KUALA LUMPUR: The Works Ministry will partially compensate contractors affected by the rising cost of construction materials. 

Minister Datuk Mohd Zin Mohamed said the decision to pay them variation of price (VOP) compensation was for projects starting from Jan 1 this year.

Mohd Zin said the materials that came under VOP were steel, cement, bitumen, premix, sand, gravel, guardrail, fabric reinforcement, copper, water and sewerage pipes, diesel and petrol.

Previously, only steel and cement were considered for VOP compensation.

About RM70 billion worth of contracts were being undertaken under the Ninth Malaysia Plan, he said after a post-cabinet meeting at his office here yesterday.

The Master Builders Association welcomed the ministry's move .

However, association president Ng Kee Leen said the benefits for contractors could have been larger if turnkey contracts awarded before Jan 1 this year were also considered for compensation.