September 18, 2020 4:09 PM
BUTTERWORTH: A group representing contractors and suppliers today called on the government to extend the loan repayment moratorium for construction-related companies by another six months to March, saying it is still reeling from the RM11.6 billion monthly losses because of the Covid-19 pandemic.

Master Builders Association Malaysia (MBAM) said while the government has given an assurance it would carry out projects to kick-start the construction industry, the ability to stave off debt by these companies continues to be a concern.

Its president Foo Chek Lee said while construction work had resumed after the movement control order (MCO) was relaxed, they could only operate at 80% capacity, earning just enough to cover their costs.

“The construction industry involves 190 downstream industries, so if we were to grind to a halt, other unrelated industries would also be paralysed.

“While we are happy the government plans to roll out over 300 tenders related to infrastructure works in the coming year to spur the industry, the pressing problem is our ability to settle outstanding debts.

“We had suffered from a RM11.6 billion loss a month in the early months of the MCO beginning in March. Things are improving but as the moratorium draws to a close, many feel they would be unable to keep up with repayments.

“It would be good if the government could grant the construction industry an automatic moratorium for the next six months,” he told reporters in Perai today.

MBAM represents the interests of 36 affiliate construction-related industry associations, with a membership of close to 17,000.

Foo said another issue was the inability of construction companies in getting credit from banks as bank accounts were firmly in the red since the MCO began.

“We are paying salaries for full-time workers, overheads such as office rentals, utilities and the wages of daily workers.

“Many have tried applying for loans and failed because of their poor finances as a result of the MCO.

“MBAM is helping companies to submit names to Bank Negara (Malaysia) to assist them. If help is not forthcoming, many are expected to close shop by the end of the year. I think the worst affected would be companies supplying construction materials,” he said.

Foo said companies would also have to incur the high costs of Covid-19 tests, priced at RM480 to RM500 a worker.

He said while those who contributed to the Social Security Organisation could get free Covid-19 tests, they would still have to pay for those who did not contribute.

Source: https://www.freemalaysiatoday.com/category/nation/2020/09/18/extend-loan-moratorium-say-master-builders-still-reeling-from-multi-billion-ringgit-losses/