"Sick" project

Salam and dear all, When a public sector construction project is delayed by 30% i.e. its actual progress is 30% behind the planned progress, the project is classified as "projek sakit" or "sick" project. But not anymore. In a recent circular issued by the Ministry of Finance Malaysia in September 2009 a project is classified as "sick" when its actual progress is 20% behind the planned progress. Ref: http://www.bernama.com/bernama/v5/newsgeneral.php?id=457746, 24th Nov. 2009. Wassalam.

Time and cost overruns: are we using the right techniques to estimate time and cost?

Salam and dear all, The 2008 Auditor General's report pointed out several areas related to public sector construction procurement that are not quite right. Included in the list are time and cost overruns of projects. In fact, time and cost overruns of public sector projects have been highlighted by the Auditor General in many past reports. Those interested may read the report at http://www.audit.gov.my. In this posting I would like to call for a discussion, to seek views from research students and practitioners studying time and cost overruns on the methodology or methodologies used to estimate time and cost of projects. The key question I have is this: in the context of the public sector construction procurement in Malaysia is the methodology (or are the methodologies) used to estimate time and cost of projects current, appropriate and scientific? Perhaps final year and graduate students may consider the above mentioned question as a potential to be developed into a research topic for the final year project paper or dissertation. Wassalam.

RICS's new qualification "AssocRICS"

Salam and dear all, The following article may be of interest to people aspiring to become chartered surveyors but lacking in the necessary academic qualifications. It has been reported by Catherine Deshayes that the RICS has come up with a new qualification, at intermediate level and aimed at non-graduates, as a new pathway towards becoming a fully qualified chartered surveyor. The full article is published by the Move Channel.com on November 10, 2009 and available at http://www.themovechannel.com/news/abf0bfb8-4c3f/ Here is the full article;

New qualification for RICS

Tuesday, November 10, 2009

Catherine Deshayes

RICS has launched a new intermediate surveying qualification called AssocRICS. The new qualification is designed to introduce non-graduates to the RICS programme - AssocRICS replaces the TechRICS qualification and will be rolled out across a number of specialist areas of the surveying profession starting with quantity surveying, closely followed by residential survey and valuation and residential estate agency...

It is aimed at delivering a professional qualification to a broader cross-section of individuals while ensuring that standards are advanced in the sector.

The associate assessment process is online and competency based. The qualification is achieved by demonstrating that RICS standards have been met through relevant work experience.

Commenting Louis Armstrong, RICS chief executive said:

"This new entry-level qualification is an opportunity for many excellent property professionals who previously have been denied access to a professional qualification due to a lack of academic qualifications.

"RICS is keen to recognise the experience and competence of a broad section of workers and offer them the opportunity to attain chartered status and remove barriers to social mobility and career progression."

Source: www.propertyweek.com

Home insulation anyone?

Salam and dear all, Insulating one's home or office building could save money and is cooler too. Here are some of the facts (as reported by Sakina Mohamed (Bernama.com, 5th November 2009 at http://www.bernama.com/bernama/v5/newsfeatures.php?id=452603 ); (i) "insulation could make buildings cooler, lessen the need for fans or air-conditioners, and could save up to 85 per cent of energy used in buildings. (ii) in homes air conditioners make up some 23 per cent of energy consumption. (iii) the cost for insulating a building is about RM2.70 per M2. A typical intermediate house in Malaysia would require RM2,000 to RM3,000 to insulate the space under the roof where heat gained is the most (some 70% from the ceiling). (iv) mineral wool, the material used for insulation , is manufactured in Malaysia. (v) the insulation installed is maintenance free, provides better noise protection, and has fire-retardant properties". Wassalam.

Budget 2010 and the Construction Sector Part 2

Salam and dear all, The following is the second and final installment on Budget 2010 and the Construction Sector; Construction Special attention to construction; in 2010 RM9 billion is allocated for the construction sector. From this amount, RM4.7 billion is for roads and bridges, RM2.6 billion for water supply and sewerage services, RM899 million for rail facilities, RM820 million for port and sea services, RM276 million for airport projects. Special attention towards green technology; the Green Building Index was launched on 21st May 2009. Owners of GBI Certificate from 24th October 2009 to 31st December 2014 enjoy income tax exemption equivalent to the additional capital expenditure in obtaining the certificate. Buyer of building with GBI certificate will be given stamp duty exemption on instruments of transfer of ownership equivalent to the additional cost incurred when signing the S & P within the same date stated above. Allocations that would benefit construction includes RM137 million for drainage and irrigation, RM70 million for the Paya Peda Dam project in Terengganu, and RM82 million for the aquaculture industry; RM30 billion for primary and secondary education including RM1.6 billion for building 80 new schools, RM1.1 billion to refurbish schools nationwide; TNB will spend RM5 billion to implement electricity generation, transmission and distribution in 2010; RM1.9 billion for the armed forces to construct and upgrade sentry posts; RM14.8 billion to upgrade, build hospitals and clinics; and RM3l.2 billion to construct and upgrade rural infrastructures mainly rural and village roads. Others related to construction includes: under the regional economic corridors 126 out of the 195 planned projects are at various stages of implementation, total investment has reached RM221 billion (in excess of the 9th Malaysia Plan target of RM145 billion. In 2010 a sum of RM3.5 billion is allocated for infrastructure and basic amenities under the regional corridors initiatives. In terms of key policies affecting the construction sector, they include; Local Authorities must speed up issuance of Development Orders, individuals only use their Mykad number (known as MyID) and companies use their CCM business registration number (known as MyCOID) when dealing with government agencies; the government reduces its involvement in economic activities and therefore companies under the MOF Inc and other viable agencies will be privatized; the practice of PPP will be enhanced, projects identified under the PPP include the CIQ in Bukit Kayu Hitam, 6 UiTM campuses and a MATRADE Centre. Five percent (5%) tax on gains from the disposal of real property from 1st Jan 2010 (with certain exemptions such as disposal of a residential property once in a life-time). However, there is no detail on how or the style of privatization and PPPs that the government intends to apply. Others considered related to the construction sector; steps being taken to strengthen R&D&C activities (Malaysia’s spending on R&D is at 0.6% of GDP whereas US 3%, S Korea 3.5% and Taiwan 2.4% of their respective GDPs; RM11.3 billion will be spent on High Speed Broadband, initially 10 megabytes/second in selected areas in KL and Selangor by March 2010, other areas between 2010 and 2012 and individuals with broadband will be given tax relief of RM500 for 201-2012 for broadband subscription fees (broadband penetration in Malaysia is at 25% whereas 95% in S Korea, 88% in Singapore, 64% in Japan and 60% in US). In terms of Islamic banking, assets under the scheme account for 18.8% of Malaysia’s total banking assets, takaful contributes 7.7% of the total insurance and takaful industry; Malaysia is the world’s largest sukuk issuer with US$94.7billion or 62% of outstanding global sukuk in 2008. In terms of combating corruption a Whistle Blower Act will be introduced in 2010. To the individual tax payers; those with credit cards have to pay service tax of RM50.00 (principal) and RM25.00 (supplementary) commencing 1st January 2010; maximum individual income tax reduced from 27% to 26% for the year of assessment 2010 and personal relief increased from RM8,000.00 to RM9,000.00. Wassalam.

Budget 2010 and the Construction Sector, Part 1

Salam and dear all, The Finance Minister who is also the Prime Minister of Malaysia presented his budget to Parliament on 23rd October 2009. In relation to the construction sector, the following are the highlights of the budget; Generally Total allocation for 2010 RM191.5 billion, some 11.2% lower than the revised allocation of RM215.7 billion for 2009. RM138.3 billion or 72.2% is for operating and 53.2 billion or 27.8% for development. As for the development allocation, RM25.4 billion is for the economic sector, RM20.3 billion social, RM3.7 billion for security, RM1.8 billion for general administration and RM2 billion contingencies. The budget for 2010 is the last budget under RMK9, its approach is moving from an industrial based economy to one that is based on innovation, creativity and high valued activities. Malaysia is a trading nation. Its total trade is valued at 200% of GDP and is vulnerable to various uncertainties related to international capital flows and external trade. GDP contracts at a slower pace i.e. at 3.9% during the 2nd quarter (-6.2% in the 1st quarter); construction grew at 2.8% in the 2nd quarter due to the implementation of the 2 stimulus packages totaling RM67 billion). As of 16th October 2009 more than 48,000 projects under the stimulus packages were completed; about 40,000 are being implemented. Malaysia’s GDP in 2009 is projected at -3.0%, in 2010 expected to expand 2% to 3% and construction expected to grow at 3.2%.