TO MINIMISE or eradicate critically delayed state infrastructure projects, Sarawak Premier Abang Johari Openg today unveiled six incentives to assist contractors with their project cash flow ensuring a “win-win” situation for all parties.

Abang Johari said with regards to the Variation of Price (VOP) list introduced on September 26, 2021, the Sarawak government “in its stance to safeguard the interest of the industry and the region’s economy” had approved the advance payment for works contract.

The other incentives he announced were:

• Allowing up to three payments to be made without the contract documents in the first four months of the contract period

• Lower rate of Liquidated and Ascertained Damages (LAD)

• Lower minimum payments as well as other measures to alleviate projects majorly and adversely affected by the price hikes

• Extension of time (EOT) for projects that are at least 60% completed

• Mutual termination of projects, subject to prevailing criteria imposed.

The Sarawak government’s VOP differs from the federal government’s version.

Abang Johari said the Sarawak government’s VOP reflects “accurate current market sentiments pertaining to the price fluctuation of materials. This is intended to alleviate the dire circumstances encountered in the construction industry by easing margin erosion faced by contractors. Most importantly it is to ensure the delivery of government projects during these unprecedented times”.

Addressing a seminar on enhancing Sarawak’s construction industry, organised by the Ministry of Infrastructure and Port Development, the premier also said the state government is currently working towards the development of strategies for industry players to become global solution providers.

“These initiatives have been undertaken to further assist in the recovery of the local construction industry and the timely delivery of projects in Sarawak.

“In addition, the relevant departments have also reviewed their current processes and procedures to accommodate market needs and to ensure the success of project implementation,” he said.

Abang Johari said on January 27, out of 215 projects under implementation, 34 were critically delayed, 29 behind schedule and only 149 on schedule. –  February 8, 2023.