Penang construction boom, RM6bil worth of jobs expected over 8 years

The construction and renovation industry in Penang can expect about RM6bil worth of jobs over the next eight years, courtesy of the RM9.73bil worth of properties planned for launch this year.

This, said Penang Master Builders' and Building Materials Dealers Association (PMBBMDA) president Lim Kai Seng, was the largest amount in Penang from the private sector since the early 1990s when the construction sector was booming.

“The RM6bil figure is based on the calculation that about 60% of the gross development value (GDV) of the projects would be spent on construction and renovation work. Approximately RM5bil is linked to commercial projects, which would take seven to eight years to complete, while the remaining RM4.7bil is residential schemes, which usually take three to four years to complete,” Lim told StarBiz.

Commercial projects such as IJM Land Bhd's RM346mil Penang Waterfront Convention Centre (PWCC) next to the Penang Bridge and SP Setia Bhd's RM450mil subterranean Penang International Convention and Exhibition (sPICE) Centre and hotel projects in Bayan Baru are expected to generate about RM477mil worth of construction and renovation jobs.

“The sPICE project is expected to be completed in 2015,” he said.

In 2013, IJM Land (RM5.4bil GDV), Mah Sing Group Bhd (RM248mil), Sunway Bhd (RM120mil), Ideal Property Development Sdn Bhd (RM2bil), SP Setia (RM945mil), Eastern & Oriental Bhd (RM500mil) and Ivory Properties Group Bhd (RM520mil)) are among the developers with plans for new residential and commercial schemes on the island.

The North-East district, which covers prime residential-cum-commercial neighbourhoods such as Tanjung Tokong, Batu Ferringhi, Pulau Tikus and Bayan Mutiara, will see some RM6.67bil worth of projects taking off this year.

The South-West district, covering residential-cum-commercial neighbourhoods such as Relau, Batu Maung, Bukit Jambul, Bayan Lepas, Sungai Nibong and Teluk Kumbar, meanwhile, will see the development of the remaining RM3.07bil worth of projects.

“We expect about 60% of the RM6bil worth of construction and renovation jobs to be tendered out to Penang-based contractors. Most of the jobs for Penang-based contractors would involve the supply of raw materials and the provision of mechanical and engineering jobs.

“The remaining 40% would usually be outsourced to Kuala Lumpur-based contracting firms that provide specialised jobs, especially for the commercial projects,” he said.

On the value of construction jobs tendered out in Penang in 2012, Lim said the value obtained was RM4.4bil, which fell short of the targeted RM5bil set by PMBBMDA.

“This is according to the latest Construction Industry Development Board or CIDB report for 2012.”

There were 415 jobs tendered out in Penang in 2012, with a value of RM4.4bil, of which about RM348mil was from the government sector, with the remaining RM4.07bil from the private sector.

“In 2011, there were 508 jobs tendered out, with a value of RM5.16bil, of which RM1.14bil were government jobs and the remaining RM4.03bil from the private sector,” he said.

The value of construction jobs tendered out in Penang this year should grow by a single-digit percentage, in view of the new projects planned for the island this year, according to Lim.

“There are other smaller projects on the island and mega projects in Seberang Prai which have not been included. If included, the value of construction and renovation jobs that can be expected to be tendered out would exceed RM6bil,” Lim added.

On the rising cost of raw materials, Lim said the price of sand had increased to RM1,600 per load of 30 tonnes from RM1,200 in early January.

“The cost of construction so far has not risen very much, due to the smaller volume of jobs available, offsetting the impact of rising sand prices,” he added. - By DAVID TAN (The Star)

No comments