IBS’s significance to the industry and the challenges to stakeholders

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kopiandproperty.com learnt a lot about IBS within one day from the IBS Conference by MIEA Institute. My personal idea (and most people’s) about IBS also known as Industrialised Building System would be these few things; it will help us ween off the need for too many foreign construction workers, it will save lots of time (instead of the typical 3 years we all know) but these advantages also come with higher initial costs as well as the fact that some smaller developers just do not have the economies of scale to do so. Dato’ Jeffrey Ng, Chairman of REHDA Institute (RI) IBS Conference in his opening address actually gave a much better overview of the IBS’s significance to the industry and the challenges to stakeholders.

Significance of IBS – Optimising costs and time effectiveness and to maximise quality standards.

Adoption rate – Still low adoption rate by private projects. Only 14% private projects and only 31% by end 2017

Challenges to IBS implementation in Malaysia’s construction industry:

1. The high cost factor – to date IBS has proven not to be any cheaper than the conventional method, thus giving developers no incentive to adopt the industrialized system. Whilst it may speed up construction period, such speed may work against developers too especially in a softer market where sales are slower;

2. The high cost of logistic of transporting the IBS components – certain components are very heavy and difficult / expensive to transport, leading to higher costs and compliance;

3. Incentives do not commensurate to high cost of upfront investments – the incentives for IBS, for most parts are always targetted at manufacturers. IBS systems manufacturing are high investment businesses and incentives offered are often not significant enough to bring in more players and IBS activities into the industry. We were informed that only 12 out of 300 manufacturers have applied for such incentives. Relevant incentives should also be offered industry wide to developers, contractors and professionals as well to encourage higher IBS adoption

4. The lack of economies of scale – the limited number of units built do not provide the economies of scale that will render IBS more cost-effective vis a vis conventional method

5. Inadequate training & competency – the need for more trained IBS and BIM competent professionals and sub professionals, and also contractors, thus the need to incorporate relevant training and syllabus at educational level;

6. The need for mindset change – total mindset change is required by all stakeholders. Projects are to be IBS designed from the start i.e at site selection, design stages, materials selection to ensure seamless adoption of the system throughout. On the other part, buyers’ acceptance must be enhanced as there is still market resistance towards some of the components such as drywalls;

Moving forward – All IBS stakeholders be they the Government, regulators, authorities, property developers, main contractors, consultants, manufacturers or the work force, need to act and must work together in a concerted and coordinated manner. One clear issue about the adoption of IBS is an IBS “eco system.” RI will conduct deeper research into IBS and will recommend transformational solutions to address the present eco system inadequacies.

Beyond just this IBS conference, REHDA Institute are also incorporating relevant IBS contents into programmes for members. They include IBS roundtable sessions, master class and also conferences to provide a platform for knowledge sharing and exchange of ideas. In addition, RI will be embarking on a specific research project on “IBS – Making it Work for the Industry” soon and will eventually incorporate IBS as part of the syllabus contents for the upcoming Master in Real Estate Development (MRED), a masters programme produced for the industry in collaboration with Universiti Tunku Abdul Rahman (UTAR).

What is the significance to us as buyers of future properties? Well, for one, IBS is said to lower the construction costs and this should translate into lower property prices. Secondly, IBS will speed up the construction time significantly which meant that buyers do not need to wait 3 years for their dream homes. Third and very importantly, IBS will ensure better quality achievements because it’s no longer based on the skills of the construction workers or contractors. I am sure many have experienced shoddy workmanship of some contractors but with IBS, it’s all standardised and the quality issue can be rectified right at the source. Happy understanding these IBS issues.

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written on 27 March 2019

Next suggested article: REHDA members are optimistic for H2 2019

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