By SHARIDAN M. ALI | Sep 8, 2009

Construction players concerned about delays

PETALING JAYA: Construction players say they are more worried about possible delays in the delivery of iron and steel products due to the implementation of mandatory screening for imported iron and steel, rather than the extra cost the move will incur.

Effective Oct 13, the Government will start mandatory screening of imported iron and steel items with Sirim Bhd reportedly charging RM2,000 per 100 tonnes of products screened, which may translate into higher end-product prices.

The Government had previously announced a temporary exemption on the certificate of approval (COA) ruling for importers of non-critical iron ore and steel products, such as nuts, bolts and screws, from Aug 13 to Oct 12.

The COA ruling, effective Aug 1, had required all importers of iron ore and steel products to have a COA or a letter of exemption from Sirim for the non-construction sectors and from the Construction Industry Development Board (CIDB) for the construction sector.

The move followed the liberalisation of the iron and steel sector in the country.

Master Builders Association Malaysia president Ng Kee Leen said product testing to get the COA for imported steel bars previously took about three months which was time consuming.

“The conditional liberalisation should iron out matters and make it simpler from the previous import duty and approved permit procedures.

“And time is a more critical issue than the cost,” he told StarBiz.

Ng, who supported the liberalisation effort, said he understood that the delay could be due to teething problems, but the situation should be improved.

“I think rather than imposing only Malaysian standards for imported iron and steel items the Government should also include equivalents of Malaysian standards,” he said.

Ng added that CIDB and Sirim officers on the ground should also be well equipped with relevant knowledge on the COA matter.

“And the two-month grace period given for the exemption may be too short to be fully prepared for the implementation,” he said.

Ng also noted that the cost of product testing was not cheap.

“Our imported steel bars’ product testing to make sure they are in compliance with Malaysian standards costs more than RM100,000.

“Although the testing fees have been reduced by 39% by Sirim, they are still expensive,” he said. Product testing is a process that steel and iron importers have to undergo in the course of obtaining the COA.

According to the Ministry of International Trade and Industry, this has been done since November last year but only on 57 tariff lines which mainly belong to items used in the construction sector.

Malaysia Steel Works Bhd managing director and chief executive officer Datuk Seri Tai Hean Leng said the RM2,000 mandatory screening fee per 100 tonnes should not be too much of a burden.

“This is because the Government has reduced the tariff lines subject to mandatory standards to about 160 from 627.

“The 160 tariff lines mainly involve structural items in the construction sector,” he said.

Checks with Miti revealed that the ministry was still getting feedback from the industry pertaining to the reduction in tariff lines subject to mandatory requirements while Sirim was also reviewing the product testing fees for further reductions.

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