Master Builders Association Malaysia (MBAM)

The Malaysian Construction Industry

Mr. Foo Chek Lee President, Master Builders Association Malaysia (MBAM)

The importance of the construction industry to Malaysia cannot be doubted. With 140 downstream industries relying on construction, 9.5% of the total workforce and large entrepreneurial activity, the industry is crucial to the Malaysian economy. MBAM serves as the industry’s watchdog and, mediators, assists in forming government policy, they provide education and training and promote best practice amongst the industry.

Tracing its beginnings back to 1786, the Malaysian construction industry has under-gone many transitions. From Malaysia being a British colony to an independent nation, whose main focus was rural development. Through a manufacturing and industrialisa-tion period, which lead the industry to its current form today. Also notable was the changing role of the contractor over these periods, from individual or small groups offering labour services to then supplying materials, equipment and machinery and now to competing with foreign contractors to deliver services.

In the present day the Malaysian construction industry has been and is pushed forward by the Construction Industry Master Plan (CIMP) 2010 – 2015 and the Construction In-dustry Transformation Programme (CITP) 2016-2020 with the Construction Industry De-velopment Board (CIDB) serving as custodian of the plans. These industry driven plans were developed by the Ministry of Works, the CIDB, key stakeholders, relevant govern-ment ministries, universities, industry players and professional organisations.

The current programme, the CITP, is a major step forward in streamlining the industry, as it is determined to deliver a highly productive and modernised industry while prepar-ing the industry to be competitive on a global scale. The CITP focuses on four major

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areas, the first being to ingrain quality, safety and professionalism into the culture of the industry. The CITP wants to improve workplace safety, address regulatory con-straints, raise awareness of the CITPs initiatives and have an increased emphasis on quality.

The second strategic goal is environmental sustainability. By driving innovation, focus-ing on public projects to lead on suitable practices, decrease waste during construc-tion and facilitating the adoption of sustainable practices, the programme hopes to achieve this goal. The third is to focus on productivity. The CITP is aiming to double productivity and increase wages by continually developing human capital, advance the industry in SME capacity and capability building, and accelerate the adoption of Indus-trialised Building Systems (IBS) and other modern practices.

The fourth strategic thrust deals with the internationalisation of the industry. Devel-oped to push local industry players to champion the industry at home and abroad. The programme will internationalise construction practices and standards, while strength-ening access to finance for Malaysian companies working abroad.

Strong domestic demand and a recovery in external demand are positive signs for the future of the industry in Malaysia. With the GDP expected to accelerate modestly, and a sustainable demand, the industry is expected to continue to benefit from mega infra-structure projects and an increase in investments.

Construction Industry Development Board (CIDB) Malaysia

Mohd. Nazli B. Ahmad Mahyadin Senior General Manager, Personnel & Contractor Development Sector, CIDB

Established in 1995 the Construction Industry Development Board (CIDB), under the scope of the Ministry of Works aims to be an esteemed organization that delivers con-

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struction excellence while regulating, advising, developing and facilitating the industry. The CIDB focuses on a number of different areas, these include the development of construction firms and human capital, the promotion of technology and innovation, sustainability in the industry, an advisory role on industry issues along with the imple-mentation and enforcement of parliamentary Act 520.

The CIDB has been largely successful in the implementation of its mission, with many notable achievements being made, which have benefited the industry greatly. One such being the parliamentary act the Construction Industry Payment & Adjudication Act (CIPAA). With the government identifying a problem in regards to timely pay-ments, and understanding the need for the smooth implementation of construction pro-jects, the government believed CIPAA would be a positive move for the construction industry.

The CIDB was charged by the government to initiate and develop CIPAA. The CIDB, with its close ties to industry and key stakeholders, were able to meet the needs of these groups through consultations, and crucially the CIDB being able to deeply under-stand what needed to be done to address the issues identified. Enacted in 2012 by the Malaysian parliament, CIPAA now facilitates regular and timely payments, provides a system for speedy dispute resolution, and provides solutions to the recovery of pay-ments.

Following the implementation of CIPAA in April 2014 the Construction Court in Kuala Lumpur and Shah Alam began officiating. The court has several benefits to the indus-try. Presiding judges have an in depth knowledge of the construction industry, allowing them to use their expertise to resolve disputes with care, while making Malaysia the gold standard in the region for resolving construction disputes.

The CIDB has also been responsible for the establishment of several Construction Skills Training and Assessment Centres across the country. The centres focus on giv-ing students the skills they need to conform to the high standard of the industry. So far the centres have trained and certified over 320,000 skilled personnel. The CIDB be-lieve education institutes are crucial to the future, and with strong government support the training centres can help create a successful and sustainable industry.

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A strategic partner for the CIDB is the SME Competitiveness Rating for Enhancement (SCORE). SCORE is an assessment tool used to rate and assess the performance and capabilities of small to medium sized enterprises. At this point over 7,200 businesses have been assessed. In an effort to improve construction site safety the CIDB estab-lished the CIDB Green Card. Not only does this registration system improve safety across the country’s construction sites, but it provides insurance coverage for all regis-tered workers.

The Quality Assessment System in Construction or QLASSIC has been another nota-ble achievement for the CIDB. Developed to measure and evaluate the workmanship quality of a construction based on relevant and approved standards. By making objec-tive comparisons the tool allows companies to benchmark themselves against indus-try standards. Since its conception, over 1000 projects have been assessed.

Like the QLASSIC, the Safety and Health Assessment System in Construction or SHASSIC is another independent method of assessment for the construction industry developed by the CIDB. Over 280 projects have been assessed using SHASSIC, which assesses the safety and health performance of contractors and their work.

CIDB has also been responsible for the championing of IBS. As part of its mandate to promote innovation, the CIDB offers IBS accredited courses, actively promotes IBS through seminars and training. Due to their work, there are 198 manufacturers of IBS components registered in Malaysia.

The CIDB has also played its part in the exporting of construction services around the world, with more than 694 projects being completed. Projects include the Bahrain F1 circuit, Khalifa Olympic Stadium in Qatar and the Catering Facility for the Doha Interna-tional Airport.

As custodians of the Construction Industry Transformation Programme 2016 -2020 (CITP), the CIDB is implementing the programme which will transform the industry and change the way it is perceived. This change will be accomplished through four main drivers. The strategic thrusts will ingrain quality, safety and professionalism into the in-dustry culture, deliver sustainable construction to serve as a model for the emerging

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world, double productivity matched by higher wages and Malaysian champions lead-ing the charge locally and globally.

IBS is one of the means the CIDB are using to create a world class industry in line with the CITP’s strategic thrusts. By manufacturing components in a controlled environ-ment and then building the projects off site, it is estimated expenses could be cut by 14% and worker numbers reduced by 50%. IBS also offers the added incentive of boosting productivity and quality, with less low skilled workers on site, and the hiring of higher skilled workers.

The work and achievements of the CIDB, working with the Ministry of Works cannot be underestimated. Within a number of years they have played a part in creating useful and needed legislation in the Malaysian construction industry, and are the driving force behind programmes and initiatives like the CITP. The success of these achievements relies on the close relationships that the CIDB fosters with the private sector, their close links and working under the supervision of the Ministry of Works. Collaboration between the private and public sector is crucial. Without these conversations taking place between the stakeholders, there would be no strategic plan and therefore no pro-grammes.

The successes in Malaysia have also been attributed to the government understand-ing they not only need to play a large part, but to also lead by example. In addition to having a constructive dialogue with developers and other stakeholders, the govern-ment can provide good legislation which is valued by the industry, offer incentives and ensure accountability to promote good practices among stakeholders, especially con-tractors.

The importance of the construction industry to Malaysia cannot be understated, and this importance will only increase. With a strong correlation between the construction share of the GDP and the GDP per capita, and with major infrastructure projects planned, the industry will become even more critical to the economy.

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