Malaysia weighs deposits for public construction tenders
The proposal covers projects valued at RM10 million or more, with deposits ranging from RM100,000 to RM500,000. Lower rates remain under consideration.
Contractors bidding for Malaysian government projects valued at RM10 million or more could face a deposit requirement under a Works Ministry proposal aimed at tackling construction cartels.
Works Minister Datuk Seri Alexander Nanta Linggi said the ministry wanted to proceed in principle, while leaving room to revise the arrangements and lower the proposed rates. He acknowledged concerns that deposits could affect contractors’ cash flows.
The Public Works Department is collecting responses through a ministry survey circulated to Grade G7 contractors. The proposed schedule links each deposit to the value of the project:
- RM100,000 deposit: projects from RM10 million to RM50 million.
- RM200,000 deposit: projects from RM50 million to RM100 million.
- RM300,000 deposit: projects from RM100 million to RM200 million.
- RM400,000 deposit: projects from RM200 million to RM500 million.
- RM500,000 deposit: projects exceeding RM500 million.
An unnamed contractor association source said refunds were expected after decisions on tenders, which normally take three to six months.
Nanta said associations had repeatedly complained about cartels harming smaller contractors, especially those in Grades G1 to G4. He described the proposal as a way to ensure bidders had the ability and standing to carry out government contracts, rather than to add burdens for legitimate firms.
He sought further industry feedback on implementation, saying the arrangements should be practical while maintaining efforts against cartels.
