CIDB: Act 520 amendment won't lift construction costs

KUALA LUMPUR: The latest amendment to the Fourth Schedule of Act 520 is unlikely to drive up construction material prices, according to Construction Industry Development Board (CIDB) deputy chief executive (operations) Datuk Dr Ts Gerald Sundaraj.

He said the amendment was primarily aimed at ensuring construction products and materials used in Malaysia met the required standards, rather than adding unnecessary costs to the industry.

"My expectation is that this will not have an impact on an increase in the price of goods, but it will provide greater confidence that developers, builders and contractors are using quality products, he said at a recent media briefing.

Gerald said the use of quality materials would also provide greater assurance during the maintenance phase, as they tend to last longer and require fewer replacements.

"If lower-quality products are used, replacements will be more frequent," he said.

He said testing costs would vary according to the type of construction product and tests required, rather than being subject to a standard fee.

"For example, testing fees for tiles are different from steel. For rebar, you need to conduct a tensile test to assess its strength, so the cost is different," he said.

He said testing fees were determined by accredited testing facilities, including the Construction Research Institute of Malaysia and Sirim.

Gerald said small contractors generally would not need to conduct testing themselves, as they could obtain construction products from manufacturers or suppliers that had secured the required certification of standard compliance or PPS.

The amended Fourth Schedule came into force on Aug 1 and now covers 102 construction products and materials across 11 categories, following additions, updates and removal of irrelevant standards.

However, enforcement of the amended requirements will only begin in February 2027, giving industry players a six-month transition period to prepare for compliance.

The amendment applies nationwide, including Sabah and Sarawak.

Gerald said the six-month period was considered sufficient for manufacturers, importers, suppliers and contractors to identify affected products and review their certification status.

He said industry players should use the period to address any compliance gaps before enforcement of the amended requirements begins in February 2027.

"We believe the six-month period is suitable and sufficient for them to prepare because this is not the first time we have made changes to the Fourth Schedule.

"The industry understands that this is an ongoing process, so they are also continuously prepared when improvements are made from time to time," he said.

Gerald said the list had been reorganised to reflect changes in construction technology and industry requirements, with outdated products removed and new products added.

He said the latest structure covers iron and steel, concrete, aluminium, cement, ceramics, sanitary and clay products, fibre and composites, glass, insulation and radiation barriers.

The categories also include timber and innovative products, bringing the total number of categories under the revised Fourth Schedule to 11.

Gerald said CIDB had conducted engagement sessions with manufacturers, importers, exporters and other industry players before the latest amendment was introduced.

"The industry itself wants us to enforce the standards to prevent suppliers from bringing in products that are not of the required quality.

"They also believe there is a need to include these products in the Fourth Schedule so that irresponsible parties bringing in products that do not meet the required quality can be removed from the market," he said.

He added that the amendment would also help create a fairer competitive environment for businesses that comply with the required standards.