Government construction projects expected to slow down The government alone cannot prop up construction industry, says finance minister

BANDAR SERI BEGAWAN – The development minister on Monday acknowledged there will be fewer government construction projects in the coming year as the demand for new buildings and infrastructure has decreased.

“Government construction projects are typically planned and executed based on specific requirements that align with the country’s current level of development,” Dato Hj Muhammad Juanda Hj Abdul Rashid said during a session of the Legislative Council.

The ministry’s focus in the next financial year is to ensure that existing buildings and government infrastructure are maintained and upgraded, he said, adding that maintenance projects still necessitate the involvement of contractors and consultants.

The minister was responding to a question from Legislative Council member Pehin Dato Hj Suyoi Hj Osman, who said the construction industry had been adversely affected due to the decrease in government projects.

“This impacts local consulting firms and contractors who rely on government projects, with some facing challenges to stay afloat and are on the verge of declaring bankruptcy,” Pehin Dato Hj Suyoi said.

“How can the construction industry be revived if this situation persists?” he asked, emphasising that it is not only important for the country’s development, but that it also provides jobs to locals.

Second Minister of Finance and Economy Dato Dr Hj Mohd Amin Liew Abdullah responded by saying there is a need to balance supply and demand when deciding on construction projects.

“Simply supporting the industry to create jobs for local consultants and companies without considering the actual need for new construction projects is not a sustainable approach,” he said.

The minister pointed out the need to carefully evaluate the demand for new buildings and infrastructure, taking into account population growth and other factors.

“With an increasing number of local and foreign consulting and construction companies, the competition for projects is becoming higher. It is crucial to consider the overall situation and also find ways to increase activities in other industries to boost the country’s GDP. One way to achieve this is to attract foreign direct investment and create more demand [for construction],” he said.

Dato Hj Muhammad Juanda added that there has been a 1.2% increase in applications for development permits from 2016 to 2022. In 2022, an average of 116 permits for construction work were issued and approved each month.