A game changer
A construction giant’s vision in pushing for ‘factory-built’ houses could well transform the Malaysian construction industry.
HOUSE buyers in Malaysia often complain about unevenly finished walls and ceilings, even in so-called high-end developments. To overcome these imperfections, some owners resort to massive renovations, thus wasting precious resources like building materials, time and money.
The arrival of “factory-built” houses that are assembled on site piece-by-piece like high-precision Lego pieces, promises to change all these.
Called the Industrialised Building System (IBS), it promises houses that are nicely finished inside out, and delivered to end-users over significantly shorter time spans.
Other than obvious savings, using IBS also takes care of the current high reliance on foreign labour, many of them unskilled, said the Construction Industry Development Board (CIDB), the agency entrusted with raising the overall standards in the construction industry here.
Under the Works Ministry, CIDB has been championing IBS by encouraging industry players such as developers and contractors to embrace IBS.
When it comes to concrete structures such as high-rise residential blocks, IBS entails making parts of a building such as slabs and walls in an environment where temperature and humidity can be controlled, such as in an enclosed warehouse.
IBS has been used in Malaysia since the mid-1960s in several affordable housing projects such as Penang’s Rifle Range flats, and Kuala Lumpur’s Tuanku Abdul Rahman Flats (also known as Pekeliling Flats).
“However, the design was very basic and did not consider serviceability issues such as (constantly) wet toilets and bathrooms. This led to problems like leakages and seepages, which were common issues with precast buildings back then. And as many low-cost housing were not maintained properly, this further contributed to the poor image of IBS buildings,” said Prof Dr Ahmad Baharuddin Abd Rahman of Universiti Teknologi Malaysia’s Department of Structures and Materials in his paper on IBS.
Ahmad Baharuddin attributed the quality issues to the integrity of the joints, especially where the floor slabs meet the walls. These can arise from lack of precision during manufacturing, or mistakes during installation.
While the industry has largely solved these quality problems over the years, the lowly image of IBS needs to be dispelled. To its credit, CIDB has been pushing for change, as seen in its IBS Roadmap 2003-2010 which outlines several strategies to promote IBS.
“It is a strategic change in the construction industry and the effort started in 1998. Besides the aim to gradually reduce dependency on foreign labour and save the country from losing foreign exchange, IBS provides the opportunity for players in the construction industry to develop a new image for the industry so that it can be at par with other manufacturing industries such as automotive and electronics,” it said on its website.
A survey conducted by CIDB found that IBS is used in less than a third of the projects implemented over the past few years (it was as low as 5% in 2003). This despite a circular from the Finance Ministry mandating an IBS score of at least 70 (out of 100) in government projects worth more than RM10mil. In 2014, only 24% of projects complied with the ruling.
The figure is even more dismal when it came to private sector projects, with only 14% achieving an IBS score of 50.
Industry voices such as the Master Builders Association Malaysia (MBAM), while largely supportive of IBS, is treading cautiously.
“MBAM had hoped to see more reduction of import duties for heavy construction machineries and more incentives in Budget 2017 to be disbursed to industry players who adopt and implement IBS and Building Information Modelling such as equipment tax reduction and tax holidays.
“We believe that mechanisation is a way forward for us to reduce our dependency on the use of foreign labour and to increase productivity and safety in the industry. We hope that the Government will support us in our efforts,” said MBAM president Foo Chek Lee in a post-Budget statement last year.
The Real Estate and Housing Developers’ Association Malaysia (Rehda) takes a similar stance.
In its “wish list” related to IBS for Budget 2017, Rehda said the Government should continue to provide financial incentives.
“Currently there are a lot of challenges for IBS adoption, namely, lack of IBS component suppliers, lack of economies of scale, high initial cost to set up factories and machinery, lack of skilled workers to operate and maintain the equipment, general market perception associating IBS with low quality homes, lack of incentives for developers, as well as various legislative and regulatory hurdles.
“The Government and its agencies must ensure that their projects adopt IBS systems and components, thus ensuring economies of scale that reduce production costs, while encouraging more manufacturers to set up plants. The Government should also provide funds to SMEs to create a ready supply of IBS products, while special incentives should be given for accelerated adoption of IBS,” said Rehda.
At the moment, residential buildings that achieve an IBS score of 50 will entitle the developer to a levy exemption from CIDB. However, the sum is rather low, at only 0.125% of the contract value. For a project worth RM100mil, the exemption only comes up to RM125,000, which is pittance.
The IBS scoring for any particular project is based on the type of structural systems used (up to 50 points), type of wall systems used (up to 20 points) and other construction solutions (up to 30 points).
The adoption of IBS is part of the grander plan to transform the industry here. For example, CIDB has unveiled its Construction Industry Transformation Programme (CITP), touted as the national agenda to transform the construction industry over five years from 2016 to 2020.
CITP intends to address long-standing issues in the construction industry, which recorded RM137bil worth of new works in 2015. While official figures are not yet available, it is likely that the sector recorded RM131bil of new works last year, while this year’s figure is projected to be around RM138bil.
CIDB admitted that in terms of building quality, workmanship is generally lacking, while quality assessment tools such as QLASSIC are underutilised. It also acknowledged that safety issues are also generally not given due emphasis at construction sites, leading to a high number of deaths and injuries in the sector.
More damning is the admission that our construction sector also scores poorly when it comes to environmental sustainability as the construction process, especially those not using IBS, generates too much carbon emissions. The buildings are also energy guzzlers as they were not designed with sustainability in mind.
The conventional manual-based casting also leads to a lot of wastage, and this high volume of construction waste “overcontributes” to landfills.
“The production and dumping of waste is a problem on construction sites, which has not been properly addressed until now,” said CIDB.
In 2011, Malaysia produced around 0.326kg of carbon per GDP dollar, which put it at 34th highest when compared to 180 other countries or jurisdictions. The carbon dioxide emissions came from the burning of fossil fuels and the manufacturing of cement.
The construction industry here is still highly reliant on a labour pool where more than 90% are largely unskilled foreign workers.
Then there is the issue of low productivity, which again puts the Malaysian construction industry behind many other countries.
Observers note that the tendency to favour labour over technology and new methods of construction explains why there is not much urgency to embrace technologies such as IBS.
As a result of all these, Malaysian companies face stiff competition both within and outside the country from competitors who are much better placed to provide services at more competitive terms.
Construction Research Institute of Malaysia executive director Prof Zuhairi Abd Hamid said that while IBS technology is already available, there is no great demand for it here. “Currently, conventional construction works are relatively cheap due to cheap labour. However, there will come a time when labour will no longer be cheap, and that is when IBS will be sought after.”