Contractors awaiting payment of the $2 billion debt owed to them are hoping the 2016/2017 Budget will bring a ray of hope for an industry which, they say, is now in the doldrums. Some contractors, who spoke to the Business Guardian on condition of anonymity, complained that things are “so slow we have had to send home workers, the banks are selling off our equipment and some of us have scaled down significantly.”
“The industry is under pressure, people have loans, they have to pay for equipment, banks are no longer accepting government contracts which were once considered gold because they are telling us there is no guarantee we will be paid.”
Asked about the situation, president of the Contractors Association, Mikey Joseph, said the association is trying to get updated data from contractors on their individual situations.
“We know that some small contractors have gone under because of the situation but individual contractors need to tell us what is happening,” he said.
Joseph said with days to go to the 2017 Budget presentation, contractors “have not even been invited to a meeting Finance Minister Colm Imbert.”
He said: “The minister has extended no invitation to us. We sent him four letters in the past several months asking for a meeting but we did not even get an acknowledgement, which I consider to be a gross disrespect.
“There is no work save and except for the construction of the Mitsubishi CCGL Plant in La Brea and other basic infrastructure, but there is nothing else happening.”
Joseph said there is a growing level of frustration.
“The situation is bad, but we are hoping that the budget will put mechanisms in place to pay contractors.”
He confirmed what was told to us by individual contractors: “Right now if you have a government contract and go to the bank they not interested in financing you. It used to be where a government contract was considered money in the bank but no longer so.”
Although they are clamouring for projects to get off the ground, Joseph said the association wants “work that will facilitate fairness and that could only come with proper procurement legislation. Dr Rowley spoke about it in his address to the nation but that is still a long way off. They need to find a procurement regulator, they need to set up a team and an office. We still have some way to go.”
A check with the Nidco website lists the procurement process as “coming soon.”
Under the former People’s Partnership Government, procurement legislation and subsequent amendments but they are yet to be operationalised.
Joseph lamented what he said is “the lack of policy direction” from Government. He said the State needs to detail short-, medium- and long-term strategies to move the country forward and to earn foreign exchange.
“The principal foreign exchange earner lost 60 per cent value and production fell by more than 40 per cent,” he said.
According to Joseph, while the Toco to Tobago port project “will give us work there will be no long-term benefits because hand in hand with that there needs to be a plan to woo tourists to this country.”
JCC can make a difference
President of the Joint Consultative Council for the Construction Industry (JCC), Dr James Armstrong, said the industry needs the Government to give it adequate resources to allow “local and smaller companies to participate in the development process and create jobs.”
He believes stimulating the sector could help provide jobs and influence a change in the crime situation.
Dr Armstrong said while the official verifiable figure of the debt owed to consultants and contractors is $2.2 billion, he said it is more likely to be between $2.2 billion and $3.5 billion, but a large part of it cannot be verified.
Like Joseph, Dr Armstrong is concerned that a number of the smaller companies have been forced to go out of business and some are on the brink of going out of business because there is not sufficient construction work taking place.
He said the JCC wrote to the Prime Minister Dr Keith Rowley sometime ago asking for an audience about the situation but they directed us to Works Minister Fitzgerald Hinds, who met with the group.
“We discussed a number of ways in which the money can be paid,” he said.
Dr Armstrong confirmed: “Some money has been released and some contractors started receiving payments but we still need to ascertain to what extent the backlog was addressed.”
To get that information, contractors will have to indicate whether they were paid and how many were paid. But he said the current situation has had significant impact.
“You invest in equipment that is idle, people are being laid off and cannot find alternative employment, contractors really find themselves between a rock and a hard place.
“If the Government were to articulate policies which translate into a plan that shows a commitment, it will attract investors, because if investors see you are committed to a development path outlined in the budget, which is an official document, they will say based on these pronouncements we can invest X amount of money.”
Dr Armstrong said one investor is interested in housing development but it has to be economically sound.
He said: “It requires density in housing but the current government policy does not allow for that.”
He explained that density will allow for “more efficient land use and a reasonable amount of units, so instead of two-storey buildings they can go up four or five, so you creating more units, but a lot of standards will have to be looked at.”
Highways and road projects, as well as other infrastructural projects, are necessary to create jobs and stimulate economic activity, he added.
