PRESENTATION BY MR MATTHEW TEE, MBAM PRESIDENT FOR CIOB NOVUS MALAYSIA 2013

MBAM

THE ROLES AND CHALLENGES OF BUILDERS IN THE BUILDING PROCESS 27TH OCTOBER 2013, SUNDAY

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MBAM

CONTENT
1)About MBAM 2)Overview of the Malaysian Construction Industry 3)Roles of Builders in the Building Process 4)Key Issues and Challenges of Builders in Malaysia

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ABOUT MBAM
MBAM

 A prominent national Construction Trade Association in Malaysia, founded in 1954.  Being The Prime Mover and The Recognized Voice of The Malaysian Construction Industry, MBAM is actively initiating, supporting and participating in activities that enhance professionalism, productivity, quality and development of the construction industry.

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ABOUT MBAM
MBAM

 Has earned international recognition and prominence through its affiliation with the International Federation of Asian and Western Pacific Contractors’ Associations (IFAWPCA) and ASEAN Constructors Federation (ACF).  MBAM is currently chairing the Finance Committee of IFAWPCA and is one of the cofounder members of ACF.

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 TO PROMOTE measures aimed at securing improvements pertaining to techniques.MBAM OBJECTIVES  TO PROMOTE AND COORDINATE development of the construction industry. MBAM 5 . procedures and methods in the construction industry.

6 . symposia.MBAM OBJECTIVES MBAM  TO ORGANIZE training programmes. conferences. conventions.  TO IDENTIFY AND STUDY problems arising in the construction industry. seminars. to discuss and explore solutions with the relevant Government authorities and professional institutions. exhibitions and expositions related to the construction industry.

MBAM  TO ENCOURAGE AND PROMOTE the practice of professionalism and harmonious working relationships 7 .MBAM OBJECTIVES  TO PROTECT the legitimate interest of members and the construction industry.

MBAM MEMBERSHIP    MBAM Has grown to more than 630 direct and 5000 indirect and affiliated members. 8 .80% of the construction works in the country are undertaken by MBAM members. 89% of listed construction companies on the Bursa Malaysia are MBAM members. 70% .

BERHAD IGB CORPORATION BERHAD IREKA CORPORATION BERHAD JETSON BERHAD KEMAJUAN AMOY BERHAD LOH & LOH CORPORATION BHD LOW KENG HUAT BERHAD MERGE ENERGY BERHAD METRO KAJANG BERHAD 9 .Members Listed on Bursa Malaysia AHMAD ZAKI RESOURCES BERHAD BINA PURI BERHAD CAHYA MATA SARAWAK BERHAD CWORKS SYSTEM BERHAD EASTBOURNE CORPORATION BERHAD EMAS KIARA INDUSTRIES BERHAD EVERSENDAI CORPORATION BERHAD FAVELLE FAVCO BERHAD GAMUDA BERHAD GLOMAC BERHAD HUME INDUSTRIES (MALAYSIA) BERHAD IJM CORPORATION BERHAD INDUSTRIAL CONCRETE PRODUCTS BERHAD KEN HOLDINGS BERHAD LION FOREST INDUSTRIES BERHAD LFE CORPORATION BERHAD MAGNA PRIMA BERHAD METRONIC GLOBAL BERHAD BINA GOODYEAR BHD MBAM BREM HOLDINGS BERHAD CREST BUILDER HOLDINGS BERHAD DOLOMITE CORPORATION BERHAD EKOVEST BERHAD ENCORP BERHAD FAJARBARU BUILDER GROUP BERHAD GADANG HOLDINGS BERHAD GEORGE KENT (MALAYSIA) BERHAD HO HUP CONSTRUCTION CO.

Members Listed on Bursa Malaysia MBAM MINETECH RESOURCES BERHAD MUDAJAYA GROUP BERHAD MTD ACPI ENGINEERING BERHAD NAM FATT CORPORATION BERHAD PASUKHAS GROUP BERHAD PKNS INFRA BERHAD PUTRA PERDANA BERHAD PRINSIPTEK CORPORATION BERHAD SALCON ENGINEERING BERHAD SPK BERHAD SUNWAY BERHAD TRC SYNERGY BERHAD UEM BUILDERS BERHAD VTI VINTAGE BERHAD YNH PROPERTY BERHAD WOODLANDOR HOLDINGS BERHAD ZEKON BERHAD MITRAJAYA HOLDINGS BERHAD MUHIBBAH ENGINEERING BERHAD NAIM HOLDINGS BERHAD PARAMOUNT CORPORATION BERHAD PILECON ENGINEERING BERHAD PLB ENGINEERING BERHAD PJ DEVELOPMENT HOLDINGS BERHAD PROTASCO BERHAD SENTORIA GROUP BERHAD SP SETIA BERHAD SYCAL BERHAD TRI PLC BERHAD UMW HOLDINGS BERHAD WCT BERHAD YTL CORPORATION BERHAD ZELAN BERHAD 10 .

Contractor Associations:Indian Contractors Association Malaysia Johor Master Builders Association Selangor & Federal Territory of Kuala Lumpur Kin Cho Hong Terengganu Kin Cho Hong Malacca Building Contractors Association Penang Master Builders & Building Materials Dealer Association Persatuan Pemborong & Pembekal Barang-Barang Bangunan Kedah Port Dickson Builders Association Selangor & Federal Territory Builders Association Segamat Builders Association Sabah Builders Association Sarawak Building & Civil Engineering Contractors Association Sarawak Sibu Division Building & Civil Engineering Contractors Association Other Related Trade Associations:Malaysian Mobile Crane Owners Association Malaysia Quarry Association National Ready-Mixed Concrete Association The Lighthouse Club The Malaysian Lift and Escalator Association 11 .Affiliate Members MBAM MBAM Affiliate Members consists of our counterpart from various states in Malaysia and other related trade organizations in Malaysia.

surveyors (RISM). consultants (ACEM) and planners (MPI). engineers (IEM).MBAM INVOLVEMENT MBAM Building Industry President’s Council (BIPC)   MBAM is one of the founding members of BIPC which provides a forum for Presidents of professional institutions and associations to discuss and formulate solutions on industry related issues. BIPC consists leaders from the contractors (MBAM). architects (PAM). developers (REHDA). 12 .

MBAM Overview of the Malaysian Construction Industry 13 .

9 4.9 4.2 5.4 5.6 7.2 3.1 6.3 -5.3 Manufacturing -5.7 18.5 2.6 -1.3 3.7 4.0 0.6 7.4 2. 2013 Real GDP 0.1 14.3 Services 5.4 Mining -0.7 7.4 5.9 4.4 -1.2 8.8 4.0 2.9 6.8 -3.1 5.7 6.9 4.Overview of Malaysian Construction Industry Sustainable Construction Growth First Quarter.6 4.9 3.4 4.8 4.8 -0.7 11.5 5.8 1.8 5.1 2.3 11.8 3.9 Source: BNM Yearly Reports 14 .1 7.1 4.9 -1.1 Construction 2.2 9.8 3.1 5.4 2. 2013 MBAM Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Second Quarter.8 0.1 -0.9 -1.1 1.0 6.0 8.8 Agriculture -0.3 2.6 -0.0 6.1 5.7 4.4 5.8 4.5 5.5 6.8 -0.3 4.3 7.3 4.8 0.2 -0.4 9.1 5.5 6.0 5.3 -0.4 7.5 1.1 4.3 1.

11 122.720.48 99.6 4.312.277.83 85.3 4.1 5.9 6.3 4.4 5.2 5.3 GDP 2004 2005 2006 2007 2008 2009 2010 2011 2012 1st Q.08 74.1 5.644.78 48.7 7.88 (%) 0.3 Nil 15 Source: CIDB Quarterly Statistical Bulletin .694.008.432.08 60.416. 2013 2nd Q.601.65 91.837.559.913.1 5.59 31. 2013 52.739.36 54.Overview of Malaysian Construction Industry MBAM Total Projects Value Year (RM mil) 2001 2002 2003 51.49 24.926.6 -1.541.55 49.1 4.99 94.38 10.75 7. 2013 3rd Q.

0 6.000 0.000 120.000 4.0 40. 3rd Q.Overview of Malaysian Construction Industry MBAM TOTAL CONSTRUCTION PROJECTS VALUE VS GDP 140.0 GDP (%) -4.0 100.000 Total Projects Value (RM mil) 8. 2nd Q.0 60.000 2.000 20.0 Year / Quarter Total Projects Value (RM mil) GDP (%) 16 .0 80. 2013 2013 2013 -2.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1st Q.

25 3.694.86 144.331 1.69 16.79 5.18 29.432 59.745 3.146.331. 2013 Status of Contractors Year Total Number of Projects Total Project Value (RM m) No 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4.69 Foreign Contractors Private Projects Government Projects No 6 1 3 3 1 3 4 5 1 1 Private Projects No 83 49 30 54 60 57 71 90 70 51 109 No 2.28 8.468 1.934.775.211.537.67 44.618 4.444 1.40 5.91 3.017 440 387 190 14.137 4.78 48.830.63 5.011 3.277.386 6.881 5.640.632 829 66.97 24.077.75 91.091.837.186.08 28.75 6.867.981.377.109.541.643 1.63 21.602.432.538 2.46 1.60 1.38 28.50 51.39 2011 1Q 2011 2Q 2011 3Q 2011 4Q 2011 7.69 18.94 26.851.68 (Source: CIDB’s Construction Quarterly Statistical Bulletin – 3rd Quarter 2013) 17 .601.203.93 19.610.724 1.792 1.227 631 43.35 2.49 7.48 1.458.80 16.75 1.99 1.93 2.886.449.964.378 1.842.20 19.702 3.152.28 - - 48 22 18 8 8.99 316.69 4.914.316 3.008.02 8.02 19.40 32.757.988.47 17.416.53 4.73 5.292 1.11 24.49 24.540.673 2.83 85.20 - 117 22 36 27 32 16.565 5.901.866.036 1.948 2.30 1.556 1.338.227.370.854 7.503.592.627.869.783 122.916 1.177.787.877 Local Contractors Government Projects Value (RM' M) 22.650 2.522 7.973.81 3.85 22.920.202 1.10 7.480.312.574 2.574.08 60.906 352 501 653 400 21.541 4.315.26 31.315 Value (RM' M) 19.592.08 74.404 4.767.246.964.475.11 7.06 42.25 8.03 6 1 1 4 - 1.473 1.188 1.96 2012 1Q 2012 2Q 2012 3Q 2012 4Q 2012 7.356.74 16.89 60.10 35.38 26.29 33.97 477.38 10.78 2.980.173.34 13.599.301 90.025.330 1.879.86 - 140 24 45 33 38 13.423.72 27.557.18 Value (RM' M) 1.497 1.416.34 4.32 4.084 4.49 2013 1Q 2013 2Q 2013 3Q 2013 4.35 54.22 Value (RM' M) 6.720.779.080.83 1.99 17.15 5.933 404 494 591 444 17.59 38.082.99 4.88 52.78 1.302 50.26 3.51 22.253 1.643 2.864 99.71 5.655.559.16 44.982.542 1.65 1.272.28 3.133.013 1.646.541.739.585 1.450.984.96 2.37 14.54 607.162 5.93 23.00 987.807 2.334.075.313.018 7.919.67 10.03 21.728 3.94 2.43 1 1 - 144.820.155.Overview of Malaysian Construction Industry Number of Projects Awarded from Year 2000~3rd Q.349 1.77 3.926.84 354.50 1.154.424 1.644.30 5.982 2.04 21.953.872.365.71 13.378.670.953 5.99 94.99 38.55 49.05 3.412 5.62 31.015 1.282.439.559.38 1.235.289.88 1.685.28 22.91 30.24 22.54 15.356.516.167.36 54.051.

66 10.58 16.84 9.632 829 66.38 26.037.197.694.316.097.594.99 94.57 45.78 48.842.29 12.650 1.787.72 1.690.729 1.635.599.75 2.091.522 7.31 273.75 359.20 9.813.66 10.250.40 1.979.001 1.085 2.958.94 8.51 - - (Source: CIDB’s Construction Quarterly Statistical Bulletin – 3rd Quarter 2013) 18 .73 15.599.35 - - 838 247 168 214 209 6.010.89 7.899 1.17 1.69 3.837.967.099.08 60.14 16.07 5.356.94 - - 2013 1Q13 2Q13 3Q13 4.901.50 17.06 8.21 No 845 1.52 16.81 2.666.25 No 74 54 93 82 84 86 11 10 16 Mix Development Value (RM' Million) 1.78 15.35 3.864 99.04 3.097 (RM' Million) 10.857.348 1.67 479.48 14.93 1.554.80 97.917.59 187.344.32 30.444.26 9.29 4.815.98 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q11 2Q11 3Q11 4Q11 7.194.229.18 29.82 2.047 1.247.81 21.61 4.90 6.49 24.75 87.38 15.079.14 51.74 1.604.277.918 429 553 522 414 44.70 1.307 1.12 21.29 7.55 49.575.52 1.691.75 8.524 1.228 1.35 4.263.146.416.88 52.59 - - 405 188 155 62 5.378.59 - - 891 209 237 209 236 7.498 840 Social Amenities Value (RM' Million) 10.245 525 634 518 568 24.04 22.99 21.96 7.332.138 2.044.388.67 23.419.239 1.10 2.196 Value Total Project Value (RM m) 50.35 20.470.854 7.697 2.601.611.380 1.432.868.54 6.403.709.422.621.272.93 1.151.703.202 532 560 592 518 32.559.270.2013 Project Category Residential Total Number of Projects 4.121.66 1.739.574.432.516.42 2.961.800.046.878.55 19.97 24.10 7.42 17.720.563 637 602 324 28.21 No 34 17 26 7 40 33 16 37 40 41 52 Others Value (RM' Million) 2.940.59 38.739.258.977.78 No 1.635 1.773.850.770.084.75 928.542 1807 2036 1916 1783 122.642.03 11.35 9.386 6.22 8.81 981.05 7.006.10 9.989.460.531 637 686 593 615 38.853 1.70 319.28 22.277 1.075 524 392 566 557 1.617.97 10.404 4.89 7.029.258 1.982 2.246.515.01 - - 2012 1Q12 2Q12 3Q12 4Q12 7.694.926.43 26.83 85.661.45 7.64 2.84 865.48 8.071.644.897.73 738.018 7.226.446.079.198 1.593.282.585 1.425 1.30 37.212 1.80 1.291 2.113.65 2.10 919.561 597 670 664 630 36.804.100.058.162 5.11 24.312.62 31.43 9.92 2.322.541.627.97 7.Overview of Malaysian Construction Industry Number of Projects Awarded from Year 2000~3rd Q.483.565 5.049.641.491.783.734 Infrastructure Value (RM' Million) 15.275 1.214 1.662.13 156.59 1.37 11.559.29 20.738 1.011.38 10.74 8.325.816.858.64 11.452.81 No 1.968 2.541 4.83 10.319 1.253 1.48 18.485.636.64 597.04 No 1.50 51.494 1.97 14.08 74.60 26.757.539.03 8.704.71 16.346 1.07 6.135.79 1.36 54.412 5.38 28.09 12.338.08 28.72 454.139 513 413 213 14.838 230 18.792 1.78 2.015 1.12 325.44 16.73 21.778 1.525 Non Residential Value (RM' Million) 10.614.85 5.76 8.787 1.941 355 510 619 457 32.476 1.70 6.66 5.25 1.191.540.570 1.14 24.522 454 1.881 5.724 1.83 10.186.

000 16. 89 9. 81 6. 81 9. 85 9. 94 .000 6. 75 4. 32 2.Overview of Malaysian Construction Industry GOING GLOBAL MBAM Overseas Projects Awarded to Malaysian Contractors By Country Year 1986 ~ 3rd Quarter 2013 20.000 - Bosnia Herzegovina Indonesia Thailand South Africa Philippines India Bahrain Sudan China Iran Brunei 3.0 80 .2 99 . 80 0.1 3 18 .000 10.6 83 . 48 9. 89 5. 23 4. 27 7. 59 1. 14 1. 98 1.000 18. 00 2. 42 0.1 5 11 .000 8. 69 9. 20 5. 90 9. 55 9. 51 Saudi Arabia Vietnam Qatar Country Cambodia (Source: CIDB’s Construction Quarterly Statistical Bulletin as of 30th September 2013) 19 Other Libya UAE 9. 10 7. 00 2.000 4. 72 9.000 2. 00 1.2 5 RM Million 12.000 12 . 57 9. 44 2.000 14. 90 5. 27 5.

26 1.000 9.507.360.27 3.00 1.145.19 15.98 2.00 10.554.644.22 6. 2012 25.87 3.99 15.384.105.69 2.000 18.733.17 19.963.443.Overview of Malaysian Construction Industry GOING GLOBAL MBAM Overseas Projects Awarded To Malaysian Contractors By Year 2000~ 3Q.514.974.37 Year 20 (Source: CIDB’s Construction Quarterly Statistical Bulletin as of 30th September 2013) .000 Value (RM Million) 20.000 9.467.000 2.05 5.04 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Until 3Q.2013 3.950.

Overview of Malaysian Construction Industry INVESTMENT ENVIRONMENT World Bank Ranking For Malaysia DOING BUSINESS 2013 (% POINTS) 79.1 MBAM IMPROVEMENT IN (% POINTS) 0.7 DOING BUSINESS 2012 (% POINTS) 78.4 DOING BUSINESS 2013 DOING BUSINESS 2012 CHANGE IN RANK RANK RANK 12 14 2 21 .

Overview of Malaysian Construction Industry INVESTMENT ENVIRONMENT World Bank Ranking For Malaysia MBAM TOPIC RANKINGS Starting a Business Dealing with Construction Permits Getting Electricity Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders DB 2013 Rank 54 96 DB 2012 Rank 42 116 Change in Rank -12 20 28 33 1 4 15 11 27 62 1 4 25 12 -1 29 No change No change 10 1 Enforcing Contracts 33 31 -2 Resolving Insolvency 49 48 -1 22 .

MBAM Roles of Builders in the Building Process 23 .

The builder is the individual or company who oversees the construction and ensures that all necessary measures are taken to result in the completed finished product.Roles of Builders in the Building Process MBAM Definition of a Builder • A builder is usually a contractor or an individual who engages in the planning. developing and coordinating of activities which coincide with the building of structures. 24 .

building or other structure. The building contractor carries out his/her duties by supervising employees. 25 . planning how the project will be carried out and completing the project in a manner which coincides with all laws. rules and regulations which may be in existence and correlate with construction.Roles of Builders in the Building Process MBAM • The general responsibilities of a building contractor entail the individual planning and carrying through any and all pertinent activities relating to the construction of a dwelling.

This involves various forms of correspondence with necessary material suppliers. firing employees who work on the specific project with the contractor. The first duty of the builder is to implement a plan in which to carry out the construction project. the builder is responsible for hiring. Along those same lines of supervising the employees. Since construction projects cannot be completed without the necessary building materials.What Are the Specific Duties of a Builder? MBAM • There are many duties which a builder must complete on a daily basis in order to ensure that the construction project is completed in a timely and correct manner. it is up to the contractor to acquire goods to build the structures. supervising and. The builder is also responsible for obtaining materials for the project. the builder must also take care of payroll with regard to the workers and engage in payroll functions or hire someone to do so for the contractor. This extends anywhere from hiring workers to developing a step-by-step timeline that the project will follow from start to finish. In addition to implementing the construction plan. 26 • • . at times.

These must be recognized and followed by building contractors in order to complete the project in a law-abiding manner.What Are the Specific Duties of a Builder? • MBAM Another specific duty of the builder is to acquire all necessary licenses and permits from relevant entities so that the building project can begin. where and how a building contractor and his crew should build in certain areas. hire workers and finish the construction in a cost-efficient manner. These range anywhere from building licenses to zoning permits and there are many regulations that relate to these documents which each building contractor must follow in order to engage in construction. The building must also do his/her research regarding relevant regulations and laws akin to the construction process. This will allow the building contractor to obtain supplies. Budget issues are another item which relate to the duties of a building contractor. The builder must establish a budget for the construction project and follow that budget as closely as possible. Instituting and following budgets is a serious matter which building contractors should be concerned with as they ensure that the project will be completed as was earlier envisioned. There are many laws which state when. 27 • .

The building contractor needs to follow the specific building project closely and make changes when he/she deems it necessary to do so. MBAM 28 . the builder contractor deals with all emergencies and surprises which relate to the project and occur on-site and sometimes off-site as well. the builder is also responsible for reviewing the progress and implementing any changes along the way.What Are the Specific Duties of a Builder? • Throughout the construction process. Lastly.

it is best to have a builder that knows what he/she wants and acts on it. If the employees and supply companies know exactly what is needed of them. 29 • . it does aid the builder in getting the job done in a quick and efficient manner. Due to the fact that important decisions need to be made on a daily basis. Builders should also be good leaders. The first trait which all builders should possess is decisiveness. Another good trait for building contractors to have is experience. This is simply a beneficial trait but not necessary in all cases as everyone has to start somewhere and not every builder will have years of experience behind them. Experience may not be necessary in all circumstances. there are certain positive traits which comprise a good building contractor. they will do a better job in the long run due to this guidance.What Traits Make a Good Building Contractor? MBAM • Although each and every building contractor is a little bit different from others. There are many individuals who are counting on the builder to show them the way and this is why good leadership skills are a beneficial trait for builder to have.

Since a delay in one portion of the construction project can hold up the entire process. In order to be the best building contractor one can be. it is important that the building contractor knows how to resolve issues which may arise during the construction process. acquired experience and decisiveness may be helpful qualities for an individual of this type to possess. Building contractors are individuals with demanding and multi-faceted duties and responsibilities. building contractors should be individuals who can resolve issues in a quick and speedy fashion. 30 . A building contractor who knows how to troubleshoot will see beneficial results in the end. Those building contractors who are determined.What Traits Make a Good Building Contractor? • MBAM • • Lastly. steadfast and seek quick resolutions are ones who may prosper greatly in their occupation.

MBAM Challenges of the Builders in The Building Process 31 .

There is a need to limit number of contractors.Challenges MBAM HIGH NUMBER OF CONTRACTORS There is a high percentage of contractors but only about 16% are actually running construction business. raise standards of registration and pre-qualification of contractors to ensure quality delivery from capable and committed contractors – fewer but stronger players 32 . There is an urgent need to regulate the number of contractors.

939 317 1.204 3.669 4.088 326 266 360 344 G4 343 100 90 135 128 G5 346 157 155 121 145 G6 127 64 72 41 55 G7 373 198 131 131 103 Pahang Perak Perlis Pulau Pinang Sabah Sarawak Selangor Terengganu Wilayah Persekutuan 3rd Quarter of Year 2013 3.156 2.301 1.740 948 1.456 6.800 3.506 2.647 3.647 3.229 2.308 3.Challenges Number of Registered Contractors as of 3rd Quarter.141 499 382 364 550 G3 1.468 10. 2013 MBAM State End of Period Johor Kedah Kelantan Melaka Negeri Sembilan Total Contractors Registered 6.206 183 1.530 5.898 4.097 4.448 68.304 2.499 9.686 35.076 212 195 20 176 148 149 703 160 520 3.380 (Source: CIDB’s Construction Quarterly Statistical Bulletin as of 30th September 2013) Note: Figures are subject to change due to late notification .041 2.251 603 1.303 2.541 582 682 116 493 1.932 3.372 1.239 62 89 9 100 86 97 328 106 390 1.758 1.319 425 693 9.100 429 504 56 701 850 364 1.566 1.532 9.113 G2 1.397 2.789 7.079 164 212 32 247 232 174 931 226 1.438 Contractors Registered By Contractor Registration Grade G1 3.626 145 144 23 326 475 412 1.

34 .Challenges MBAM TOO MANY RULES AND REGULATIONS • Still many rules and regulations. Government agencies and local Government to deal with when it comes to getting approvals and permits for compliance.

35 .000 by 2015 as per the Government’s long term policy on reducing the reliance on foreign workers. • The Government to train local workers to replace foreign workers as well as to reduce the total number of foreign construction labour to 200. Dangerous and Demanding” •There is a need on providing quality construction industry based training and strive to tailor the training provided to meet the construction industry’s needs especially for the up skilling of the current local construction workforce.Challenges HUMAN RESOURCES AND MANPOWER ISSUES MBAM • Generally it is hard to attract workers to the industry as it is labeled as “Dirty.

Need to revive the system of apprenticeship to encourage proper transfer of skilled workers to unskilled workers such as in the trade of brickworks. plastering. especially in the professional. real life and useful experience can be imparted to these new construction workers. 36 . Mechanisation and other labour saving substitutes must be encouraged in order to drive yield of construction workers to achieve a higher income economy. managerial. Raids on construction sites disrupting flow of work. supervisory and skilled labour segments of the construction job markets. pipe works and tiling works. •Need to avoid continuous pressure resulting from future foreign construction labour and construction skills shortages. In this way. •Need to promote interest in construction related careers and to do this Government should continue to teach construction related skills in schools and also vocational schools. •IBS.Challenges MBAM •Need to stop the flow of competent human resources out of the country.

Initially for SSS we had 28 candidates. Image of the industry . MBAM • • 37 . Dangerous. Demanding MBAM is doing its best to improve skills of construction personnel with the Construction Occupational Competency Development Programme (COCD) for Construction Trade Foreman.Challenges Up-skilling of Construction Workers and Attracting Construction Personnel • The industry has problems attracting skilled construction personnel to the industry. now we have more than 1.Dirty. MBAM is also training Site Safety Supervisors (SSS) for the industry since 2011.000 personnel trained.

38 . It is our understanding that all the workers including the legal ones will be detained unless they can prove that they have proper document which sometimes can be quite difficult as their document can still be with their employer or immigration pending visa stickers to be affixed by the authorities.Challenges Raids To Flush Out Illegal Construction Workers • MBAM MBAM members have been seriously affected by raids on illegal construction workers and most of the workers whether legal and illegal have fled the work site to avoid arrest.

There have been instances where legitimate immigration papers of foreign workers have not been acceptable to enforcement personnel due to the lack of co-ordination between immigration enforcement personnel. the police and RELA members. This has caused hardship to individuals and disrupted construction activities as very often legal as well as illegal would tend to run away when such raids occur at construction sites.MBAM • MBAM have urged the authorities to exercise constraint and to review procedures involved in carrying out such raids. 39 .

cement. from building materials such as cement. 40 . This increase in fuel cost will impact on the construction costs as contractors (such as transporters and material suppliers) will have to demand higher price for their products and services. The prices of many construction-related materials. which uses large amounts of diesel to operate. machinery and transportation costs will have to be increased as well.Challenges Increased Price of Fuel • MBAM The construction costs at all levels of the value chain. concrete and sand to logistics. To transport sand. stones and steel bars from ports and plants to construction sites require large number of trucks and heavy machineries. will go up as the direct result of the increase in fuel cost. to avoid further squeezing of their profit margins to the point of insolvency.

this inevitably will cause further delay in the nation’s development programmes and infrastructure projects. homeowners.Challenges Increased Price of Fuel • MBAM The overall increase in cost will be passed on to developers and eventually. 41 . In addition. so the eventual effect of the increase will be felt both in the short-term and long-term. The construction industry is linked to more than 140 downstream activities. costs of living in everyday life of the rakyat will also increase. All in all.

On 22nd June 2012 the act was finally gazetted after it was approved in Cabinet in 2009.Challenges Delayed Implementation of CIPAA • MBAM It has been a long way since the Construction Industry Development Board (CIDB) and Master Builders Association Malaysia (MBAM) and other related promoters first started to advocate the government to enact the Construction Industry Payment and Adjudication Act (CIPAA). CIPAA will also provide an assurance to the construction players as they are supported by adjudication if they were involved in a payment related issue. The enactment of CIPAA is fundamental to protect the interest of all the construction industry players in Malaysia. CIPAA's main objectives are to provide a medium for speedy dispute resolution through adjudication and provide remedies for the recovery of payment in the construction industry. • 42 . CIPAA also function to facilitate timely and regular payment.

up to this date the enforcement of CIPAA is still ambiguous. operational slowdown and escalating costs because every party are well aware of their rights and responsibilities. The government should realize that CIPAA is crucial for the construction industry as it will minimize unnecessary disputes that can affect ongoing projects with delays due to supply shortage.Challenges Delayed Implementation of CIPAA • MBAM However. 43 .

000) currently with 30% duty and 10% sales tax be reduced to 10% if possible. At present the duties and sales tax for construction machineries such as Hydraulic Truck Mobile Cranes amount up to 40%. MBAM hopes the Ministry will consider the reduction of duties to 15% as the current static rollers are less efficient.40. MBAM has been appealing for duty reduction for construction machineries since 2006.Challenges Machinery high import duties • MBAM • To encourage the construction industry to bring in new machineries. The cost of doing business is high.110) with a current duty of 25% and Sales Tax of 10% which is considered high. MBAM also would like to appeal for the Government to consider Crane Lorries (Hydraulic Truck Mobile Cranes (Custom Code: 8705. the present lack of incentives must be addressed. This results in high cost of construction machinery and overall cost of running a business in Malaysia. 44 .10. The latest equipment used are actually vibratory rollers and it would be good to encourage usage of new machineries that are more productive and cost lesser to maintain. If the duties are lowered. The reduction requested is for Vibratory Rollers (Custom Code: 8429. this would help to encourage the construction industry players to upgrade their machineries.

Challenges Negative Image of the Construction Industry MBAM • Construction industry is usually associated as a third class occupation that offers dirty. dangerous and demanding task. • The negative image of the construction industry is marred also by the increasing number of fatal accidents that occurred in the construction site lately. 45 . • People believe that working in the construction industry will require them to work more than 12 hour per day under the scorching hot sun as well as during the rainy days. • Local manpower are not interested to join the industry due to the working conditions and relatively low wages than any other industries.

46 . thus bringing down cost. Standard design would enable IBS components to be produced on a large scale. while modularising the dimension of the components would provide flexibility to the house design. • All parties must work towards standardisation and modularisation of the system.Challenges Lack of Industrialised Building System (IBS) Implementation MBAM • The Government and the industry must continue to be more aggressive in leading the promotion of the Industrialised Building System (IBS) model by creating economies of scale property developments in order to attract investments into the building system.

MBAM THANK YOU 47 .