Labuan also in grips of cement crisis, East Malaysia

Labuan also in grips of cement crisis, East Malaysia
Published: 07 September 2007

The Bumiputera Contractors Association here is concerned over the continued erratic supply of cement and fears that scores of rural projects will be affected if the crisis continues.

Its Chairman Ahmad Bahar said recently the Government allocated RM9.8 million to Class F registered contractors for minor projects but most of the projects are delayed because of the shortage.

Ahmad Bahar said there were only three cement suppliers and when shipments arrive each contractors is limited to merely 40 bags of cement at a cost of about RM15 per bag.

He said this was hardly sufficient and contractor thus had to bear unnecessary additional costs of maintaining manpower, etc. "It is causing the contractors hardship and we hope the problem will be solved."

He said without the projects being completed in stages "progress payments were also difficult to claim and this further aggravated the problem."

Ahamd Bahar also said that according to government procedures, when a certain amount was allocated it had to be used within a set time. "Otherwise the unused fund would be viewed as the contractor’s inability to complete the project and the next allocation would be reduced."

Ahmad Bahar hoped such measure won’t be taken since the fund not being used was due to the cement shortage and projects not being able to complete on time.

He noted that last year, more than RM10 million was allocated "and we managed to complete all the jobs on time."

The cement shortage is not only affecting contractors who are involved in upgrading of roads, bridges, repairs and maintenance of government buildings, schools, etc.

There are about 160 registered contractors on the island and not long ago the limit of the class F was increased from RM100,000 to RM200,000.

Apart from these contractors the cement shortage is also affecting major projects like the Mega Methanol Plant, Asean Supply Base projects and housing projects.

Labuan needs about 2,000 tonnes of cement per month and lately the figure was higher due to development boom. Sabah and Sarawak are the main suppliers to Labuan.

Sabah developers have also been crying out loud about a cement shortage in the State and blamed the State-run Cement Industries Sabah for not anticipating higher demand for the commodity.