Govt Financial Facilities A ‘Lifeline’ For Small Contractors Amid Geopolitical Uncertainties

By Ahmad Aidil Syukri Hamzah

KUALA LUMPUR, Aug 20 (Bernama) -- The government continues to take proactive steps to strengthen the resilience of the country’s construction industry by providing various financial facilities to support the cash flow of local contractors affected by geopolitical uncertainties in West Asia.

The intervention measures cover contractors across various grades, particularly Grade 1 to Grade 4 (G1-G4), through four main financing channels, namely the CAKNA 1 and CAKNA 2 schemes and the Stabilisation Relief Fund (SRF) under Bank Negara Malaysia (BNM), the Express Contract Financing Scheme (SPiKE) by Majlis Amanah Rakyat (MARA), and the Contract Financing Scheme-i by TEKUN Nasional.

Industry players described the financial facilities as a “lifeline” for small contractors, helping them maintain working capital and ensure the smooth implementation of development projects for the people.

Malaysian Class F Contractor Association (PERKOBF) president Tukiman Radion welcomed the special financing initiative, describing it as project-based financing rather than a personal loan.

“When working capital comes under pressure, these financing schemes provide much-needed support for contractors to implement the projects they have secured,” he told Bernama.

Tukiman, however, hoped that the financing agencies could reduce bureaucracy and expedite the approval of funds to ensure the smooth implementation of construction projects.

He said the project financing provided a secure form of repayment for the bank, as progress payments from the government agency, as the project’s paymaster, would be channelled directly to the financing institution under a special agreement.

“Therefore, we urge the authorities to streamline the process and expedite the approval of loans for small contractors,” he said, suggesting that government projects for small contractors be allocated through a ballot system to ensure transparency.

Meanwhile, Bumiputera Infrastructure and Facility Management Contractors Association (PKIF) president Datuk Seri Dr Arifuddin Mohamed Shah described cash flow as the ‘lifeblood’ of public infrastructure projects, saying it was essential to ensuring their smooth implementation.

He said PKIF welcomed the timely move by the Works Ministry (KKR), but stressed that the initiative’s success would depend on swift approvals and a user-friendly application process.

Arifuddin also advised PKIF members to manage their finances prudently, while urging the government to continue expediting interim payments, expand access to affordable financing and strengthen fair price adjustment policies for projects affected by unforeseen circumstances.

Bumiputera Contractors Association of Malaysia (PKBM) president Datuk Seri Dr Azman Yusoff said the financial facilities announced by KKR and the government could help ensure projects were completed on time and in accordance with the stipulated specifications, provided the funds were managed prudently.

Commenting on KKR and the MADANI Government’s preparedness, Azman commended the ministry’s ongoing efforts and the Ministry of Finance’s frequent engagement sessions with industry players.

He said KKR not only facilitated access to financing but also helped review project completion periods to prevent existing projects from being classified as “sick projects”, in addition to recommending the use of local building materials and technologies such as the Industrialised Building System (IBS).

Azman also urged regulatory bodies such as the Construction Industry Development Board of Malaysia (CIDB), the Department of Statistics Malaysia (DOSM) and the Ministry of Domestic Trade and Cost of Living (KPDN) to closely monitor the supply chain for raw materials to prevent profiteering.

Meanwhile, KKR urged eligible local construction contractors to visit the official websites of the agencies involved and take advantage of the financial facilities available to maintain their competitiveness and ensure quality project delivery.

--BERNAMA