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No signs of recovery yet for construction sector

Thursday, February 22, 2018

Even though government has spoken extensively about wanting to partner with the private sector to “jump start” the revitalisation of the construction sector, those intimately involved in the initiative are still waiting to see it materialise.

According to president of the T&T Contractors Association (TTCA), Ramlogan Roopnarinesingh, “When they speak, they talk about projects that were happening and will happen. So far nothing is happening.”

He added, “No new projects have really started.”

Regarding the proposal for the Public Private Partnership (PPP), Roopnarinesingh said, “The Minister of Finance talked about the housing project but so far, nothing has happened with that.”

He said although the Housing Development Corporation (HDC) recently unveiled its plans for a new housing project in Curepe but, “the industry is basically at a standstill.”

HDC’s managing director Brent Lyons said the high demand for housing along the East West Corridor had led to them moving to construct eight towers which will accommodate 500 families at North Grove, Curepe.

Speaking about the project back in January, Lyons explained that while there were no squatters at the site and only “experimental agriculture” taking place, it would be much easier to get it started.

The PPP unit was set up under the purview of the investments division, Ministry of Finance, in August 2011, as part of an initiative to promote public private partnerships for infrastructure in T&T.

Through the national PPP policy that was approved by Cabinet on May 31, 2012, an institutional framework for the development and implementation of projects through the PPP modality was established.

However, Roopnarinesingh argued, “Contractors are still not being paid.

“The media has reported that in Tobago, the Unemployment Relief Programme will be sending home about 1,700 people, so basically the industry and the country is between a rock and a hard place right now.”

Secretary of Finance and The Economy, Tobago House of Assembly, Joel Jack announced on August 16, 2017, that six PPP projects were being considered for implementation in Tobago using the funding arrangement in place.

At the time, he said initial assessments had been conducted to determine the viability of the projects for 2017/2018.

They include the construction of a commercial cargo port at Cove Industrial Park, a Marina, the upgrade of the Milford Road Esplanade, the THA Housing Programme, and an urban transport hub in Scarborough.

Asked if government’s assurance to “break up” some of the larger contracts to better enable local contractors to bid and win construction packages had helped the industry at all, Roopnarinesingh responded, “The government has been saying they don’t have money, so whether they break up a package and offer it at $10 per package, if they don’t have the money, it just can’t be done.”

He continued, “In the Contractors Association, we were fighting to have more local content in the industry and had been lobbying for billion dollar packages to be broken down so local contractors can do the job.”

Referring to the recent incident in which a CEPEP contractor had taken legal action against government to recover outstanding monies owed to him, Roopnarinesingh admitted they continued to educate their members about legislation which rendered outstanding payments null and void after four years.

He said, “If you have done a job for the government or anyone for that matter, and after four years you have not been paid, that payment becomes statute-barred.”

If a debt is barred under statute, it means that by law (the Limitation Act), the lender has run out of time to use certain types of action to try and make you pay the debt.

Statute-barred does not mean the debt no longer exists.

Roopnarinesingh added, “We have told contractors to go ahead and take action as the case might be.”

Unable to quantify how many contractors were affected, Roopnarinesingh estimated that quite a bit of people had been and continue to be affected by the downturn in the sector as contractors, employees and their families were all suffering as a result.

He said many contractors have had banks foreclose on them, resulting in them shutting down operations and making the difficult decision to walk away from their homes because of a lack of work.

Roopnarinesingh described as a “significant sign,” the sharp decline in the number of trucks that could be seen transporting materials to and from job sites.

He said, “This is a sign to say nothing much is happening in the industry.”

Along with the funding to kickstart the PPP initiative, Roopnarinesingh said, “Investors and contractors need to have a certain level of confidence in the economy to invest.”

“There has to be on the part of those in charge, some effort to restore the confidence in the industry and the people outside there so that people can start re-investing.”

Roopnarinesingh said the local situation was reminiscent of the one that existed in the US prior to the election of former President Barack Obama, as they too suffered the effects of recession.

He added, “The first thing he (Obama) did was to invest in the construction industry by building roads and fixing infrastructure all over the US, which was in a deplorable state and that started the whole thing rolling as everyone in the construction industry benefitted.”

Roopnarinesingh strongly believes that if government were to replicate this system in T&T, “Everyone from the planners to the architects and designers and even the doubles man on the street will benefit.”

Protesting that the authorities in T&T needed to focus on maintaining the present infrastructure, rather than building new structures and highways, Roopnarinesingh concluded, “We need to look at more innovative ways to stimulate the economy.”

Property developer: Construction sector incentives slow to come

Real estate developer Joseph Rahael was in general agreement about the continuing struggles within the construction sector.

“I would not say that there has been any noticeable improvement in the industry.” Rahael said.

Indicating there has been a lot of talk with respect to implementing certain incentives and measures, Rahael stated, “That has not yet found its way into meaningful improvement in the construction sector as far as private investors are concerned.”

Weighing in on why it was taking so long to revive the sector, Rahael surmised, “It’s the implementation of the incentives that have been spoken about. What needs to happen now is the execution of the implementation of the incentives so that private construction interests can utilise them.”

Pressed to say why private investors were failing to take the lead in this area, Rahael explained it was simply not feasible as, “The (private) construction sector responds to the state of the economy, so the economy itself has to turn around for the construction sector to respond.”

Rahael added, “Construction doesn’t necessarily drive the economy. If the economy is rebounding, then the construction sector responds to that. So if government is active and awarding projects and stimulating the economy in different ways, then we will see the sector rebound.”

Rahael suggested other ways in which the sector can also be improved including faster implementation of incentives, and the streamlining of approvals at the level of the town and country division, the regional borough corporations and the Water and Sewerage Authority.


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