Andrea Perez-Sobers
Senior Reporter
andrea.perez-sobers@guardian.co.tt
The construction sector is heading into Monday’s national budget with contractors pressing the Government to address millions of dollars in outstanding payments for completed and certified work, warning that prolonged delays are putting businesses, workers and new projects under increasing pressure.
The Trinidad and Tobago Contractors Association (TTCA) is calling for a structured programme to settle verified debts owed to contractors and suppliers, including a dedicated fund of between $200 million and $400 million.
The association wants the Government to begin settling outstanding obligations during the 2027 fiscal year, with substantial progress towards clearing the debts by the end of fiscal 2027.
The issue has become a major concern for an industry facing reduced activity, foreign-exchange constraints and rising financing costs. Contractors who complete State-funded projects can wait months or years for payment, while still having to meet obligations to banks, suppliers, employees and other service providers.
Former TTCA president and contractor Mikey Joseph described the situation as increasingly difficult, with contractors reporting that they have been waiting as long as two years for payment after completing projects.
“To be owed after a project has been completed for two years, remember that you may be operating an overdraft facility. You have that interest that is basically compounded if you cannot service it properly,” Joseph explained.
The Joint Consultative Council (JCC) president Fazir Khan also raised concerns about outstanding payments, including VAT payments to contractors.
Khan reported that State agencies owe hundreds of millions of dollars to contractors and consultants for certified work that has gone unpaid for more than a year.
A JCC survey of contractors last month, based on 11 responses from 72 contractors, found more than $52 million in outstanding payments owed for periods exceeding one year.
Payment delays squeeze contractors
TTCA wants an inter-ministerial committee established to identify, verify and address outstanding certified payments owed to contractors and suppliers for State and ministry projects over the past 11 years.
The proposed committee would include representatives from relevant ministries, State enterprises and agencies and would be responsible for developing a structured settlement programme.
The association also wants the Government to consider flexible settlement arrangements, including a combination of cash payments and government bonds where appropriate and mutually agreed.
TTCA believes this could allow outstanding obligations to be resolved while giving the Government greater flexibility in managing its fiscal commitments.
For contractors, however, the issue is not simply about receiving money. Delayed payments can increase borrowing costs and affect their ability to retain workers and take on new projects.
Joseph described the impact on businesses as severe.
“And you’d be constantly in debt for two years. And then you can maintain your staff and do new projects and to get into other avenues,” he explained.
He also pointed to a slowdown in government work, making it more difficult for contractors to rely on new projects to compensate for delayed payments on completed work.
“As far as contractors, things are very, very difficult. And a lot of contractors have actually gone under over the last couple of years. And it is worse during this last 18-month period,” Joseph added.
TTCA’s position is that settling verified debts would inject liquidity into companies and allow them to meet obligations to suppliers and financial institutions.
The association also links the payment problem to employment. It reports that prolonged financial pressure has forced some contractors to reduce their workforces, while some remaining employees are working under temporary or casual arrangements.
That, TTCA argues, has implications for household stability and financial security beyond the construction sector itself.
The proposed $200 million to $400 million settlement fund is therefore being presented as a mechanism to release money already owed for completed work, rather than simply as additional construction spending.
Bitumen, roads and project visibility
Foreign exchange is another pressure point for contractors.
TTCA pointed to the closure of Petrotrin and the resulting reduction in domestic availability of bitumen, leaving contractors increasingly dependent on imports.
The association argues that foreign-exchange shortages have made it difficult to secure the currency required to purchase bitumen and other essential construction inputs.
The problem is compounded when contractors receive payment in T&T dollars after incurring high foreign-exchange costs to execute projects.
TTCA described this as a mismatch between contractors’ financial obligations and the currency in which their receivables are settled.
The association also raised concerns about the condition of the country’s infrastructure, particularly roads and highways.
It contends that a significant portion of the road network has deteriorated extensively, with some roads severely compromised or virtually impassable.
The ability of contractors to participate in the rehabilitation and reconstruction of infrastructure is therefore tied to the Government’s capacity to finance and pay for the work.
TTCA is also seeking greater visibility into the Government’s construction programme.
It wants a comprehensive Construction Industry Projects and Procurement Database established through DevelopTT or another appropriate organisation.
The database would provide contractors and suppliers with advance information on projects expected to be tendered during the 2027 fiscal year, including, where possible, the number and type of projects and procurement timelines.
Greater visibility, the association contends, would allow companies to plan their financial, human and material resources, prepare for tenders and improve competitiveness.
The request comes as contractors face an industry in which the timing of projects and the timing of payments can have significant consequences for business survival.
Joseph also pointed to another longstanding problem: the length of time involved in obtaining approvals.
He indicated that legitimate approval processes can still take two to three years in some cases, creating another barrier for developers and contractors.
Procurement reform under scrutiny
The construction sector’s concerns also extend into public procurement.
The JCC remains critical of amendments brought by the present administration to the Public Procurement and Disposal of Public Property Act and the resulting changes to the oversight role of the Office of Procurement Regulation (OPR).
Khan maintains that the amendments have reduced the effectiveness of the legislation and the regulator’s ability to promote value for money and sustainable procurement practices.
He warned that public allocations for areas now exempt from OPR oversight could face greater risks in terms of value for money.
Khan also pointed to Trinidad and Tobago’s Corruption Perceptions Index record over the past decade, which he placed between 41 and 43. He noted that the country recorded a score of 43 in 2023, when the procurement legislation was operationalised.
The JCC’s position is that procurement reform was intended to address longstanding concerns surrounding public expenditure and procurement practices.
Khan maintains that the organisation had expected the benefits of the legislation to take at least five years to emerge, given the learning curve and need for capacity building.
Joseph is also sceptical about the argument that weakening procurement oversight will necessarily allow government housing projects to move faster.
He pointed out that before the OPR framework was fully implemented, the State also struggled to deliver 2,000 houses annually.
“The only difference was there was a lot of corruption in state departments in terms of the award of contracts,” Joseph contended.
He argued that procurement reforms had created mechanisms through which contractors and citizens could challenge procurement decisions, adding that removing those safeguards could return the country to practices that produce less value for public expenditure.
For contractors, the immediate issue remains payment.
Joseph argued that government should not award contracts without having the resources to pay for them and urged contractors to assess the risks of relying heavily on State-funded projects.
“Probably just leave state projects alone. Try to see how we can survive without that,” he concluded.
TTCA, however, is looking to the 2027 budget for a more structured response, arguing that resolving certified debts would help stabilise contractors, protect employment and release funds into the wider economy.
With the budget due to be presented on Monday, the sector’s concerns place two related questions before policymakers: how to address obligations already incurred by the State and how to ensure future construction spending is supported by stronger payment, procurement and project-planning systems.
For an industry responsible for much of the country’s infrastructure delivery, the outcome will have implications well beyond contractors’ balance sheets.
