Poor management, financial weakness behind 75pc of delayed projects, says Ahmad Maslan

Deputy minister Datuk Seri Ahmad Maslan said CIDB records showed that 1,541 facility management and maintenance projects worth RM39.59 billion were recorded from 2023 to 2025, while 468 contractors were registered under the F01 and F02 facility management specialisations. — Picture by Opalyn Mok

By Opalyn Mok

First Published: Tuesday, 18 Aug 2026 12:36 PM MYT

SEBERANG PERAI, Aug 18 — An estimated 75 per cent of delayed and sick construction projects nationwide are due to weak management, poor operational oversight and financial shortfalls, said Deputy Works Minister Datuk Seri Ahmad Maslan today.

He said technical issues at project sites made up the remaining 25 per cent which showed the need for contractors to strengthen their financial position, internal management and ability to deliver projects.

“Seventy-five per cent of delayed projects stem directly from poor contractor management, weak operational oversight and financial shortfalls,” he said at the CIDB Northern Region Contractor Convention 2026: NexGen Builders at the PICCA Convention Centre @ Butterworth Arena here.

Ahmad said contractors could no longer rely solely on technical competence, as their long-term survival depended on sound governance, robust cash flow, skilled personnel, technology adoption and proven delivery records.

“To survive, grow and secure government tenders competitively, contractors must have strong financial capability, sound management, good governance and the ability to deliver projects on time, within budget and to standard,” he said.

He said the industry must also reject shell companies, proxy bidding, tender-rigging and the practice commonly described as “Ali Baba” contracting, in which firms win contracts but pass execution entirely to third parties.

“We must eliminate the pervasive ‘Ali Baba’ practice,” he said.

“Bumiputera firms should not secure projects only to rent out or pass off the contracts entirely to third parties without building their own expertise and execution capability,”

Ahmad said this was particularly important in efforts to develop more capable Bumiputera contractors, noting that their participation remained concentrated in the lowest contractor grade.

He said CIDB records showed that Bumiputera contractors made up 47,064, or 72 per cent, of the 65,446 Grade G1 contractors registered nationwide.

However, the proportion fell to 28 per cent at Grade G7, with 3,097 Bumiputera contractors among 10,837 companies registered in the highest grade.

“Do not settle at Grade G1, you need to upgrade your grade status,” he told contractors.

Ahmad said the challenge was not a shortage of entry-level Bumiputera contractors, but whether those businesses were prepared to build their capacity, improve their financial management and progress into larger, more complex projects.

He also urged contractors to embrace Building Information Modelling (BIM) and other digital tools, saying technological transformation was no longer optional in a more competitive construction environment.

“Countries like China embedded BIM into their standard project lifecycles over seven years ago,” he said.

“If local contractors refuse to adopt BIM and digital tools today, they will be rendered obsolete in a globalised market,” he added.

The deputy minister said the government continued to allocate substantial funds for development, citing federal development expenditure of RM90 billion in 2024, RM86 billion in 2025 and a target of RM81 billion for 2026.

He said contractors needed to be ready to compete for projects while complying with quality, safety, sustainability, integrity and procurement requirements.

Ahmad also said Penang remained one of the country’s key economic and construction centres, recording overall economic growth of 7.3 per cent in 2025, while its construction sector expanded by 13.4 per cent.

“Penang’s growth reflects the need for a construction industry that continuously improves its productivity, professionalism and innovation to meet increasingly complex development demands,” he said.

At the convention, Ahmad launched CIS 33:2026 , the Facility Management Good Practice Guide, developed by the Construction Industry Development Board Malaysia (CIDB) to provide a more standardised reference for asset and facility management.

He said facility management should be viewed as a business opportunity for contractors after the completion of a construction project.

He said CIDB records showed that 1,541 facility management and maintenance projects worth RM39.59 billion were recorded from 2023 to 2025, while 468 contractors were registered under the F01 and F02 facility management specialisations.

“Facility management is no longer simply a support activity after a project is completed,” Ahmad said.

“It is a subsector with room for growth, which contractors can explore to diversify their services and build new sources of income,” he added.

He said the sector went beyond routine building maintenance and included asset management, facility operations, technology, safety, sustainability and user experience.

“The future of the industry is not only determined by who can build more projects, but by who can manage assets more efficiently, offer more innovative solutions and provide greater value to customers,” he said.

The two-day convention, held in conjunction with International Construction Week 2026, gathered more than 400 contractors, industry players, government agencies and strategic partners. It featured 11 speakers across seven sessions, including presentations on the Construction Action Plan 2026-2030, the Perlis Inland Port, Penang’s Mutiara LRT project, solar development, sustainable construction and facility management.