SMALL-SCALE Bumiputera contractors are opposed to Putrajaya’s decision to increase the number of licences awarded to Class F contractors, saying that the move would increase competition for an already scarce job market.

They spoke out against Deputy Finance Minister Amiruddin Hamzah’s recent announcement that the government is reopening the application for Class F contractors to mark Pakatan Harapan’s first year in power, after the issuance of the licence was stopped in 2005.

“We are opposed (to the reopening) because as it is, Class F contractors do not have enough work to do,” said president of the Class F Bumiputera contractors’ association of Malaysia Tukiman Radion.

“When you award more licences, people will expect more projects but for now, there are no (new) projects. Even if there are, it’s too few,” Tukiman told The Malaysian Insight.

Class F contractors hold licences to undertake projects valued under RM200,000, and licences in this category are only awarded to Bumiputera contractors.

The issuance of new Class F licenses was stopped in March 2005 as the total number of registered contractors was deemed to be high at 35,000. In July 2011, the number dropped to 28,982 following a tightening of conditions.

Tukiman said the Barisan Nasional government had considered reopening the licensing application in 2015 but the association was opposed to it even then.

There are currently about 26,000 Class F contractors in Malaysia.

“Some have moved up (to a higher class) but there are many who have had to close shop because there were not enough projects,” he said.

Tukiman said the association sent an official letter of protest to the Works Ministry last month but was told that the issue is still being discussed.

Putrajaya needs to ensure there are enough contracts and jobs before allowing more contractors to flood the market, he said, adding that some contractors have not had any work for up to three years.

“If you want to reopen the licensing applications, the government has to ensure that Class F contractors are able to accept projects worth RM300,000 a year.

“If you take it that we have a profit of 25%, that means we have an annual income of about RM75,000. Only then can the government reopen licensing registration,” said Tukiman. – May 7, 2019.