The cost of implementing OHSMS regulation on high-rise building projects

In 2014, the Ministry of Public Works and Housing have published regulation that require the full implementation of Occupational Safety and Health Management System or short as OHSMS (known as SMK3 in Indonesia) in all phases of construction projects. The so called PerMenPUPR 5/2014 imposed an allocation of cost specific for OHSMS in the owner’s estimate, which was later updated as PerMenPUPR 2/2018 for minor adjustments in the regulation. This regulation was supported with guidelines for project managers on estimating the cost allocation for OHSMS. However, the initiative to address safety issues more comprehensively has been ineffective. The directive has not been seriously implemented by stakeholders on public projects. Thus, to help convince all stakeholders, more quantitative evidence on the costs for implementing OHSMS is pursued. This study is to determine the percentage of costs allocated by contractors for the procurement of OHSMS components. Data were collected from surveys to eight construction sites of high-rise building projects in Jakarta and Bandung. Based on interviews, questionnaires, and supporting documents from each case study, the cost of implementing the regulation was simulated and estimated. The cost allocation ranges from 2.01% to 3.70% of the contract value. The most significant components of the costs were related to OSH personnel (44.10%), insurance and licensing (35.2%), and OSH induction and promotion (5.82%).