Builders object to pricing mechanism

Builders object to pricing mechanism
Published: 30 December 2007

The Real Estate and Housing Developers Association of Malaysia (REHDA) and Master Builders Association Malaysia (MBAM) have reiterated their strong objection to the implementation of the automated pricing mechanism (APM) for cement, scheduled for Jan 1, 2008.

In a joint statement, they said cement prices were expected to rise next year with the implementation of the APM, jeopardising the building and construction industry.

They said in a move that would only benefit manufacturers, the introduction of the APM would see cement prices revised quarterly and while the APM was to be revised regularly, the industry believed that there was a high tendency that pricing would be revised upwards instead of downwards.

“On the ground, there is already word that prices will go up in January 2008. We hope the rumours on price increase is not true as any attempt to further increase the price of cement will definitely affect project costs.

“Inevitably, this will result in an upward revision of prices for new housing and property launches,” REHDA president, Ng Seing Liong and MBAM president, Patrick Wong, said in the joint statement.

Both organisations, whose members are the main end-users of cement, felt the APM mechanism was not justifiable and is not in the interest of the industry and property buyers, the statement said. They said cement prices should remain status quo and the pricing mechanism should be scrapped.