Five Bahamian contracting companies were invited to bid on the $40 million expansion of the Harbourside time-share. The contracting companies invited to bid are Cavalier Construction, Sunco, Osprey, Mosko and Carl G. Treco, the big five of Bahamian contractors.
Not since Cavalier constructed the Sheraton Grand over 20 years ago have Bahamian contractors had the opportunity to bid on a major project as the lead contractor a contractor told the Journal on Monday. He said the project which has a 14-month completion time, will let Bahamian contractors show what they can do.
ﾓItﾴs a tight schedule and whoever gets it will have their work cut out for them but it is an opportunity for us to show what we can do,ﾔ the contractor said.
Chairman of the Bahamas Contractors Association (BCA), Robert Myers confirmed that the bids had gone out to Bahamian firms and that this was a significant step forward but that there were still many obstacles that were hobbling the proper development of the industry.
On major contracts, the general contractor is usually required to put up a bond equal to the value of the contract. The performance bond requirement has been a major reason why Bahamian contractors have been unable to bid on major construction projects.
Mr. Myers said that the problem was that local insurers had difficulty placing these bonds with re insurers and secondly ﾓit is very expensive.ﾔ
So will the winner of the bid for the time-share project be able to meet the 100 percent bond requirement?
ﾓI have received copies of the bid package and it says here in the addendum that the cost of the performance bond must not be included in the bid. So that means it has been waived, at least on the Marina Village project,ﾔ Mr. Myers explained.
He agreed that it would be logical, if Kerzner International Development were providing an opportunity for the construction industry, that it would waive the 100 percent bond requirement since it is usually impossible to get.
ﾓWe had a lot of meetings with Sun and explained our position and what we felt needed to be done and so what you see happening is in part due to the meetings we have had,ﾔ Mr. Myers said.
Despite this step in the right direction, all is not as it could be with the construction industry.
He lauds the dialogue between the present administration and the BCA but is cautiously optimistic. There have been dialogues before and with little to show for it.
The financial services sector a decidedly more powerful lobby had to wait until December 2003 to see the Investment Fund Act finally passed into law after 2 years of wending its way through the legislature. The problem is not the system but the political will for when it mattered as the former prime minister demonstrated, with the 2000 bundle of legislation, which profoundly shook up the financial services sector, it can be done.
ﾓLook at how long the engineers have been waiting for their bill,ﾔ Mr. Myers said, referring to the Engineers bill, which is presently under attack in the Senate. ﾓThere is a lot of talk but people need action. We are not asking for anything that does not already exist in every developed country.ﾔ
Mr. Myers said that the government had said they would put the one percent bond in place to counter the practice of foreign contractors coming in and taking jobs without paying business licences.
ﾓI donﾴt know if they have done that yet,ﾔ he said, ﾓbut that is just one of the many things that are affecting the industry. A lot of the practices that we have been speaking about and have in our position paper are still going.ﾔ
Among the problems facing the industry and preventing its development are enforceable standards governing how contractors perform their work and the absence of industry-wide adherence to an enforceable, standard code of ethics.
Mr. Myers said that the industry had to be developed for the benefit of Bahamians.
ﾓWe are not saying you cannot have outsiders come in but there must be some accountability,ﾔ he said. ﾓRight now there are projects in Abaco, Eleuthera and Exuma that we only know of after the work starts. And these are projects that Bahamian contractors did not bid on because they did not know.ﾔ
The problem was highlighted on a recent appearance of Issues of the Day by Minister of Financial Services and Investment, Allyson Gibson when a caller asked the Minister where and to whom a contractor could submit bids. ﾓAll we want is the opportunity to submit the bid,ﾔ the caller had said.
Mr. Myers said that the BCA is proposing that there be a body, that includes contractors and that is able to contribute when major investment projects are being negotiated. He said with their knowledge they can say what the construction industry can do and what it cannot do. The lack of a rationale approach to developing the construction industry with the same dedication shown to tourism and financial services hurts the overall development in The Bahamas.
ﾓLet me tell you what it means for Bahamians not to get contracts,ﾔ he said. ﾓI had been working for over year, nearly two years, trying to get a contract on the Emerald Beach project. The guy in charge lied to me. He kept telling me that the plans were not ready and when I went to my supplier in Florida to source my bid, he told me that the contractor was already ordering his supplies. As a result of not getting that contract, I lost about $250,000 and I can tell you it was not easy riding out 2002 2003. If I had gotten that contract, I would have been in a better position.
Mr. Myers pointed that when construction contracts, which can go to Bahamians, end up with non-Bahamians, there are few if any benefits for Bahamians.
ﾓProjects like that are what I call ﾑmaid and masonsﾴ projects,ﾔ Mr. Myers said. ﾓThe non-Bahamian contractor brings in money to pay his masons. The money is wired from a bank in New York to another bank in New York or Florida and except for what he pays in wages, nothing is contributed to the Bahamas. The profits donﾑt even pass through our banking system!ﾔ
Mr. Myers, who is not against competition but wants to see a regime established to enable Bahamians to compete in their own country, feels very strongly about the unnecessary disadvantages and obstacles Bahamians face in the construction industry.
ﾓWhen we lose work to outsiders it means we cannot keep our Bahamian employees,ﾔ he said. ﾓI have a construction company and all my employees are Bahamians, tile layers, carpenters masons, when I lose jobs to outside contractors my employees have to find work to feed their families. After a while they leave construction and go into the hotel industry. I canﾴt go to them and say ﾑcome backﾴ. He wont come back because he does not know if there will be steady work.ﾔ
Another effect of the present state of affairs in the construction industry is that contractors cannot plan ahead and purchase equipment because of the uncertainty in the business which they believe can be better managed with appropriate legislation.
ﾓYou go out and buy equipment and then it has to be lying around, as mine is now, for you have no work for it,ﾔ he said. ﾓWhat we are asking for is what every other country does, protection for its own interests. All we are saying is that we can be smart without being unfair.ﾔ
There is an urgent need for reform, Mr Myers said. He said the Bahamian consumer would be protected if they knew that, like other professionals such as lawyers, doctors, engineers, architects and accountants, contractors are governed by professional standards and a code of ethics.
ﾓWe need the regulations before the FTAA comes because once the FTAA is established contractors can come in and if we do not have a code governing the industry then Bahamian consumers will suffer,ﾔ he said. ﾓWhen you have given your money and he leaves what can you do? So this is not just for the contractors it is for everyone. And we need it.ﾔ
ﾓWe have heard a lot of talk before,ﾔ he said, ﾓbut this government seems sympathetic. We just have to see what they do.ﾔ
C. E. Huggins, The Bahama Journal
