Shal­iza Has­sanali

The $1.9 bil­lion al­lo­cat­ed to the Hous­ing Min­istry for fis­cal year 2011/2012 will be less than ad­e­quate to kick-start the stalled con­struc­tion sec­tor. Pres­i­dent of the Hard­ware Deal­ers' Co-op­er­a­tive So­ci­ety Ltd Joseph Cal­len­der feels $4 bil­lion would have been re­al­is­tic for the stag­nant con­struc­tion in­dus­try to en­joy a brisk turn around in 2012. Soon, Cal­len­der said, his as­so­ci­a­tion would meet to dis­cuss the non-pay­ment to con­trac­tors who owe sig­nif­i­cant sums to hard­ware deal­ers. There are ap­prox­i­mate­ly 300 hard­ware own­ers in T&T.

With­in hours of Fi­nance Min­is­ter Win­ston Dook­er­an pre­sent­ing the $54 bil­lion bud­get on Oc­to­ber 10, Cal­len­der said he was most dis­ap­point­ed since it did not put mech­a­nisms in place to spur the econ­o­my, es­pe­cial­ly the con­struc­tion in­dus­try which has been at a vir­tu­al stand­still. "There is no con­fi­dence in the econ­o­my due to lack of sales and stalled con­struc­tion projects." The de­lay in pay­ment, Cal­len­der said, has led to op­er­a­tors clos­ing their doors, fi­nan­cial in­sti­tu­tions down their backs and mount­ing bills. Oth­ers who are feel­ing the pinch had to down­size staff while bank loans have been at­tract­ing high in­ter­est rates there­by putting fur­ther strain on their busi­ness­es.

"They (hard­ware deal­ers) can't even make pur­chas­es. Hon­est­ly, the Gov­ern­ment seems not to care whether these peo­ple go un­der or sur­vive." Cal­len­der said a few of the as­so­ci­a­tion's eight mem­bers are owed "a tidy sum". With Di­vali just three days away and Christ­mas around the cor­ner, Cal­len­der said some hard­ware own­ers are bawl­ing with poor sales and emp­ty in­ven­to­ry be­cause sup­pli­ers are with­hold­ing goods due to lack of pay­ments. Last year, Cal­len­der said, three hard­ware op­er­a­tors were forced to close their busi­ness­es be­cause of dwin­dling sales and fi­nan­cial con­straints. Cal­len­der pre­dicts that for the end of this year, more busi­ness­es will have to close their doors.

Pie in the sky

Cal­len­der de­scribed the con­struc­tion of Gov­ern­ment's pro­posed 6,000 hous­es and land for the land­less pro­gramme-which will al­low 10,000 suc­cess­ful ap­pli­cants to con­struct two or three bed­room units-as a "pie in the sky". "I don't think it can be achieved." Stat­ing that there are many stalled hous­ing projects be­cause of out­stand­ing monies to con­trac­tors by the HDC, Cal­len­der won­dered when re­me­di­al work to scores of un­oc­cu­pied HDC hous­es will be­gin so dis­tri­b­u­tion can take place. "The fact is that they (HDC) are blam­ing the con­trac­tors for shod­dy work­man­ship when the prob­lem lies in poor su­per­vi­sion over the years."

Some banks, Cal­len­der said, have even black­list­ed con­trac­tors and hard­ware deal­ers. Not­ing that the con­struc­tion sec­tor is labour in­ten­sive with job spin offs, Cal­len­der said they are fur­ther af­fect­ed by pri­vate en­ter­prise im­port­ing build­ing ma­te­ri­als to make a quick dol­lar. "There is so much these guys have had to fight up with to con­duct their le­git­i­mate busi­ness­es." Cal­len­der said the time has come for ba­sic build­ing ma­te­ri­als to be VAT ex­empt.

Sit­ting duck

Ashraph Mo­hammed of Mo­hammed Mar­ket­ing Ltd in Princes Town, said while all his pay­ments were ac­count­ed for, "monies have not been col­lect­ed be­cause of Gov­ern­ment's ac­count­ing sys­tem." Ad­mit­ting that the pay­ment struc­ture has been at snail's pace, Mo­hammed said this was crip­pling his busi­ness. Mo­hammed said the time frame in which monies are paid var­ied.

He men­tioned be­ing owed by one min­istry for as long as nine months. "It's not a ques­tion of lost bills. Is that if they don't have the mon­ey and they is­sue these or­ders, and once you are a bond­ed (con­trac­tor) you have to sup­ply it. You come like a sit­ting duck af­ter that. You have to wait." Mo­hammed said it was dif­fi­cult to re­stock when mon­ey is not forth­com­ing. The longest Mo­hammed said he was pre­pared to wait is 60 days. "If af­ter this pe­ri­od and you are not paid, then you are left in a bind with your sup­pli­ers and bankers. This, Mo­hammed said, was the main prob­lem small hard­ware deal­ers have been hav­ing.

Liv­ing in lux­u­ry

Man­u­fac­tur­er of build­ing ma­te­ri­als and san­i­tary ware in Freeport and Point Lisas, Sal­ic Reesal of Reesal In­dus­tries Ltd con­fessed to be­ing heav­i­ly in­debt­ed. Reesal sup­plies ma­te­ri­als to over 250 hard­ware op­er­a­tors who would dis­trib­ute to con­trac­tors, some of whom are await­ing pay­ments for as long as three years to 18 months. Stat­ing that his fi­nances were at the low­est, Reesal said he had to ap­proach the bank to keep his busi­ness "float­ing". Had he not ap­proached the bank, Reesal said, he would have had to send home 100 of his 155 em­ploy­ees.

Though some con­trac­tors have been paid by the Gov­ern­ment, Reesal said the debt was still out­stand­ing. "Some of these peo­ple (con­trac­tors) may have got­ten some of their monies and they are open­ing new busi­ness­es. So what I am do­ing is ask­ing my at­tor­ney to look af­ter these debts. They are lux­u­ry­ing them­selves." For 2011, Reesal said, his sales stood at three per cent less than 2010. "Cer­tain things that we don't man­u­fac­ture in Trinidad, we are now ask­ing the Gov­ern­ment to im­pose du­ties on those stuff." This, Reesal said, would as­sist in keep­ing them op­er­a­tional. An e-mail sent to Hous­ing and En­vi­ron­ment Min­is­ter Dr Roodal Mooni­lal on Wednes­day seek­ing to de­ter­mine when HDC con­trac­tors will be paid and how much was out­stand­ing was not re­spond­ed to.

Con­trac­tors owed

Pres­i­dent of the T&T Con­trac­tors' As­so­ci­a­tion Mervyn Chin has put the debt to con­trac­tors at $600 mil­lion. But, this is a drop in the ocean com­pared to the $7 bil­lion Gov­ern­ment had orig­i­nal­ly owed the con­trac­tors up to last No­vem­ber. On Wednes­day, Chin said while the bud­get sounds promis­ing, Win­ston Dook­er­an had not hint­ed how much con­trac­tors will be paid in 2012. "The fig­ures owed should have been clear­ly out­lined in Dook­er­an's 2011 bud­get."

A sur­vey con­duct­ed by the Cen­tral Sta­tis­ti­cal Of­fice re­vealed that T&T has ap­prox­i­mate­ly 4,000 large to pet­ty con­trac­tors, Chin said. "By and large there are about 20 ma­jor con­trac­tors that mon­ey is owed to." These big con­trac­tors, in turn, Chin said, owe small con­trac­tors. Be­fore the bud­get, Chin said, some con­trac­tors were paid but he could not give a fig­ure. Chin said the con­struc­tion sec­tor gen­er­ates 20 per cent of the coun­try's GDP. "The debt is one thing! Not know­ing when you will get paid, is an­oth­er."

Chin feels that it would be bet­ter if Gov­ern­ment just lays the cards on the ta­ble and tell the con­trac­tors if they will be paid. "Tell us that we should ei­ther seek lit­i­ga­tion or cut our los­es and move on. If their hands are tied they should tell us. But don't have us dan­gling." Chin said con­trac­tors have be­come "vic­tims of cir­cum­stance". He added: "Let us hope that with this bud­get, funds are re­leased in a time­ly fash­ion."