The Construction Industry Development Board (“CIDB”) is an inescapable presence for those engaged in the construction industry within Malaysia, largely t
hrough the levy which it imposes on all major construction projects, and the compulsory courses which it conducts.
The CIDB is a body corporate which was created by the “Akta Lembaga Pembangunan Industri Pembinaan Malaysia 1994” (“th
e Act”). Its purpose was summarised by the Minister of Works at its official opening ceremony:
“We are entering into an era of continued growth as we position ourselves into the new millennium when we become an industrialized nation with not only manufactured goods to export but also skills and expertise to sell overseas. In order to fulfil this aspiration the construction industry need to be guided, nurtured and developed to attain the required quality and ingredient”
THE CIDB’s FOCUS IS ON
- Sustainable growth, capacity development and empowerment
- Improved industry performance and best practice
- A transformed industry, underpinned by consistent and ethical procurement practices
- Enhanced value to clients and society
REGISTRATION OF CONTRACTORS
Under the Act, no person shall undertake any construction works unless he is registered and holds a valid certificate of registration issued by CIDB. Non-registration is an offence punishable by a fine not exceeding RM 50,000.00. A contractor building a residence for his own use or who employs less than 3 workers is exempted from this requirement.
Under Regulations made by the CIDB in exercise of the power to make regulations conferred by section 38 of the Act, registration of local contractors is time-based. Local contractors are entitled to be registered, in particular categories such as Civil Engineering Construction, Building Construction and Mechanical and Electrical, for a minimum period of 1 year but not exceeding 3 years to perform construction works in Malaysia. A contractor is not allowed to execute any construction works outside his registered category. There are also 7 specified registration grades for each category as set out below and a contractor is not entitled to undertake any construction project which exceeds the value of the construction works specified in the registration grade. The registration fee payable to CIDB varies according to the registration grade.
Grade Tendering Capacity (RM)
G1 Not exceeding 200,000
G2 Not exceeding 500,000
G3 Not exceeding 1 Million
G4 Not exceeding 3 Million
G5 Not exceeding 5 Million
G6 Not exceeding 10 Million
G7 No Limit
Applicants for registration in any particular registration grade are expected to have executed engineering and construction works similar to those categories, satisfy CIDB that they have sufficient financial resources to meet financial commitments which would normally arise and that they have the necessary full-time personnel resources in Malaysia to undertake work corresponding to the registration grade and category. Financial capacity of an applicant is generally evaluated, in the case of a corporate applicant, on the paid-up capital, and in the case of a sole proprietorship or partnership, on the average balance of the last 3 months’ bank statements, fixed deposits and the amount of overdraft facilities enjoyed by the applicant.
Insofar as foreign contractors are concerned, registration is project-based. The certificate of registration of a foreign contractor allows the holder to execute only the project specified in the certificate. The certificate does not allow the holder to participate in a tender or to carry out any other construction works. The dates of commencement and completion of the project is set out in the certificate and if for any reason the date of completion of the project is extended, the contractor has to apply to CIDB for an extension of the validity of the certificate within 14 days before the expiry of the validity of the certificate.
WHAT IS THE CIDB GREEN CARD?
This is an integrated program that involves the registration and accreditation of Construction Personnel to enhance safety levels at Construction work sites.
Why must you register?
- To ensure that Construction Workers are aware of the importance a safe and healthy working place
- To provide a basic knowledge on safety and health at the Construction work site
- To inform Construction Workers of the legal requirements in relation to safety and health
- Automatically covered by a special Insurance Scheme that insures the Construction Personnel against death and accidents.
If you would like to know more about CIDB services feel free to call us.