IBS Q&A (Minister of Work) - draft copy

Q1. It is almost a decade since IBS is first being introduced to our industry through establishment of IBS Roadmap 2003-2010. Nonetheless, a lukewarm respond from the private sector hampered the effort as IBS is far from experiencing a total adoption (put aside the fact that IBS is currently compulsory in public buildings). As it may seem, the industry at large is rather complacent with current technologies and practices and seems reluctant to change. When asked to use IBS, some quarter of the stakeholders insists on cost hike, high capital expenditure requirement, lack of volume and demand and the need of skilled IBS workforce. In the perspective of the government, does IBS is still relevant? What is the main purpose of government to mandate IBS in construction of government buildings? What is the state of IBS in Malaysia at the moment and what is the way forward?

A1.The construction industry is a very competitive and risky industry. It is also an established industry with many deep seated and culturally embedded practices. Since 2003, the government has encouraged the use of IBS to improve construction practices and modernise the industry. However, to change conventional practice to IBS is an onerous task indeed. One of the obvious shortcomings is to establish economic of scale. We cannot achieve economies of scale if IBS do not catch on in the market, and without economies of scale we cannot bring down the price of using IBS, and without competitive prices we cannot encourage more to use IBS, which finally prevent us from achieving economies of scale. One way to overcome this is to allow for a level playing field where only IBS are mandatory for construction of certain types of buildings. Since 2008, government buildings under JKR must achieve IBS Score of 70. It means that, 70% of components and systems used in a building must utilise IBS. Perhaps, in that sense, our industry stakeholders which are more familiar with conventional practices will face slight difficulties to achieve this score and support feasibility of change to IBS. In a private sector, a survey concluded that only 5 to 15% of building construction were constructed using IBS. Current study by Bina Fikir Sdn. Bhd., a consultant appointed by CIDB to review and developed IBS Roadmap 2011-2015 showed there are lacks of knowledge on IBS among designers, the incentive to adopters are not sufficient, current design components is not standardise thus failing to get volume of production among others are the root cause of lukewarm respond from the industry. Nonetheless, from government points of view, IBS is still relevant to modernise the industry and at the same time to reduce our dependency on foreign workers. This is echoed in the newly announced New Economic Model (MEB) which emphasised that the importance of innovation and knowledge is to utmost important drive our nation out from the ‘middle income trap’. So in the future, government is thinking solutions to encourage more private sector building projects to utilise IBS, perhaps through incentives to developers like what offered under the Green Building Index (GBI) incentive scheme. At the same time, manufacturers and all players of IBS sectors need to create highest value for IBS to serve the clients best interest, as we know clients in a private sector are more demanding in term of design esthetic value. With this regards, we need to move from mass production of components to mass customisation of buildings where the building design can be tailor made to specific customer needs. We also perhaps need to encourage manufacturers to produce ‘modular housing’ which move all the work trade at site to the manufacturing floor. We need to move up the level of industrialisation and encourage innovation, whilst low innovative systems which do contained enough value like mould systems will be discouraged. As the world become more environmentally conscious, we should find ways to link IBS with the issue of sustainability and green construction. It is all our plan to speed up IBS adoption with the aim to have the industry that is capable to deliver high quality end product in timely completion at the same time reduce the number of unskilled foreign workers in the industry.

Q2. The inclusion of 70% IBS components is been compulsory by the government to public building projects creating a positive demand on IBS. Nonetheless, one would concern that Malaysia shall probably become an international backyard for products which are not compliance to certain quality standard of building materials. How the ministry addresses this problem? With this regards, does we need a quality assurance measure in place? Does IBS products (local and import) need to be tested and verified before it can be used in our construction sector and how it can be done?

A2. The implementation of IBS in public building projects is indeed a positive step to streamline the construction industry towards sustainable quality planning, design, construction, manufacturing and assembly of IBS components. From the beginning, government has geared to guarantee only quality products and services delivered to site with full confident and good performance to users and clients. The validation, verification, testing and certification or in a short form; the VVTC program has been introduced by the Construction Industry Development Board (CIDB) to approve the use of IBS products in construction up to certain degree of standard and promote highest quality assurance practice. The mechanisms adopted are to assist the industry in improving quality management system and product delivered. With this mechanism in place, the manufacturers will e able to plan, obtain and interpret data to produce good design and manufacturer high quality products. Only the accredited manufacturers which undergo VVTC quality assurance program will be included in IBS Directory for Manufacturer and the government will only select the contractors who apply components that are produced by manufacturer listed in the directory to be used in government project. By this mechanism, we can assure that all IBS components used at least in government projects is in a high quality according to international standard. One of the key components of VVTC quality assurance programs is the testing where the applicant will go trough a rigid and thorough testing on random sampling in accredited laboratories. Only recently, our ministry has established Makmal Kerja Raya Malaysia to do the testing. The performance testing by Makmal Kerja Raya Malaysia or other accredited testing laboratories to endorse the quality that the standard specification is used.

Q3. IBS has been touted as a solution to provide level playing field in construction industry and create new opportunities for existing and new players. With this regards, what are the level of Bumiputera’s equity and involvement in IBS business so far? Is the percentage is satisfactory? How do you tackle this issue? On the other hand, the industry needs to increase the number of IBS specialist that can be a solution provider to cater local market and probably global market as well. How can existing conventional contractors doing conventional job can be transformed into IBS specialist, maximise their profits and sustaining their business?

A3.We do not have numbers on Bumiputera’s involvement on IBS. Based on the feedbacks from CIDB, it is indeed very encouraging despite our popular believe. We are working very closely with MARA to develop a huge number of Bumiputera manufactures producing IBS components probably to be located in each state. There are also a number of incentive and financial facilities created by the government for this people and free consultancy from relevant agencies to help their business to grow and sustain. But I must admit, the Bumiputera manufacturers and installers are currently relying too much on government project contracts like schools, hospitals and universities, but we are very positive that they can be able to supplies for private projects as well in the future. On the other hand, to create a huge number of IBS specialists in Malaysia for both Bumiputera and non-Bumiputera, we need to initiate a wider understanding on the characteristics and the processes involved in IBS. General consensus among the industry, that IBS is best handled as a holistic process rather than just a collection of technological solutions. The approach requires total synchronisation on construction, manufacturing and design processes. It needs emphasis on rationalisation, standardisation, repetition, collaboration, supply chain partnering and more effective planning and project management. After having captured the success factors, we need to initiate benchmarking and technology transfer initiative in order share the key principals behind successful IBS venture in Malaysia. By having use and applies this principle, the construction will able to create a large pool of IBS specialist in the market, which can able sustain in their business venture. As you had mention earlier, IBS technologies are not only can be applied in local construction but perhaps one day, we can export our expertise to other countries. However, more research needs to be done to identify best practices and Critical Success Factors (CSFs) to IBS which will eventually guide our players to successful utilise the systems.

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