Contractors to get more allocation for affordable housing projects - PM

Caretaker prime minister Ismail Sabri Yaakob announced that the cabinet has agreed to increase the allocation for contractors involved in the government’s affordable housing projects from RM55,000 per unit to RM68,000 per unit.

This is because contractors are struggling with the rising cost of construction materials and this price increase will help with their profit margin, he said.

“In this situation where construction material prices are uncertain, I want to announce that the cabinet has approved additional allocation to increase the price per house, like the Hardcore Poor Housing Programme (PPRT) under the Rural Development Ministry, the Rakyat Housing Programme (PPR) under the Local Government and Housing Ministry… from RM55,000 to RM68,000.

“This is to ensure the profit margin is there so that contractors involved in the construction of these houses can get some (profit),” Ismail Sabri added.

He said this during the officiation of the Malaysian Malay Contractors Association (PKMM) annual general meeting held at the World Trade Centre Kuala Lumpur today.

Contractors had previously returned the housing projects as they could not afford to complete them with the previous RM55,000 price the government was paying, Ismail Sabri said.

“The price was too low and there is no profit. Not only is there no profit, but sometimes they were making a loss.

“The government recognised (this issue) and will increase the price of the houses so that the contractors can have a profit margin,” he said.

He also thanked the Malay contractors who persevered and completed the affordable housing projects despite not being able to make a profit.

Back in July, the Dewan Rakyat was told contractors were unwilling to participate in building PPRTs as the RM55,000 the government was paying them per unit was not sufficient to cover the rising costs of construction materials.

Then rural development deputy minister Abdul Rahman Mohamad said at the time that the cost to build one unit of affordable housing had risen to RM67,000.

Hence, he said, the government would review their guidelines for PPRT construction.

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