Cement hike hits small contractors
Cement hike hits small contractors
JAKARTA (JP): Recent hikes in cement prices, excessive
supervision and out-of-date cost estimates for state-funded
projects have brought great losses to small-scale construction
contractors.
The National Contractors Association (Gapensi), which groups
mostly small-scale builders, complained to the House of
Representatives yesterday that its members suffered the most from
the recent hikes in cement prices, which in some areas reached
prices over 100 percent higher than the government-set local
price references.
"We bear the most losses because we, unlike large contractors,
cannot buy cement directly from the main distributors or even
producers," Gapensi's chairman, Agus Kartasasmita, said in a
hearing with the House's Commission V here.
Agus said that excessive government supervision of development
projects has also raised costs.
He explained that there are more and more related government
institutions involved in the supervision of projects funded by
state or local administrations.
The institutions include the Supreme Audit Agency (BPK), the
Government Audit Agency (BPKP), the Inspectorate General of the
Ministry of Public Works, the ministry's Provincial Inspectorate
and local Agencies for the Coordination of Support for the
Development of National Stability (Bakorstanasda).
"The involvement of all these institutions in the supervision
of projects, of course, burdens contractors because of the extra
expenses added for the contractors," Agus said.
He also noted that the cost estimates for projects funded by
government institutions are often out of date because they have
been calculated by project managers based on the government's
list of development projects, which may have been processed two
or three years earlier.
"As the cost estimates are not appropriate, contractors are
forced into unhealthy competition with each other by cutting
bidding prices to win jobs," Agus said.
He then called on the government to update its list of
projects and to make their costs more realistic. (rid)