Concession system assists small contractors

By: Zaki Salleh

IPOH – Payments to contractors are more regularly made through the concession system that is practised at the moment, thus helping the group in implementing government projects.

It’s different than before when there were government agencies that were late in making payments, which could take months and had an impact on the contractor’s finances.

The President of the Malaysian Malay Contractors Association (PKMM) Perak, Datuk Wira Jamaludin Abdul Rahim said the concession system is better when there are no delayed or late payments.

He said this is because any delay in payment will affect the contractor’s capital to be used for the next project.

“For contractors, the most important thing is payment. For example, class F contractors get a project worth RM20,000 to RM30,000 with a profit of 10 to 15 percent or around RM3,000.

“But even the RM3,000 profit had to wait up to three to four months to be completed. So during that period, if they get a new project, what kind of capital would they have to turn over?” he said.

He said this when met at the PKMM office.

In the meantime, Jamaluddin said, the allegation of a monopoly by the concessionaire company is also untrue because many other projects can be acquired by the contractor.

He explained that contractors can still compete for tenders or other projects either through concessions or government departments.

“If it’s a government department project, they have to draw votes and quote. So, it’s not true that if they give concessions, they won’t get the project at all.

“Everyone gets the same opportunity from concessions and government departments especially for class G1,” he said.

He added that the existence of a concessionary company also greatly helps the survival of small contractors when payments are also made after 50 percent of the maintenance work is carried out.

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