RM70b construction deals seen in first year of 10MP

THE Construction Industry Development Board (CIDB), an agency under the purview of the Works Ministry, is expecting close to RM70 billion worth of construction projects to be undertaken in the first year of the 10th Malaysia Plan (10MP), said a senior official.

CIDB senior general manager for construction business environment development, Sariah Abdul Karib, said total project allocation for 2011 is 17 per cent less than what is projected for this year.

"Since it is the first year of the 10MP next year, implementation will take a while due to the procurement process and anticipated economic slowdown," she told reporters after the Seventh Malaysia's Construction Sector Review and Outlook Seminar, which was opened by Works Minister Datuk Shaziman Abu Mansor in Kuala Lumpur yesterday.

Sariah said about RM83 billion worth of development projects are expected to be carried out this year - the final year of the Ninth Malaysia Plan.

About RM19 billion projects have been awarded so far in the first half of this year.

Among the mega projects that can be expected in 2010 are the light rail transit expansion, the new low-cost carrier terminal in Sepang, electricity generation plants, world-class luxury condominium projects as well as developments in Greater Kuala Lumpur and the five economic regions.

CIDB expects the private sector to drive the country's construction industry, with an estimated RM250 billion worth of projects under the 10MP which runs from 2011 to 2015.

During the five-year plan period, the construction sector is expected to grow at 3.7 per cent per year to support the projected 6 per cent gross domestic product growth.

Under the 10MP, the government has allocated RM230 billion for development expenditure, of which 60 per cent or RM138 billion involves actual physical construction.

Meanwhile, Shaziman said the RM20 billion Facilitation Fund under the 10MP is likely to attract private sector investment worth at least RM200 billion, mainly from the construction sector.

His ministry has identified five strategic initiatives for effective implementation of projects and enhancement of the construction industry including the revision and establishment of construction industry related acts, the enhancement of processes and technologies, leveraging on ICT, enforcement and human capital enhancement.

The ministry is also expecting that the long-awaited proposed Construction Industry Payment and Adjudication Act (CIPAA) to be tabled in Parliament by year-end.

"With the enactment of the CIPAA, we will soon see a healthy payment conscious culture becoming a norm in the entire construction industry, easing cash flow during project implementation," Shaziman said.

By Rupinder Singh