KUALA LUMPUR, June 10 (Bernama) — Engineering consultancy fees in Malaysia have increased by less than 10 per cent since 1983 despite a significant rise in project complexity and workload, according to The Institution of Engineers Malaysia (IEM).
A survey titled “Engineering Impact Survey — Scale of Fees for Engineering Consultancy Firms”, conducted from May 15 to 24, 2026, gathered perspectives from 598 professionals, IEM said in a recent statement.
Its members also recommended raising consultancy fees by 40 to 50 per cent to reflect current compliance requirements, operational costs and professional liabilities.
They also suggested restructuring payment milestones, with 80 per cent of consultancy fees paid by the tender stage.
Other recommendations include reducing retention sums during the construction stage to 15 per cent to improve cash flow.
“Furthermore, there is strong support for adopting quality-based selection procurement approaches that prioritise professional expertise, technical capability and public safety considerations over lowest-price criteria. This will help ensure better project outcomes and long-term value creation,” IEM said.
IEM said the survey findings should be viewed as a constructive call for further dialogue among industry stakeholders, policymakers, regulators and professional bodies.
The findings showed that the scale of fees (SOF) for engineering consultancy services has not been comprehensively revised since 1998, making it 30 years out of date, it said.
“This stagnation is particularly relevant. Respondents noted that the workload required to meet modern client demands has increased approximately 10 times over the last 24 years,” the statement said.
According to IEM, the survey suggested that cost considerations frequently play a dominant role in consultant selection, with 88.97 per cent of industry professionals noting that consultants are either “always” or “very often” selected primarily based on the lowest fee.
“Additionally, 51.84 per cent highlighted concerns regarding current procurement practices, noting that traditional tendering processes frequently favour the lowest bidder, which may not adequately reflect the complexity of technical requirements and associated risks,” it said.
The survey also highlighted growing concerns over service quality, with 65.35 per cent of respondents expressing fears that current fee levels could eventually affect service delivery.
IEM also said the entry-level engineer salary structure has seen little change for nearly 20 years, making it difficult to keep pace with the rising cost of living.
A starting salary of less than RM3,000 per month is the standard for new entrants.
The survey found that 81.30 per cent of companies reported salary adjustments are often the first area impacted by low fees.
Additionally, 52.5 per cent of those surveyed had to reduce investment in upskilling.
IEM said 96.71 per cent of respondents agreed that constructive changes were necessary for the sector’s long-term viability. — Bernama
