March 21st, 2023
We see it as a big opportunity; supporting the capacity building in those countries that have not experienced the level of construction that we have experienced.
The industry has not been immune to the ongoing effects of the pandemic and latterly, the Russia-Ukraine conflict. The difference, however, is that construction represents a critical sector of the country and as the road to recovery continues, that importance is encapsulated in the words of President of the Trinidad & Tobago Contractors Association (TTCA), Glenn Mahabirsingh, “Construction is the only industry capable of creating a significant amount of employment in a very short space of time.”
Delays in shipping, swings in prices of materials and supply issues are but some of the challenges that the sector has had to endure since its reopening in July 2021. Mahabirsingh provides a window into the direct effect upon contractors even before the soil is turned, stating “We have seen a rapid increase in prices of materials making it difficult to respond to tenders because most suppliers give their validity for a period of seven days but now the volatility of prices makes the tender process a significant risk item as contractors are being asked to hold their tender price for up to 90 days.”
The TTCA is trying to mitigate the issue, explaining that they are lobbying for clients to include in their contract an allowance to treat with material price fluctuation, “That provision would bring a fair resolution if there were price changes to materials. It would be fair to the client as well as the contractor, not leaving any party out of pocket.”
The world is playing catch-up after the lockdowns. Mahabirsingh notes that this is the other main challenge to overcome. “It is now necessary to have a significant amount of effort into planning because there is also the constraint in terms of space availability in shipping materials.
So together, it’s product availability, pricing volatility and shipping availability.”
Fortunately for the industry, materials that are produced locally – such as cement and aggregate – are in good supply but even within that, there are still external threats, as the TTCA head elaborates, “The machinery, plants and equipment to produce them locally are foreign items. Spare or replacement parts, in the event of a plant breakdown, must be imported at short notice, which comes back to the availability issue.”
The subject of imports leads to consideration of the foreign exchange matter, namely how contractors can generate forex for the T&T economy. The answer lies in expertise. “The construction industry in Trinidad is a mature industry. There are a lot of plants and equipment, plus we have a huge skill set in terms of management and technical capacity. This has arisen over the last fifty-plus years with the booms that we have experienced. We must allow the industry to earn foreign exchange by providing services for other CARICOM countries,” says Mahabirsingh.
“We see it as a big opportunity; supporting the capacity building in those countries that have not experienced the level of construction that we have experienced.” He notes that construction of major highways, bridges, high-rise buildings and mass housing is the particular skill set needed abroad and that T&T has in abundance. “A lot of our members already ventured into Guyana, Grenada and St Vincent but over the last year we have seen more members, who had not traditionally ventured into those territories, now going outside of T&T, which is definitely a positive.”
To support that export and to ensure the growth of the sector towards 2023 and beyond, the construction industry knows that there is some reliance on public sector support. Mahabirsingh explains, “One of the areas that the Association, private and government sectors can collaborate on is with training and development, developing a skilled workforce. Carpenters, masons, welders and other trade workers are critical because everything in the industry has to be bolted, fastened, or welded together. There is always the opportunity for Government to ensure that there are adequate training programmes to support the future of the industry.”
The ongoing procurement legislation matter is seen as vital for the industry and all stakeholders. “One of the provisions in the legislation is for State enterprises to publish their intended procurement plan for the next year. That data will help contractors understand what projects are in the pipeline, how to plan in terms of staffing and resources, and what to respond to, so that large contractors would target large projects, medium-sized contractors would target medium-sized projects. You won’t have large contractors operating in the small contractors’ areas.” It would lead to greater efficiency and focus. “Contractors will know which areas they want to respond to and create a higher level of strategic planning for the industry.”
For the immediate future, Maharbirsingh believes the importance of construction to the economy and its ability to create offshoot industries has created the necessary opportunities “State enterprises have a series of projects planned to support the industry, we note the relevant activity – notwithstanding the challenges – and know that we have the capacity to match it.”
by Sheldon Waithe