He said Penang Development Corporation (PDC) would negotiate with contractors who had submitted claims related to higher prices, and absorb part of the increase to ease pressure on ongoing projects.

Chow said the state might also delay projects that have yet to be awarded, as contractors struggle to bid amid rising costs.

“Projects that are already under way will continue,” he told reporters.

He also said Penang did not need to table a supplementary budget yet, as cost-saving measures could be implemented without one.

Chow said the state’s financial position remained healthy and in surplus, provided that costs were controlled and revenue collection met expectations.

On a separate matter, Chow said the water level at Sungai Muda had improved and was now above the critical level of 1.5m.

The Penang Water Supply Corporation activated a contingency plan last week, releasing water from the expanded Mengkuang dam to sustain operations at the Sungai Dua water treatment plant after the river’s level plunged to 1.27m.