Kota Kinabalu: The Sabah Government is looking into contingency measures to cushion the fallout from the global economic uncertainty due to the energy supply crisis and higher transport and materials costs brought upon by the ongoing Iran war.
It includes reviewing project costs and contracts to address rising prices that could affect the completion of projects and adopting a Work From Home policy now applicable only to federal staff.
State Finance Minister Datuk Seri Masidi Manjun said the State Cabinet, which met last Wednesday, discussed steps to minimise spending while ensuring ongoing projects are not abandoned.
He said increasing costs, particularly for construction materials such as bitumen — a petroleum-based product — have placed pressure on contractors who may struggle to complete some projects at previously agreed prices.
“Projects and contracts awarded earlier (before the war) may no longer be sufficient to complete due to the rising costs. If we insist on the original pricing, there is a risk that some projects may be abandoned,” he said, after opening the Restoran Famous Salim Nasi Kandar at Parklane City, Friday.
Masidi said the Government is considering reviewing contract values, if needed, although such a move would likely result in additional expenditure.
“When we revise or review the pricing, it means the government will have to spend more. If our revenue cannot cover the increase, we may have to tap into our reserves. We have to assess whether contractors can realistically complete projects at the current pricing,” he said.
Masidi said the Government’s priority is to ensure projects, including the Pan Borneo highway are completed, even if it requires intervention. He said his Ministry is compiling a list of affected projects and present its findings to the Cabinet.
While some projects may require government intervention, he said the situation in Sabah remains manageable.
“The situation is not as bad as in other countries. It is still under control. I think we are lucky because... I’ve read somewhere that China and Malaysia are two countries that have been well managed in terms of laying down the foundation of economic stability.
“So, among all the Asian countries, China and Malaysia may be the two countries that have a strong foundation (economy and finance), and we should be able to bear the consequences so long as this war does not drag on.” He assured that the state’s Rumah SMJ housing initiative would be completed. “By hook or by crook, we will get it done,” he said.
Also present were Assistant Minister of Rural Development cum Limbahau assemblyman Datuk Juil Nuatim, Pantai Manis assemblyman Datuk Pg Saifuddin Pg Tahir, Parklane City developer, WSG Group Managing Director Datuk Susan Wong Siew Guen, Restoran Salam Nasi Kandar (M) Sdn Bhd directors – Salim Khan bin Kabor, Abdul Gafoor bin Hasanudeen and Jeyaraman A/L Subramaniam.
