Construction industry group talks tough

THE JAMAICA Consultative Committee, the umbrella representative of the sectors within the construction industry, has deepened its analysis of the problems facing its players, with the view of encouraging action from Government.

In an addendum to its original 'Construction Revival 2001' report put out earlier this year, the JCC paints a picture of skewed competition, costly delays brought on by a slow bureaucracy, and some non-facilitator regulations ­ but with recommendations for improvements.

Referring to the thorny issue of 'political interference', the Committee has endorsed the idea of an enquiry by the Office of Contractor-General.

"The politicians continue to declare that they do not interfere in contractors' business issues. However, their very actions create enormous monetary costs to the country and incalculable harm to the very people they claim to champion, by the encouragement and entrenchment of political dependency and inappropriate social behaviour."

The JCC has put a price tag on bureaucratic delays encountered in the normal course of business, which it quantified at $640 million, and notes that the attendant consequences of 'red tape' are late delivery, and increased cost of projects undertaken.

Between January-November 2000, only 53 per cent of submissions to the KSAC had been processed, the Committee said, illustrating its case.

COMPETITION

Pressing for local expertise to be better harnessed and utilised, and looking back at the past 5-10 years, the report points out that foreign consultants are being used increasingly, with 30 per cent of the total value of construction jobs having gone to overseas based contractors.

The JCC also notes that the case of lower tenders better technology and better productivity, often made for choosing foreigners for large jobs over locals, can be challenged with examples of the ongoing South Gully drain construction, the Negril and Ocho Rios sewerage projects, and Norman Manley Airport Rehabilitation ­ each of which were problem-plagued and foreign led.

The report defends home-based talents as in "Projects like the Ocho Rios Cruise Pier Expansion and Gordon Cay, executed by local professionals, had excellent implementation results."

The JCC has appeared at least twice before a special parliamentary committee as it presses its lobby efforts. The group was given a hearing after it challenged assertions by the Prime Minister this year that the industry was doing well.

CONTRACTS

The 13-page addendum notes that while Jamaican firms have 80 per cent of the market on construction contracts, the jobs all fall below $50m in value, whereas the larger $200m-$400m contracts, totalling 16 per cent, went to foreign firms.

Used to chasing smaller projects, the local firms maintain sufficient resources to match. "When internationally funded jobs were offered, the local firms were therefore required to increase their capabilities at short notice" to compete, largely unsuccessfully.

But even as the JCC is asking Government for a more level playing field, its own report names the state as a main competitor.

"...Government's land resources, access to money, power to direct or bypass the approval process, and their economic policies present unfair competition. Examples exist in housing construction, resort hotels and financing."

Next week, look for some of the solutions suggested by JCC.

Back to Real Estate