Builders to finish RM13b worth of jobs this year

BUILDERS will finish some RM13 billion worth of jobs from 47 projects in Malaysia this year, a sharp increase from RM5 billion from 20 projects completed in 2007.

The major rise both in projects and contract value signifies the return to growth for the Malaysian construction industry.

Overseas, Malaysian companies have completed 282 projects between 2002 and 2006 worth a total of RM38 billion.

"From the performance thus far, we are confident that this momentum will be sustained at least in 2008, if not the end of the Ninth Malaysia Plan (9MP) period in 2010," Construction Industry Development Board (CIDB) chairman Tan Sri Ir Jamilus Hussein told Business Times in an interview.


JAMILUS: The indication from the trend is very positive

After experiencing 10 quarters of negative growth since the second quarter of 2004 until the third quarter of 2006, the construction sector has been growing at four per cent (1Q07), 4.8 per cent (2Q07)and 4.7 per cent (3Q07).

Of the total projects awarded last year, 55 per cent came from the private sector (from 63.4 per cent in 2006).

"The indication from this trend is very positive as it indicates that the contribution of projects awarded from the government is increasing," Jamilus said.

Projects from the public sector rose to 45.1 per cent in 2007 from 36.6 per cent and expectations are high that in 2008, there would be an increase in projects awarded by the public sector, thus contributing to the growth momentum seen so far.

Jamilus said for later years during the 9MP period, contribution to construction growth would be determined by the output of construction projects not yet completed and projects to be awarded in 2008, 2009 and 2010.

Under the 9MP, construction works to be implemented will be RM280 billion, equally contributed by the private and public sectors, with an annual average of RM56 billion.

The RM140 billion private sector contribution is derived from RM120 billion from private sector plus RM20 billion more which is expected to be contributed by construction opportunities from the regional economic development corridors.

Although lower than the amount under the Eighth Malaysia Plan, the private sector can look to the regional growth corridors to spur growth momentum.

"With the volume of works generated from the 9MP, the contribution from the private sector and the economic corridors, and the trends in the award of projects, it is expected that the growth of the construction sector will be sustained amidst the external uncertainties," he said.

Jamilus said the board is also assessing financing alternatives for its members as it has been a bane for those wanting to venture overseas.

During a meeting with the central bank authorities in October, the construction business community were also keen to take up Islamic sukuk as an alternative to finance projects overseas.

By New Straits Times (by Rupa Damodaran)