Sarawak Master Builders Federation chairman James Ha Tung pointed out that any change in fuel subsidy amidst the rising cost of living will certainly hamper the progress of the construction projects. – Bernama photo
KUCHING (Dec 2): Any drastic move to implement the targeted fuel subsidies will put more pressure on the construction industry, said Sarawak Master Builders Federation (SMBF) chairman James Ha Tung.
He pointed out that any change in fuel subsidy amidst the rising cost of living will certainly hamper the progress of the construction projects.
“Change in fuel subsidy policy aimed at reducing government financial burden would certainly have a big impact because of the rising fuel cost paid for by the construction industry players.
“The severity of this negative impact will immediately be reflected by the rising cost on transportation and logistics and it will affect not only construction sectors but all sectors,” he told The Borneo Post.
Ha’s comment came after newly appointed Prime Minister Datuk Seri Anwar Ibrahim announced earlier this week that the government was reviewing the subsidies system, especially the blanket fuel subsidy.
While the government has assured that it will take care of the interest of the industry, Ha cautioned the measure will further increase the inflation rates.
He observed the rolling back of the blanket fuel subsidy will not provide any relief as the industry is still struggling from the impact of lockdown.
“As the construction industry players are already badly affected by input cost increase and difficulty operating over the past two years, any increase of fuel price at pump stations without adequate subsidy will cause inflation to rise further.
“And this will add more financial burden for our construction industry,” he added.
He said since channelling targeted fuel subsidies aims to favour the low-income groups, more ground studies need to be done to ensure the system is successful once it is implemented.
Pointing out the volatility in the oil price market, Ha said a sound macroeconomic measure must be in place to soften the impact.
“Depending on how the move will be implemented, any changes should therefore be carefully studied and scheduled to minimise impact.
“In our opinion, should fuel subsidies be really reduced, an alternative form of funding such as grant and aid must be on standby and provided automatically by the government to help those people experiencing financial difficulties affected by this change in fuel subsidy.
“Direct reimbursement to valid individual vehicle owners would be greatly appreciated,” he added.
While he commended the effort to reduce the government’s burden as a prudent move, Ha said the system of the targeted subsidy must be carried out in a transparent manner to ensure only those who are eligible will benefit from the subsidy.
“The government must increase transparency and fairness for all procurement and administration for projects.
“Actually, a lot of terms are high sounding and meaningless without actual micro measures because this policy is advocated nonetheless by the old government,” he said.
With his appointment as the new prime minister, Ha hoped that Anwar would bring stability and focus to address the rice-bowl issue.
“The construction industry players would like and hope to see a fair and just procurement system is truly implemented by the new government for all tender exercises in Malaysia.”