Putrajaya has urged the construction sector to adopt industrial building system (IBS) technology to reduce the reliance on foreign workers but industry players believed that there are hurdles to clear before this can be achieved.

At the Master Builders Association Malaysia (MBAM) 63rd anniversary dinner last night, Prime    Minister Najib Abdul Razak said that adopting IBS technology - the colloquial term for prefabricated construction methods - would reduce the number of foreign workers.

"IBS is important as the new edge of the construction industry - faster completion times greater productivity, less waste, fewer accidents and lower overall construction cost to the industry.

"As of to date, the Construction Industry Development Board (CIDB) has registered 245 IBS manufacturers nationwide. I would like to urge more contractors to employ IBS technology," said the prime minister.

"It is estimated that using IBS can reduce the expenses by 14 percent," he said, adding IBS allows construction firms to wean themselves off low-skilled workers.

Prefabricated buildings consist of factory-made components or units that are transported and assembled on-site to form the complete structure.

Although Najib didn't mention this in his speech, it was likely that this call was related to the fact that Putrajaya would impose a progressive levy against employers who hire a large number of foreign labourers from 2019 onwards.

Foreign workers still needed

Met at the sidelines of the dinner last night, MBAM president Foo Chek Lee said his association supported the use of IBS, but warned that the technology was new and there are not enough skilled workers to work on it.

"Besides having to manage a construction site, we need to have trained designers and manufacturers (to support IBS)," he explained.

Foo believed that the IBS will likely reduce some cost, but it may not be feasible for all developers because only some developers have enough projects to ensure economy of scale.

One measure that the government can adopt to help IBS kick off was to reduce taxes, for example, on machines needed to assemble the prefabricated parts at the construction site.

However, regardless of whether developers adopt the IBS method or not, foreign labourers were still a necessity for the industry and the new levy will result in higher costs that will be passed on to consumers.

In view of this, he hoped that the new levy would be imposed in stages so that the industry can withstand the shocks.

"The reality is that we still depend on foreign labourers; the construction sector itself needs about 900,000 to 1.2 million workers," he said.