‘Don’t delay; do it now’

KOTA KINABALU: The W Group, a leading local developer is facing the dilemma of completing its housing projects in time due to the shortage of cement and steel bars supplies in the state.

Like many developers, the company depended on the two main building materials in the market, said its Senior Group Procurement Manager Christopher Chin during an interview with reporters at his office yesterday.

“Developers are now competing with each other to buy the cement and steel bar in the market, and dealers are giving priority to government linked projects. To make it worse, suppliers will only accept hard cash and no more credit terms,” he lamented.

However, he believed that the problems could be address promptly by the government through the issuance of an Approved Permit (AP) to enable developers to import steel bars directly from overseas, like they did to the cement, where an AP was issued to the Sabah Housing and Real Estate Developers Association (SHAREDA).

Commenting on the statement by the Local Government and Housing Minister, Datuk Hajiji Mohd Noor saying that the Ministry is in the process of coming up with an AP proposal.

“I suggest that the government should ‘just do it’ rather than just waiting for a proposal. Why not they (the government) just ‘activate it’ because if they keep on delaying, we (developers) will have to absorb a lot of losses,” he added.

Since the crisis began late last year, Three projects by W Group’s had already been affected -Cyber City 1-which was launched two years ago, University Apartment 2 and University Condo Apartment-both launched last year.

“We bought our cement in bulk from three different dealers who obtained their stocks from Cement Industries Sabah (CIS), the only source of supply in the state. And these three dealers offered us different prices,” he said.

According to him, the prices from these dealers are fluctuating from time to time and sometimes ridiculously high. “Since last month, the cement price had increased by RM20 per tonne and the shortage halted our projects for awhile. The projects are supposed to complete within two years but have to be extended to three years now,” he said.

With these delays, the prices of the properties also surge due to the interest imposed, since the developer has to absorb additional costs every month, he explained.

While, the shortage of steel bar is another big headache, like cement the prices, it is also inconsistent, he said. According to him, since December 2008 the price of steel bar rose from RM2,300 per tonne to RM2,800 per tonne. And today it is RM3,900 per tonne, about 72 per cent surge.

Christopher believed that shortage of steel bars was probably due to two reasons either the suppliers are taking advantage of the situation or purposely waiting for the prices to go up before wanting to sell its stocks.

Over the period of 10 years steel bars price had only been increased once and now the price had gone up four to five times in the space of a month.

He said the excuse given by the supplier that the shortage was driven by the Beijing Olympics Games, which needs a lot of supply to build its sporting facilities, is totally unacceptable. Accusing it’s the supplier fetch to rake in more profit and since most local developers get their supplies from West Malaysian manufacturers. The shortage of the construction commodities will slow down the progress of our developments.