Builders want to backdate claims to April 2007

Source: Master Builders Association of Malaysia

The government is allowing contractors to claim for price increases in steel bars for design and build jobs from May 12, but contractors said their claims should be backdated to a year ago.

They want to backdate their claims to April 2007 and if the government agrees, this could involve billions of ringgit.

Master Builders Association of Malaysia (MBAM) president Patrick Wong said steel prices have been rising since April 2007 and many contractors who took on design-and-build jobs could not claim for the full amount paid for the steel bars.

"Last year, contractors' claims for government design-and-build jobs were limited to that of the April, June and December ceiling prices," he told reporters in Kuala Lumpur yesterday.

"We have appealed to the government to consider paying us the price difference above the ceiling price which we have been shouldering all these while," he said.

Last week, following Prime Minister Datuk Seri Abdullah Ahmad Badawi's announcement to fully liberalise the steel bar and billet market from May 12, all government design-and-build jobs were also required to incorporate price variation clause to accommodate claims for price increase in steel bars.

From May 12, changes in the price of steel will be based on the market price and calculated separately from the index of the construction items.

While MBAM welcomes this decision, it said the government should allow for contractors to claim from April 2007.

"If backdated to April 2007, the total claims for the price differences above the ceiling prices for steel bar in design-and-build-jobs could amount to between RM2 billion and RM3 billion," Wong said.

By New Straits Times (by Ooi Tee Ching)