He said the matter is now under discussion between the finance ministry, the works ministry and the Construction Industry Development Board.

“We understand that when we introduced the targeted diesel subsidy, there might be some increases felt by contractors on existing costs,” he said after opening a convention of group 1 contractors today.

“For government contracts, the finance ministry is discussing where we will fine-tune adjustments for price variation for existing contracts,” he said.

Asked whether more construction materials would be included for price variation, he said: “We will see which materials can be justified, why there are increases. If there are increases, we will look at the impact on contracts and see from there.”

The Malaysian Malay contractors’ association had recently called for the revival of price variation in view of an expected 30% rise in the cost of construction materials.

In 2022, the government added 11 items including cement, bricks, glass, ceiling and roofing materials to the price variation list.