No mega projects bad for business, cry heavy machinery firms

An artist’s impression of Bandar Malaysia, which is one of the China projects initiated by Barisan Nasional that the current government has opted to continue. (File pic)

KUALA LUMPUR: Local heavy machinery industry players have urged the government to initiate more mega projects next year, saying they have found it difficult to cope over the past year without major projects.

“The primary problem faced by our members for the past year was that there weren’t enough construction projects initiated as most mega projects were shelved, renegotiated or reviewed to lower costs,” said Malaysia Heavy Construction Equipment Owners Association president Liew Yu Chan.

Liew said this was why his group, which represents local heavy machinery businesses, welcomed Putrajaya’s decision to revive several mega projects announced by the previous government, including the East Coast Rail Link (ECRL) and the Bandar Malaysia project in Johor.

“We hope to see more money allocated for the construction sector to allow more mega projects to be revived, thus boosting our economy further,” he added at a Budget 2020 roundtable dialogue here today.

The Bipartisan Budget 2020 Roundtable Talks at Tunku Abdul Rahman University College in Setapak were organised by think tanks Bait Al Amanah and the Institute of Strategic Analysis and Policy Research.

The ECRL was relaunched in July with a reduced cost of RM 21.5 billion and with a shorter route connecting the east and west coasts, reversing the government’s earlier decision to cancel the project due to Malaysia’s financial woes.

The ECRL and Bandar Malaysia, with an estimated cumulative gross development value of RM150 billion, are among several China projects initiated by Barisan Nasional that the current government has opted to continue.

China projects that have been shelved indefinitely include two pipeline projects worth RM9.4 billion.

Liew said the upcoming budget should have allocations for infrastructure, particularly for the widening of roads.

“One of the problems that increasingly burden our members is that more and more roads are subject to the restriction on heavy equipment during peak hours, the latest being at the Selayang to Rawang road.

“This is due to the (traffic) congestion that (is) presumably caused by heavy equipment.”

Liew said the restriction hindered his group’s members from getting to their job sites on time. He proposed a specific budget for roads to be widened so the restriction for heavy equipment during peak hours could be lifted.

Liew also urged Putrajaya to consider introducing a law compelling foreign construction companies to purchase or rent heavy equipment from local dealers or local rental companies – unless the equipment they need was not available locally.

He said there was a growing trend of such foreign-run companies setting up shop in Malaysia, which he said was affecting local industry players.

“These foreign companies, (from) China especially, import everything from their native country, including equipment and labour.

“This has deprived locals of business opportunities. It also allows foreign companies to compete on an unequal footing because they are able to complete their projects at a much lower cost,” he said.

Liew also appealed to the government to completely remove the import duty tax on all heavy equipment. He said at present Malaysia had one of the highest import duties on heavy equipment in Southeast Asia.

“The Malaysian construction sector relies heavily on imported heavy construction equipment because Malaysia doesn’t have local manufacturers for heavy equipment except for tower cranes.

“A higher import duty on construction equipment will translate to higher construction costs and (will be) subject to various abuse and corruption,” he claimed.

Budget 2020 will be tabled on Oct 11 when the Dewan Rakyat convenes again.