SEBERANG PRAI: The building industry is too dependent on foreign workers, which may compromise the quality and productivity in the industry, said Public Works Minister Datuk Mohd Zin Mohamed.

He said there are 2.2 million foreign works in the country, of whom only 515,000 are registered.

"By the end of the year, about RM18 million in wages paid to foreign workers will have out of the country when these workers send their earnings back home," he said.

He said it is time the building and construction industry reduced its foreign labour by implementing the industrialized building system (IBS).

"This system will reduce the dependence on foreign labour while encouraging the use of local skilled labour and guaranteeing quality," he said at a briefing on IBS and variation of price programmed (VOP) for the northern region yesterday.

His speech was read out by Public Works Department director-general Datuk Seri Prof Dr Judin Abd Karim.

It is hoped that with the implementation of the IBS, the number of foreign workers in the country will he reduced to 250,000 by year 2015.

Mohd Zin said the government has so for identified 406 projects worth a total RM9.4 billion that will be using the IBS.

Of these, 189 projects have been tendered out and are in various stages of implementation.

"Another 121 projects using IBS will also be tendered out within the next two years," he said.

All government agencies have also been instructed to use the IBS for at least 70% of their projects.

The objectives of introducing IBS are to reduce the dependence on foreign labour, increase quality, productivity and competitiveness and achieve the long-term goal of open IBS and full industrialization of the construction and building industry.

The ministry has also set up a secretariat to facilitate the implementation of the IBS, he added.

He also said VOP programmed was introduced for contractors to help them cut down the losses they due to increased cost of construction materials.

"The ministry has identified 1,311 projects of this total, 270 projects have been issued VOP payments while the rest are pending," he said.

As of Nov 17, the government had paid out a total of RM44.2 million in VOP payments to contractors.

The minister also said there are some 17,000 Class F contractors in the country.

"The ministry will be allocating 10% of its projects worth a total of more than RM10 million to Class F contractors," he said.

He said there at present 104 main contractors with projects worth RM5.2 billion and from these, contracts worth a total RM526 million will be offered to Class F contractors.

He said this is to ensure that bumiputra contractors will continue to expand and become more competitive in the industry.