RM450 Million For Small Bumiputera Contractors To Boost Construction Industry

By Mohamad Syazwan Mustafa

KUALA LUMPUR, Nov 12 (Bernama) -- The RM450 million allocation provided by the government to small Bumiputera contractors under Budget 2025 is expected to bring about a significant impact on the country’s construction industry and accelerate infrastructure development for the benefit of the people.

Senior Lecturer at the Department of Civil Engineering, Universiti Kebangsaan Malaysia (UKM), Assoc Prof Dr Nur Izzi Md Yusoff said this substantial allocation has the potential to open up more opportunities for small contractors to compete with larger contractors in large-scale infrastructure projects.

“If channelled wisely, this allocation can provide opportunities for small contractors to be involved in various stages of road construction, maintenance, repairs, as well as smaller tasks like site management and support services.

“It will also give them (small contractors) the chance to enhance their capacity in terms of human resources, equipment, and technology; or purchase new equipment or upgrade existing ones, which can improve productivity and reduce operational costs,” he told Bernama recently.

Additionally, Dr Nur Izzi said that the allocation could also be used for worker training and skills development, enabling small contractors to better compete in the market.

On Oct 19, Works Minister Datuk Seri Alexander Nanta Linggi announced that the Ministry of Works (KKR) has been allocated a total of RM10.35 billion under Budget 2025, marking a nine per cent increase from RM9.511 billion this year.

Nanta said that RM450 million has been set aside to empower small Bumiputera contractors in Class G1-G4, who currently number 15,185, for road maintenance work on federal roads.

Meanwhile, RM178 million has been allocated for the installation of new street lights and smart traffic lights on federal Roads nationwide, while RM30 million has been earmarked for 115 district engineers at the Public Works Department (JKR) to expedite decisions and the implementation of urgent and ad-hoc works that require immediate action.

These allocations, along with other allocations for the maintenance of federal and secondary roads, align with the aspirations of MYJalan in providing safe and comfortable infrastructure.

Dr Nur Izzi explained that the special allocation for road projects is expected to result in improved road infrastructure, which will help reduce traffic congestion, enhance access to rural and remote areas, and lower transportation costs.

He said the RM178 million allocation for the installation of new street lights and smart traffic lights on federal roads, on the other hand, has been seen as a positive step in enhancing road safety and the efficiency of the traffic management system.

He also believes that the government should take bolder and more strategic steps to empower Bumiputera contractors in the road construction and maintenance sector through Budget 2025.

“This can be achieved through increased access to financing, training, and capacity development, as well as the use of modern technology that can help improve the competitiveness of Bumiputera contractors. Industry collaboration, regular assessments, and involvement in early planning are also crucial.

“With this comprehensive approach, Bumiputera contractors will be better prepared to play a key role in the nation's infrastructure development,” he said.

Meanwhile, Malaysian Bumiputera Contractors Association (PKBM) president Datuk Azman Yusoff said that the government’s approach through this huge allocation will undoubtedly have a positive impact, stimulating the construction industry and benefiting industry players and the public alike.

“The RM450 million allocation for G1-G4 contractors is a beacon of hope for our members. This initiative will stimulate the economy with a very positive multiplier effect and boost the activities of the nation's construction industry.

“However, we appeal for this allocation to be channelled directly to the contractors through a grant system, without involving concessionaires,” he said.

Malaysian Class F Bumiputera Contractors Association (PERKOBF Malaysia) president Tukiman Radion also acknowledged that the RM450 million allocation for small contractors could benefit the sector, but he believes there is room for additional funding.

Tukiman opined that an increase in the allocation is necessary because the scope of work for small contractors typically includes key projects under the KKR, such as road repairs, buildings, drainage, bridges, and slopes, which are vital for the well-being of the people.

“So, I suggest the Ministry of Finance increase this allocation for small contractors to RM1 billion. Typically, the scope of work under KKR is specifically for small contractors, and with such a large number of contractors, we hope this allocation can be doubled.

“In addition, we hope these projects can be distributed directly by KKR through the JKR and the Department of Irrigation and Drainage (DID) to industry players, without going through concessionaires because when projects are channelled through concessionaires, the value and profit decrease,” he said.

He also requested that KKR not extend the concession agreements for road maintenance works on federal roads, municipal roads, and village roads, which are set to expire next year, so that these smaller projects can be directly allocated to contractors in the group.

-- BERNAMA