hastily constituted
without having sorted out its effectiveness as to
its enforceability.
Ambiguity in approach: On certain occasions,
the LA still needs to approve the forms submitted
before the PSP. This breaches the spirit of the
new system. Complaints have been received from
various quarters about local authorities wanting
to conduct a physical inspection of the building
before they accept the CCC. This causes delays in
the issuance of the certificate, unrest in the public,
confusion amongst the buyers as they were made
to understand that local authorities did not have a
say in CCC issuance.
NEED FOR LOCAL AUTHORITIES TO
RESUME LIABILITY
The reason for the introduction of CCC process
was to address the unnecessary layers of
bureaucracy in the CFO system, the alleged
rampant gratifications to the local authorities,
the delays in certification by technical agencies
of the local authorities at the time of the CFO
application and the lack of technical officers to
process the CFO. However, despite being in effect
for the last 10 years, the CCC is still a dark issue
to many. Below are the reasons that portrays that
the CCC system is defective and local authorities
should resume the responsibility of issuing the
certificates preceding vacant possession.
Lack of checks and balances: Under the current
system, the PSP enjoys the total freedom to design,
produce plans and documents for the purposes of
production without having to obtain prior approval
from the local authorities. It is like giving all three
powers namely, legislative, judicial and executive
to one body. It often increases the probability of
a biased decision and prejudices the principle
of checks and balances thus compromising on
fairness.
Lack of transparency and accountability: The
PSP has substantial financial interest in the
project, risking transparency, accountability,
liability, neutrality and fairness of the process.
Often developers have expressed their struggle
with the architects over the fees rather than
having issues with the LA in obtaining the CCC.
This suggests that some developers would rather
deal with the LA that they knew rather than paying
fees to the consultants which might be higher.
URGENT NEED TO SET UP OF A TASK
FORCE
Due to the problems inherent in the CCC system,
the Malaysian construction industry is in dire need
of a revamp. As such, it is recommended that a
Task Force be set up involving all the relevant
parties to address these issues, and to propose
solutions and improvements to the system which
may include the following amongst others:
Revert to the earlier regime where the LA holds
liability
The bulk of the liability should rightfully rest
with the LA as was the case under the previous
regime. At the outset, it would seem that the
PSP carries similar liabilities as the qualified
person in the previous CFO regime in terms of
civil liability. This view is a fallacy. The PSP holds
more administrative obligations, is more reliant
on employers for help and are also liable to
other interested parties under the CCC regime.
This system should immediately be revamped
or reverted to the previous system in which the
liability was fairly set out.
Statutory regulation of contractors
For the CCC procedure to be well executed, all
parties should also be statutorily regulated in
terms of registration, conduct and practice. Under
the current procedure, such breaches are met
merely by the developer or vendor withholding
payments contractually due, imposing liquidated
and ascertained damages (LAD). Much work needs
to be done in this area to curb this deficiency.
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Need for independent complaints body
It is important to have a positive political will on the
part of the authorities and respective professional
boards to reassure the public that all complaints
are properly managed and investigated in a
transparent manner. If public confidence cannot
be restored by such mechanisms, it will then be
imperative for authorities to set up an independent
body for necessary checks and balances.
Professional bodies disciplinary proceedings
Recent strengthening of the disciplinary
proceedings vis-à-vis any complaint pertaining
to breach of the CCC procedure has become an
answer to the public’s fears. This, however, has
not attempted to assuage any of the concerns
of the public as they tend to view the disciplinary
proceedings as a mere internal process.
The above suggestions are not exhaustive,
but are only some of the issues that should be
thoroughly considered. A more comprehensive
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Newly completed apartments
study and report thereof must be conducted by a
Task Force.
CONCLUSION
The CCC system strives to eradicate the inadequacies
of the CFO regime that it replaced. The success
of the same largely depended on the ability of the
professionals to co-ordinate the activities of the
many parties involved in any construction project.
However standing witness to the 10 years the CCC
system has been in play and the plethora of case
laws it is safe to say that the time is ripe for a push
back and dismantling of the present system.
The CCC system has a number of deficiencies
that are substantive in nature, as mentioned
above. If these deficiencies are not addressed,
they can potentially compromise and derail
the very objective of the CCC to overcome the
deficiencies of the CFO system.
APPENDIX
Tabular Representation Of Previous And Current Regimes
Sr. Subject CFO
i. Effective date Replaced by CCC - redundant
ii. Applicability The CFO system continues to apply
where:
a) work of ere c tion has not
commenced within 12 months
from date on which plans and
specifications of building were
approved; if work commenced
on or af ter April 12, 2007
(Commencement Date),
b) work suspended immediately
before coming into operation of
Act and is to resume on or after
Commencement Date; and
c) erection of building without
approval of plans and
specifications by the LA under
the Act immediately before
Commencement Date provided
that an application for approval is
made to the local authorities on or
after Commencement Date and the
application is approved.
iii. Vacant Under CFO homebuyers used
Possession to receive the house keys (upon
submission of Form E) but could not
move into the houses because the
CFO had not been issued.
iv. Effective The Qualified Person had a statutory
change in duty and responsibility to supervise
responsibilities the erection of the building to ensure
that the erection was in conformance
with the approved conditions under
SBDA and the by-laws and that all
technical conditions that had been
imposed by the local authority had
been duly complied with and that
the building was safe and fit for
occupation.
CCC
12th April 2007
CCC can only be issued for projects
that have obtained their Building
Plan approvals after 12th April 2007.
There are six essential services for the
issuance of CCC:
●● Confirmation of electrical supply
(TNB)
●● Confirmation of water supply (water
authorities)
●● Confirmation of connection to a
sewerage treatment plant or mains
supply (JPP)
●● Clearance from lifts and machinery
department, if applicable (JKKP)
●● Clearances for active firefighting
systems except for residential
buildings not more than 18m high)
(Bomba)
●● Roads & Drainage
The CCC system ensures that Vacant
Possession (VP) can be issued together
with CCC.
The PSP has two-pronged duties – i) to
employer to ensure that the contractor
has executed the works in compliance
with the particular building contract ; ii)
he has to ensure that all the prescribed
Forms G1 to G21 in respect of stage
certifications have been duly certified
by the respective parties and received
by him. Upon issuance of the CCC, the
PSP accepts full responsibility for the
issuance of the said certificate and he
certifies that the building is safe and fit
for occupation
The PSP also has added responsibilities
as compared to the Qualified person
under the CFO regime.
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Sr. Subject CFO CCC

v. Civil liability The Qualified Person had the duty
of care both under his professional
services agreement and the law of
tort to his employer. Civil suits could
be filed against the local authorities
however, they were given immunity
under section 95(2) of Street,
Drainage and Building Act.
vi. Governing Certificate of Fitness for Occupation
authority (CFO) was issued by the local
authority.
vii. Procedure ●● Building plan approval
●● Plan submission by the Qualified ie, for Building Plan Approval, Earthworks
Person
●● Notification prior to commencement regime other than the introduction of the
of work
●● Obligations of the Qualified Person
●● Authority inspection
●● Certification by the Qualified Person
●● Confirmation from LA
●● C er ti f ic ate of f i tne s s and
occupation
viii. Flexibility while The Local Authorities as the ultimate
implementation issuers of the relevant CFOs, had the no such power, even in regard to the
necessary power to review the non-
technical and technical conditions
prior to the issue of the CFOs and,
in some cases, grant waivers,
exemptions or dispensations as
necessary.
ix. Non-obstante
clause
x. Statutory Local authorities enjoyed wide
liability statutory protection given to them
under Section 95(2) of the SDBA.
PSP is liable for the CCC being issued
wrongly, for failing to deposit the CCC,
non- compliance with the approved
plans and provisions of the SBDA or any
by-laws made thereunder.
The CCC is issued by the project’s PSP,
who can be a Professional Architect,
Professional Engineer or a Registered
Building Draughtsman.
The initial steps of the approval process
Approval, etc are similar to the CFO
PSP.
With self-certification, the PSP has
technical conditions. For non-technical
conditions the Local Authorities still
retain some residual power but their
ambit remains ambiguous.
Under the CCC regime, authority for the
issuance of the relevant completion
certificate has been shifted from the
local authorities to the professionals, the
former nevertheless retain a significant
statutory power, either by default or On a
residual basis. Refer 70(22) of the SBDA
(Amendment) Act 2007.
Recent amendments to the relevant laws
and in Particular to the SDBA, impose
additional duties and responsibilities
on the PSP with attendant sanctions
which are heavier in terms of nature and
content for example custodial/penal in
certain instances. Section 70(27)

SBDA (Amendment) Act 2007 provides

for an imprisonment of up to 10 years
where the PSP permits to be occupied
any building without a CCC.

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 Response by the Board of
Engineers, Malaysia
Datuk Professor Sundra Rajoo (DPSR) stated that his aim in writing the above report
was to present an objective analysis of the implementation of the Certificate of
Completion and Compliance (CCC) since April 2007. He drew comparisons between
the Certificate of Fitness for Occupation (CFO) under the old regime when Local
Authorities (LA) issued CFO after submission of Form E by the Submitting Person
(Architect or Engineer depending on the project type) and the present regime of
CCC where Form F (replacing CFO) is issued by Architect or Engineer now called the
Principal Submitting Person (PSP) and must be supported by 21 Form Gs signed by
the Contractors/ Tradesmen and Submitting Persons for the respective works.

From his analysis, it would appear he may have
been misinformed, fed wrong assumptions,
displayed a lack of knowledge of the CCC
process and even appeared confused with
other processes which are not part of the CCC
process. There is also an inconsistency in his
assertions that Local Authorities (LAs) carry no
liability (with immunity given) but yet he later
contradicted himself by stating a need for LAs to
resume liability. His premise that the CCC was first
mooted by the Government after being prompted
by apprehensions of a loss of votes at the ballot
box is certainly flawed especially when the Prime
Minister Abdullah Badawi’s administration was at
that time enjoying a very strong electoral victory in
his first term of office. He had completely missed
the motivating point that it was Malaysia’s loss
in competitiveness in the global economy due
to the long bureaucratic delays in CFO issuance
for satisfactorily completed projects which drove
the government into taking the bold step in going
for self-regulation/self-certification and CCC
issuance under the control of professionals.
The non-technical requirements imposed by
LAs which often jammed up the whole CFO
delivery process were taken out completely to be
resolved separately. The CCC issuance then only
focused on the health and safety aspects of the
project completion and can be readily certified
by professionals without any problem. This was
particularly critical for industrial projects where
every month the project is delayed is a big loss for
the factories producing goods for the economy. It
also creates uncertainty to investors and this has
caused some potential investors to choose other
regions with more efficient delivery of CFOs to set
up their manufacturing plants. Furthermore, his
comment that the proponents of the CCC were the
few professionals with vested interests was not
substantiated with facts.
He was not aware that it was the Government
which gave the challenge for the professionals
to be self-regulating to help the country to move
forward and the Architects and the Engineers
readily stepped up to this national call of duty.
However, this is not an entirely new concept, as
at that time self-regulation was already being
practiced on a small scale for bungalow projects
from 2002. The Government recognised that
there are always some black sheep among the
professionals and called for the various laws
and regulations to be tightened up to weed them
out eventually. DPSR must recognise that the
Architect Act and Registration of Engineers Act
are Acts enacted to protect public interest and
hence accepting liabilities is considered part and
parcel of being a professional. It was also indeed
considered an honour for the professionals
to serve the nation in this way and those who
practise their work professionally have no fear of

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 INGENIEUR
transgressing any of the regulations already put in
place albeit with increased penalties.
DPSR argued that the arduous strict liabilities
vested upon the PSP, residual powers of the LAs,
ambiguity in approach and the lack of effective
check and balance mechanisms in the process
of issuing of CCC are major flaws of the CCC
regime. He postulated that the CCC regime will
meet with an eventual implosion and he strongly
recommended the CFO to be reinstated to its
former ‘glory’. He even recommended a task force
to be set up to bring back the CFO regime.
BEM, being the regulatory body of professional
engineers involved in the CCC regime has
a different view. The CCC regime has been
considered a success story so far after more
than 10 years of monitoring. The CCC regime has
speeded up tremendously the vacant possession
of all developments in the country and for them
not to be subjected to the whim and fancy of those
in authority for the issuance of the CFO. There may
have been some hiccups at the beginning when
the Engineers were still on the learning curve
but generally most have been conforming to the
regulatory requirements. The real challenge was
how to deal with wayward officers in various LAs
who insisted on their own ways or insidiously
wanting the power to be returned to them to
control the CCC outcome although the CCC
delivery process had been clearly spelled out
by the Ministry of Urban Wellbeing, Housing and
Local Government (KPKT) in their guidelines for
all States in Peninsular Malaysia to follow. This is
basically a State-Federal structural problem that
we have to contend with and it will never go away.
The problem is repeated again when new officers
are appointed to a LA who has to be educated
all over again on the rationale and process of
CCC issuance. However careful and continual
management of this problem is needed to mitigate
its effects. Some of the pertinent issues as
highlighted by DPSR are explored below.
1. THE ISSUE OF ARDUOUS STRICT
LIABILITIES VESTED UPON PSP
a. In the CFO regime, only the Submitting
Person for building plans (SP) signed Form
E to the LA stating that he had supervised
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the project and it met all the requirements
the authority stipulated before the
LA considered issuing the CFO. CFO
issuances were frequently delayed due to
non-technical requirements imposed on
the developers. Did the LA assume liability
for issuing the CFO? The answer is No as
borne out in the case of the Highland
Tower Condo collapse in which the LA
issued the CFO for the project. The High
Court judgment assigned no liability to the
LA and ruled that they had full immunity
as per section 95 of the Street, Drainage
and Building Act. There is no basis to say
that the LA could take on some of the
liabilities from the professionals under the
CCC regime to relieve the liabilities vested
on the PSP.
However the PSP under the CCC regime
must obtain all 21 Form Gs duly signed by
the respective contractors/tradesmen and
submitting persons on the forms before he
is permitted to issue Form F (Certificate of
Completion and Compliance). This matrix of
responsibilities will ensure all stakeholders
in the CCC issuance process to be
accountable. This in a way has mitigated the
liabilities of the PSP in that the regulating
authorities (including utility agencies) can
go after the actual person responsible for
certain shortcomings or failures. The PSP
would be responsible for failing to check for
fraudulent SPs or contractors in the Form Gs
submission which is not as onerous as DPSR
has made it out to be. The procedures for
filling out the Form Gs are clearly laid out in
the Board’s website and those professionals
who cannot follow simple instructions should
not be in this business.
b. Liability under the Streets, Drainage &
Building Act (SDBA) and Uniform Building
By-Laws (UBBL)
The Act and By-Laws contain stringent
penalties for fraudulent certifications,
allowing occupation without a CCC in
cases where the building is not safe, false
declarations, etc. are justified for the sake of
public interest. The penalty sum is nothing
 in comparison with the value of even one
life lost from a fraudulent, careless or
unprofessional act. Professionals taking
on the task of CCC issuance cannot take
their responsibility lightly. Fortunately such
incidences are very few and far between
and disciplinary actions meted out have
been largely carried out by the respective
Boards which resulted in only the worst
case situation where the guilty parties were
deregistered.
c. Liability under Housing Development
The penalty for over certification of
progress payments has nothing to do with
the CCC process. The person in charge of
contract administration happens to be the
PSP in the CCC regime, the SP in the CFO
regime could similarly have been in charge.
Hence to attribute this increased liability to
the PSP because of the introduction of the
CCC regime is misplaced.
d. Liability under BEM
The of fenc e s c ommi t te d by the
Engineers are classified broadly under
two categories. One is procedural in
nature, such as submission on time,
forms properly filled, dated and signed
by the right parties. The other category
is fraudulent Engineers, Engineers not
registered to practice, fraudulent acts and
other unethical issues.
The Board has been very gentle on those
committing procedural offences and have
given ample warnings before disciplinary
proceedings were started on recalcitrant
Engineers. Forms wrongly completed
were asked to be replaced with correct
ones without penalty. Those without an
Engineering Consulting Practice (ECP) were
asked to register one immediately. However
with the current Form Gs submissions,
the Board was able to uncover fraudulent
Engineers who were reported to the police,
forged signatories, Engineers practicing
in the wrong disciplines, moonlighting
activities, etc.
The Board received 4,910 CCC submissions
up to January 2018, out of which we
have 350 late submissions, 313 wrong
endorsements, 169 submissions not
through the ECP and 118 submissions
without Form G. So far, we have only 21
cases being investigated. The following
disciplinary actions were already meted out
with four Engineers deregistered, seven
reprimanded, 12 reprimanded and fined,
and one fined, reprimanded and suspended.
On the whole the number of Engineers
being investigated and disciplined for CCC
offences was small in percentage and by
and large their liability on CCC matters have
not gone up exponentially as claimed. The
Board is not aware of any known case of
double jeopardy of the PSP being charged
for the same CCC offence under different
Laws and Regulations by different bodies
as other bodies almost left it entirely for
the Board to discipline the Engineers. The
penalties in terms of fines for CCC offences
are stipulated in the Act, but the fine is
seldom imposed to the maximum sum
depending on the severity of the offence
committed.
2. THE ISSUE OF CIVIL LIABILITY OF PSP
a. Increase in Administrative Role
The CCC documentation process is
merely an enhancement of the contract
administration role that the PSP is
entrusted with to ensure the project is
completed on time and to the required
standards. It is a useful tool to bring all
parties in a project to do the needful and to
document the completion stage in a similar
manner to a QAQC or ISO 9001 process in
order to achieve satisfactory compliance.
Making every party accountable for their
work is a worthwhile effort by the PSP.
b. PSP reliant on Employer for help
The employer should have no qualms
for helping out the PSP to make sure his
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 INGENIEUR
contracted parties are aligned to the
common objective in achieving the CCC.
In fact he should be the driver behind to
ensure the CCC is issued early in his best
interests.
c. PSP liable to other Interested Parties
Other parties such as purchasers are mainly
interested in the quality, non-defective and
timely deliverance of vacant possession of
building. These issues are the reflection on
how the contractor performed according to
the contractual requirements and it has very
little bearing on the role of the PSP in CCC
matters from the perspective of interested
third parties. These are contractual issues
and should not to be confused with CCC
issues. Complaints are mainly on defects
or defective design. Complaints on the
premature issuance of a CCC can be
considered the main contentious issue
especially for turnkey projects.
d. The PSP has no immunity
The argument that the PSP in the CCC
regime or the SP in CFO regime has never
had immunity from the law is not valid
ground to repudiate the CCC regime.
3. INADEQUACIES OF THE CCC
PROCEDURE
a. Lack of checks and balances
DPSR’s statement that the PSP enjoys the
total freedom to design, produce plans and
documents without having to obtain prior
approval from the LA demonstrated his total
lack of knowledge of the building approval
process. Though these precede the CCC
process, does he not know about the need
for Planning Approval (Development Order)
and Building Plan Approval to be obtained
first before construction work can proceed
at site?
BEM obviously provides the checks and
balances in the CCC issuance by the
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Engineers. Every CCC submission is
scrutinised for its correctness and validity.
There is no room for a biased decision.
If the PSP has favoured the Developer
and issued the CCC before all works
were completed and all health and safety
requirements complied with, then the
affected parties could complain to the
Board about the unprofessional conduct
of the Engineer. If a prima facie case is
established, an investigating committee
will be formed to investigate the complaint.
If there are grounds for the Engineer to
be disciplined, he has to go for a hearing
before the Disciplinary Committee (DC). The
DC shall determine whether he is guilty or
not and mete out any punishment deemed
appropriate. The guilty party has the right to
appeal to the Appeal Board.
b. Lack of transparency and accountability
DPSR seems to advocate that a developer
with good connections with the LA and with
the ability to lubricate the issuance process
under the CFO regime is the better option
than paying the supposedly higher fees of
the PSP who are the architects in housing
schemes, under the CCC regime. What DPSR
advocated could also be the contributing
factor why some projects that have not been
similarly conceived, experienced delays due
to such practices in the CFO regime. The PSP
has certainly no such clout to be equated
as an authority to demand higher fees, but
being a professional he may be the one
frustrating a developer desiring premature
CCC issuance to maximise his profits. A PSP
succumbing or colluding to the demands of
a developer for premature CCC issuance
will be severely disciplined by the Board.
Hence DPSR’s logic of better transparency,
accountability, liability, neutrality and
fairness of the CFO process does not hold
any water at all, bearing in mind it was the
Government’s intention to weed out corrupt
practices in the LA when the CCC regime
was first mooted. PSPs regulated by the
Boards are deemed more trustworthy to
do a proper professional job. The question
 of higher fees does not arise at all for the
CCC regime if the Scale of Fees is adopted
judicially as mandated by the Boards. In fact
the reverse is true when many PSPs have
lamented about their professional fees being
frequently squeezed down by developers.
c. Non-technical issues left unaddressed
Non-technical issues such as Bumiputera
quota fulfilment, should never be used
to cloud the issuance of a CCC for the
sake of other deserving and longsuffering
purchasers. The Government earlier agreed
to take this contentious factor out of the
CCC issuance in order to speed up the
entire process. The PSP should actually be
very relieved for not being held responsible
for resolving non-technical issues, contrary
to what was expected by DPSR. Resolution
of non-technical issues is strictly between
the developer and the LA, with no
involvement of the PSP.
d. No quality control mechanism
The issue of quality of the building
construction is not within the scope of the
CCC regime and neither was it in the CFO
regime. This is a contractual issue to be
resolved by arbitration or litigation by the
relevant affected parties.
e. Lack of flexibility in implementation
The same change of circumstances of a
project will affect the Building Plan approval
process rather than the CCC process which
is also no different from the CFO process.
However, the CCC process allows for partial
completion using Form F1 if the partial
completion is planned early and submitted
in the Building approval process. Any
variation to the phases to be completed can
be changed by resubmitting the Building
Plans for approval. Hence this claim of lack
of flexibility in implementation revealed
the lack of understanding by DPSR on the
whole building approval process.
f. Consultants’ Site Supervisors not included
in CCC procedure
The preclusion of Site Supervisors from
the CCC procedure was an initial setback
when the AG chambers removed the Site
Supervisors from the Form Gs as they were
not registered then and could not be held
accountable. However even without their
participation, the Engineers have taken
on the responsibility to vouch for the site
supervision work, with only a few cases
of poor supervision being reported to the
Board. The Registration of Engineers,
Malaysia Act 1967 was amended in 2015
to register the Inspector of Works (IOW)
and the Board is still in the process of
registering IOWs who work as the site
supervisors. Dialogue will be made with
KPKT to include IOW signatories on the
UBBL Form Gs in the near future.
g. Matrix of responsibility not effective
The Board need not register contractors,
sub-contractors and tradesmen to make
the matrix of responsibility effective. They
are already registered with CIDB, SPAN,
ST, IWK and other bodies regulating them.
When they signed on the Form Gs, their
names and registration numbers are
recorded and they can be held accountable
for their scope of work. Any complaints
can be made to the respective regulating
bodies.
h. Ambiguity in approach
There is no ambiguity in approach
in the CCC regime. The breaches in
understanding the CCC process by certain
LAs are isolated occurrences by wayward
officers who insist on doing it their way.
They have been reminded time and again
by KPKT to toe the line. This is a structural
problem involving the State following
Federal directives on CCC and constant
education on CCC amongst LA officers is
a necessity. KPKT made the ruling that if
the SP has complied with everything the
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 INGENIEUR
LA has asked for and the submission for
their consent has been made then it is
deemed approved if no response from the
LA officer is forthcoming within 14 days.
The SP can proceed to sign off the relevant
Form G. PSPs encountering problems with
any LA imposing their own rules are to
report to BEM for further action.
4. NEED FOR LAs TO RESUME LIABILITY
There is no need to delve further into this issue
of LA resuming liability as they were never
liable in the first place. Trying to put liability on
the LA is a futile effort and this thought should
be dismissed immediately.
6. CONCLUSION
5. URGENT NEED IN SETTING UP OF A
TASK FORCE
a. There is no need to set up a task force as
there is no need to revert to the CFO regime.
b. DPSR should raise the issue of regulating
individuals on the contractors side with
CIDB. The CIDB Board is well aware of the
constant requests from the professional
side since CCC inception that individually
named contractors who are site agents
and not corporations should be held
accountable for their actions in construction
projects. It is difficult to blacklist a non-
performing contractor company as their
directors can easily close the company
down and open another one to circumvent
any blacklisting.
c. There is also no need for independent
complaints body as the Engineer Board and
the Architect Board are regulatory bodies
constituted by Acts of Parliament. It is their
statutory duty to act independently to hear
any complaints and discipline Engineers or
Architects respectively. DPSR’s assertion
that these disciplinary actions are internal
processes and hence cannot be trusted is
a fallacy. This is unlike a disciplinary staff
proceedings in a company. These disciplinary
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proceedings in the respective Boards are
empowered by an Act of the Parliament and
Investigating Committees are to be totally
independent and their findings cannot be
changed by any other parties. Furthermore,
Disciplinary Committees are constituted
according to the law to conduct hearings on
professional misconduct. Legal counsels can
accompany respondents in a hearing and all
charges are made known to them for their
defence. Those found guilty of misconduct
have the avenue to appeal to the Appeal
Board if so desired by the respondents. So
why is there a need for another independent
complaints body?
DPSR has not presented a convincing case
to dismantle the CCC regime and revert to
the CFO regime. The few cases presented
by him will still be there with or without CCC.
There may have been some problems in
the implementation of CCC but these have
been resolved through constant reminders,
roadshows, Frequently Asked Questions (FAQ),
education, dialogues with authorities and
disciplinary actions. The CCC process is still
under control and has improved over the years
of implementation with better understanding
by all stakeholders on what must be done.
The benefits of having CCC are manifold such
as:-
a. Faster CCC issuance as compared with
CFOs.
b. The matrix of responsibility with the use of
Form Gs has identified and held all parties
in the project accountable for their actions.
c. Fraudulent Engineers, contractors and
tradesmen have been uncovered with the
issuance of Form Gs.
d. There is greater recognition of the role
being played by the PSP (Engineers and
Architects) to assist the nation in moving
forward.
e. The introduction of CCC as self-certification
has helped the nation to improve the ‘ease
of doing business’ ranking by World Bank.
Ancient Construction
Marvel of Wutaishan
and Hanging Temple of
Hengshan, China
By Chin Siew Yin
A
ny trip to Wutaishan would be incomplete
without visiting the famed Hanging Temple
of Hengshan which is not far away and
shares the same geological setting of the Trans-
North China Belt (TNCB), consisting of several
lithological, metamorphic and structural units.
Geologists are still arguing about the
ENGINEERING FEATURES
One of the temple buildings at Wutaishan
relationship between the Hengshan, Wutaishan
and Fuping lithotectonic complexes, the structural,
magmatic and metamorphic histories of these
complexes and the timing of the orogenic event
that resulted in the closure of ocean between
the Western and Eastern blocks that divided the
Archean North China craton.
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Wutaishan

The term Wutaishan means five peaks and they

consist of five flat-topped mountains surrounding
a plateau. From an early date, the plateau and its
surrounding mountains have attracted numerous
Buddhist temples and monasteries. Wutaishan’s
history flourished during the Tang period, around
the seventh and eighth centuries A.D., though
most of them were rebuilt and re-organised during
the Ming and early Qing dynasties, in the 14th to
17th centuries A.D.
As host to over 53 sacred monasteries, Mount
Wutai is home to many of China’s most important
monasteries and temples. It was recognised as
a UNESCO World Heritage Site in 2009 and named
an “AAAAA tourist attraction” by China’s National
Tourism Administration in 2007.
Most parts of Wutaishan are covered with snow.
Mount Wutai is home to some of the  oldest
wooden buildings in China  that have survived
since the era of the  Tang Dynasty  (618–907 narrow corridors, which can get very crowded in
A.D.). This includes the main hall of  Nanchan summer. It’s a sight to behold, but we hear that
Temple  and the East Hall of  Foguang Temple, the access up into the monastery itself might
built in 782 A.D. and 857 A.D., respectively. They (understandably) eventually be closed owing to the
were discovered in 1937 and 1938 by a team large number of visitors.
of architectural historians. The architectural Another masterpiece of ancient Chinese
designs of these buildings have since been wooden architecture, it was built on the near
studied by leading  sinologists  and experts in vertical cliff and rated as one of the ten most
traditional Chinese architecture, such as Nancy dangerous buildings in the world by Time
Steinhardt. Steinhardt classified these buildings Magazine. Its 40 wooden houses are connected
according to the hall types featured in the Yingzao by plank roads and wooden spiral stairs, and
Fashi Chinese building manual written in the 12th supported by dozens of timber pillars. Despite
century. enduring more than 1,400 years exposed to the
rain and wind, and having suffered dozens of
quakes, the Hanging Temple survives, and has
Hanging Temple of Hengshan become an architectural wonder of history.

The Hanging Temple of Hengshan, located about

60km southeast of Datong, China, in the Shanxi
province, is one of the world’s forgotten wonders.
The temple is said to have been built by a monk
named Liao Ran during the late Northern Wei
Dynasty (386-534 A.D.) and restored in 1900.
It was constructed by drilling holes into the cliffside
into which the poles that hold up the temples are
set.
Built precariously into the side of a cliff, the
Buddhist Hanging Monastery is made all the
more stunning by its long support stilts. The
halls have been built along the contours of the The geologic formation of cliffs surrounding the
cliff face, connected by rickety catwalks and Hanging Temple.

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View of South and North pavillions linked by the Long Bridge.

Construction of the Hanging Temple

Suspended some  50m (160ft) above the

ground,  the Hanging Monastery was actually
constructed without the help of the wooden pillars
that now appear to support it.
When the monastery was built the pillars
weren’t here, but were only added later because
many people would not dare to climb up to the
monastery, worrying it would fall. The pillars can
even be taken away without affecting the Hanging
Monastery.
Thanks to the excellent workmanship and
building technique, the monastery has been very
safe for 1,500 years, without any pillars.

The wooden pillars propping up the temple

Two Pavilions and a Bridge structure.

The Hanging Monastery consists of two pavilions,

a bridge, and 40 halls. It is 32m long in total.

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Supporting props beneath the Long Bridge.

●●The South Pavilion  is three-stories high, religion was prevalent at that time, and people
8m (26ft) long and 4m wide. This pavilion were reluctant to stop at places that worshipped
holds the biggest hall and the tallest a different religion, the Hanging Monastery
sculptures of the temple. enshrined China’s three major religions so that
●● The North Pavilion  is also three-stories more travellers could stay there.
high, 4m in width, but 7m (23ft) in length.
Inside this pavilion a typical hall on the third
floor holds statues of the three classical
Chinese religious founders: Confucius
on the left, Lao-Tze on the right, and
Sakyamuni in the center.
●● The Long Bridge connecting the two
pavilions, is about 10m (30ft) long. There
is a pavilion above the bridge with a hall for
worshiping statues.
The Hanging Monastery is the only monastery
in China enshrining three religions — Buddhism,
Taoism, and Confucianism. The temple boasts
a fine collection of religious statues, 80 in all
including statues in bronze, iron, terracotta, and
stone. All are remarkably true-to-life.
The most outstanding feature of the Hanging
Monastery is the side-by-side sculptures of Lao-
Tze, Confucius, and Sakyamuni — the founders
of the three main religions of China: Taoism,
Confucianism, and Buddhism, respectively.
Due to its relatively remote location, the
Hanging Monastery  served as sort of a travel Wooden stairs are protected with metal plates
lodge  — a rest stop for travellers. Because against wear and tear from human traffic.
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Muar Bridge Opened to
Traffic in 1967
By Cheo Hong Keyong
The Muar Bridge, constructed in 1965 and
completed in 1967, was built to replace the ferry
services plying between Muar town on one side
and Tanjung Agas on the opposite bank. The old
ferry services began operation in 1890 using the
landing facilities at Penambang Ferry Terminal.
To complete this bridge, four pontoons were
used to carry concrete mixers, cement, sand and
cranes weighing up to 120 tons with 50-ton lift in
which a total of two piers were built specifically to
fit the mould of concrete beams.
ENGINEERING NOSTALGIA
Photo courtesy of Jabatan Penerangan Malaysia
The bridge was built on 48 piles of special
steel imported from Germany and 82 reinforced
concrete piles. It is estimated that more than
9,000 m 3 of concrete, 2,100 tons of steel
and a workforce of 130 were used during the
construction of the bridge.
The Muar Bridge was officially opened by
Sultan Ismail of Johor on April 16, 1967 and was
officially named as the “Sultan Ismail Bridge”.
REFERENCE: Wikipedia
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