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Construction sector’s 2010 woes

Published: 
Thursday, December 30, 2010
BUSINESS GUARDIAN
Source: Central Bank Web site 2010 figure is for the quarter ending in March

The year 2010 was one of crisis for the construction industry. Between October 2009 to March 2010, almost 12,000 jobs in the sector were lost. The sector saw the Uff Commission of Inquiry into the Urban Development Corporation of Trinidad and Tobago (Udecott) and construction sector making particular recommendations. Calder Hart, former chairman of Udecott, left the country in March, shortly before the news broke that he had been asked by then Prime Minister Patrick Manning to resign. Towards the end of the year, contractors demanded billions owed to them by the Government. The list of the construction sector’s woes is long. It seems as though the troubles of the economy and this sector went hand in hand.

Contractors
The year is ending and the members of T&T Contractors Association (TTCA) still have not received the money owed to them. Mervyn Chin, vice-president of the TTCA, said their members have not received any money from the Government—an issue which dominated the sector in 2010. “Finance Minister Winston Dookeran said $2.7 billion has been paid out, but I want to say that it was not to our members. Christmas has come and gone and we have not got any money as yet,” Chin said. In early December, TTCA president Mikey Joseph said the $2.7 billion paid by the Government went to mostly foreign-based contractors. Chin said the TTCA recommended to Government that a special Cabinet-appointed committee be set up to deal with the matter but, so far, “there has been no resolution to the matter.”
Speaking on what the TTCA expects for 2011, Chin said that things look better as Government has promised to get major infrastructure projects going.

He said Government has said the mega projects will be the start of the construction of the highway to Point Fortin and the Mamoral Dam and Reservoir. “The Government said that 27,000 people will be employed on the building of the highway to Point Fortin, but I think that’s a big number. Winston Riley, the last president of the Joint Consultative Council (JCC), said he doesn’t think that more than 10,000 people will be employed on that project, though,” Chin said. Chin believes that these projects will reduce the rate of unemployment and help alleviate some social ills, like crime and poverty. “These projects are good news as there has not been any major projects for the last year and a half,” he said.

Projects 2010
Last year will remembered for the opening of some big projects, like the north campus of the National Arts and Performing Academy (NAPA) and Tower C of the International Waterfront project. In 2010, there were smaller construction projects in the areas of ports, agriculture and energy. Apart from a slower economy in 2010, it was the year in which the Uff Report made recommendations on transparency in the construction sector, especially with regard to specific projects that Udecott managed. Despite a change of government, work continued on three major projects, the Brian Lara Cricket Stadium in Tarouba, the South Academy for the Performing Arts and the Chancery Lane Complex in San Fernando.According to information from the Government’s publication, Facing the Issues: Turning the Economy
Around: Projects for the development of industrial sites and ports executed by the National Energy Corporation (NEC) continued to progress during the fiscal year.

Achievements included:
1. Completion of design for a fish landing facility in Mayaro; completion of sand blasting and painting of sheet piles; and, commencement of piling works, installation of a silt curtain enclosing the facility was completed, and construction of approximately 73 metres of rock revetment and approximately 2,800 cubic metres of fill compacted.
2. Completion of the docks at Brighton Port and issuing of a certificate of environmental clearance (CEC) for commencement of dredging works at Brighton Port to be completed in the first quarter of 2011 at an estimated cost of $82 million.
3. The Alutrint Dock and Storage Yard, however, was 99.5 per cent completed by Pihl-Besix ApS for an overall cost of $200 million. The main features of this terminal are a new 307 linear metres dock with a dredge water depth of 12.8 metres. which will be able to accommodate bulk cargo of up to 30,000 DWT (deadweight tonnes) and a storage yard area.

In energy:
The National Petroleum Marketing Company Ltd (NP) expended the entire allocation of $20 million on the continuation of its programme of construction and upgrade of service stations, including replacement of underground storage tanks, aimed at modernising the retail assets of NP. The service stations at Maraval and Duncan Village, two of the largest service stations ever constructed in Trinidad, were completed and commissioned at a cost of $6 million and $12 million, respectively. The full allocation of $455 million under the International Development Fund (IDF) was utilised for the continuation of major construction and development works by state enterprises in the energy and manufacturing sectors. Construction and installation by the National Gas Company of a multi-fuel pipeline from Point-a-Pierre to Piarco via Caroni progressed to 77 per cent completion overall.

In agriculture:
In fiscal year 2010, the Caroni Lands Development Programme continued with an allocation of $330 million financed by the Infrastructure Development Fund. The full allocation was used by the Estate Management Business Development Company (EMBDC) for the continuation of infrastructure works.
This was for retention ponds, drainage works, repairs to underground sewerage systems and water systems, including fire hydrants and general drainage.


Top recommendations from UFF report

1. There should be a full investigation by an appropriate law enforcement authority into the award of the Ministry of Legal Affairs contract to CH Development, including the role of Calder Hart and the conduct of the board in not ensuring that an enforceable guarantee was given by the parent company of CH Development.

2. There should be a full investigation by an appropriate law enforcement authority into the award of packages 3 and 5 to 8 for the Brian Lara project, particularly as to
(a) why no formal terms were drawn up dealing with advance payments
(b) the manner in which Udecott interpreted the right to advance payments including advice sought and received
(c) the accounting procedures employed by Udecott for making advance payments and repayments and why no vouched accounts were drawn up.
3. There should be a review of the decision of NH International (Caribbean) vs Udecott and measures, if necessary legislative, put in place to ensure that bodies making decisions involving public money are open to challenge by judicial review.

4. It should be assumed that the construction industry is vulnerable to potential corruption and steps should accordingly be taken to avoid actual corruption following established guidelines and recommended practiceslaid down by Transparency International and its affiliates.

5. Criminal activity and serious threats to life and security affecting construction projects are to be taken with utmost seriousness. Contractors who are prepared to undertake work in such conditions are entitled to the fullest support from all quarters.

6. For the Brian Lara project, there should be an investigation into the planning and administration of the whole project including the measures taken by Udecott’s managers:
(a) to control and reduce delay to the project
(b) to review and approve the design of the steel superstructure and
(c) to consider the advice of Turner Alpha Limited, that the contract with Hafeez Karamath Ltd should be terminated.

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