Local firms must not be left out

There have been objections to the award of a $500-million construction contract to a Chinese firm to build the southern campus of the University of the West Indies, on a number of grounds. For one thing, as far as the public has been made aware, it is a return to a procurement model that did not result in development of the sector locally and led to leakage of hard-earned foreign currency.

While they were still in opposition, elements of the present government were severely critical of the wholesale award of contracts to foreign firms. Senator David Abdulah was one of those. It is refreshing that he is now reminding his colleagues of their previous position—on which he at any rate has remained consistent.

Describing the renewal of this trend as a worrying sign, he urged, “Our major projects must be done by local firms so we build our own capacity. “It is not like we don’t have local capacity to execute these projects.” Senator Abdulah, a trade unionist, even urged that businesses should work with the labour movement to lobby for a national policy on local content.

It is not sufficient for UWI officials to say there was transparency in the award of the contract and the lowest bidder won out. There has never been an official statement on the value of the several contracts awarded to foreign contractors to construct government projects and infrastructure. What is certain is that it totalled several billions, and that there was little transfer of technology and learning to the local construction sector.

The national community needs to know how engaging the Chinese contractors will spur growth and development in the construction sector. Surely it is to be expected that, in addition to the buildings and infrastructure, when a government spends such large sums on foreign contractors there must be provision in the contract to build the local industry, so that in time local contractors will have the capacity to take on the job as main contractor.

In fact it was often observed during the period of widespread Chinese construction that Chinese workmen were involved in unskilled labour, such as pushing wheelbarrows and cleaning sites. It could only make sense for a government to utilise such large sums in such a manner that local industry, contractors and workers will gain long-term benefit. The university therefore has to say what kinds of arrangements have been put in place in this award to foster such development.

Locals, from the time of the Amerindian villages through to the 21st century, have been constructing buildings and infrastructure, including sophisticated offshore platforms for use by the energy industry, roads, bridges and other structures. Complex, multi-million-dollar construction projects are not beyond the scope of their ability.

Even beyond the awarding of this contract, small countries and regions such as ours must be mindful of the need to structure the award of contracts in a manner that favours locals. When the United States Government structured and awarded contracts for the reconstruction of Iraq, which firms received the lion’s share? American firms, of course.

Agreement on the procurement of services under the Singapore Issues is still to be resolved in the Doha Round of trade negotiations. In these negotiations, the developing world, led by the likes of Brazil, refused to budge as industrialised countries, especially the US, have given little indication they are ready to remove barriers to agricultural products from the South. The flow of benefits should not all be in one direction.