Some contractors hired by the government have not been paid for their work up to nine months, according to a report in a Chinese daily yesterday.

Oriental Daily News quoted Master Builders Association of Malaysia (MBAM) president Goh Chye Koon as claiming that in Putrajaya alone, the government owes contractors up to RM200 million * [correction] .

According to him, the staggering amount has accrued because the payment process is lengthy.

Payments for work done in the country's new administrative capital are made by Putrajaya Corporation (the administrative body) on receipt of the green light from Putrajaya Holdings (the developer of the area), where state-owned oil company Petronas has a major stake.

"Until the end of last year, there were still a lot of construction projects for which money had not been paid. I am sure this also happens with other government projects," said Goh.

He said at least 10 member companies are involved in projects at the nation's administrative capital.

He said the contractors have lodged complaints with the authorities concerned over the non-payment.

Describing it as a "big problem", Goh asked: "If you are a contractor, would you survive if you have been owed RM20 million?"

He could not be reached for verification of his claim.

PM informed

A top official with MBAM, who declined to be named, claimed that the association was in the dark over the figures quoted in the report.

"Nobody knows the exact figures but payments to contractors have been slow. The contractors won't tell us the exact amount. They do not even want their names to be reported," he said when contacted today.

He said the delay in payment is unacceptable as the prices of construction material are not stable and there is a shortage of foreign workers.

"The cash flow is rather tight for the contractors when material prices are not stable... no progress of payment and there are no jobs... we also have problems getting foreign workers... it's bad." he said.

According to him, MBAM has highlighted their plight via letter to Prime Minister Abdullah Ahmad Badawi and the Finance Ministry.

"We also raised this issue during a budget meeting with the premier last month. As to the cause (of the slow payments), you have to check this out for yourself," he said.

Last month, Abdullah, who is also finance minister, announced that 26 development projects originally slotted for the 9th Malaysia Plan would be brought forward to revive the subdued construction industry and strengthen the economy.

The construction industry was among those worst hit when the government began a massive crackdown on illegal immigrants.

Correction: The original RM2 billion figure mentioned earlier in this report was incorrect. It should be RM200 million. The error was due to a mistake in translating the figure from Chinese to English. We apologise for the error.