Government officials say foreign workers will be needed to bolster the local labour pool’s ability to handle the large-scale development projects in the pipeline.
Local contractor, Richard Wilson, responded to the government’s recent announcement that it will include in all future heads of agreements a mandate that Bahamian contractors be used to build the developments.
Mr. Wilson has concerns about whether The Bahamas’ labour pool can handle a project the size of the $500 million Ritz-Carlton Rose Island.
Labour Minister Vincent Peet confirmed the dearth of the local pool of construction workers.
“We know that because of the vast numbers of investments coming on stream that there will be a need to bring in some foreign labour, but we want to reduce that number to the minimum,” Minister Peet said.
Prime Minister Perry Christie on Monday hinted at a “major” labour initiative to be announced “shortly” that will address this issue, but would not be more specific. Minister Peet confirmed that the government was working on something, but would wait for the prime minister to elucidate the policy.
“We are trying to certainly expand the base and to provide more skilled Bahamian labour to piggy back on and build on what we have announced at Kerzner and Baha Mar,” he said.
The labour minister agreed with concerns raised by Mr. Wilson, who is managing director of Cavalier Construction, builders of Kerzer International’s Phase Three on Paradise Island.
Mr. Wilson said the local construction market is “saturated” with projects like Kerzner’s convention centre and Baha Mar, which is scheduled to begin construction in 2007.
“That’s a concern,” Mr. Peet responded. “Of course that’s a concern.”
He called on all Bahamians who want jobs, especially young men, to “step up to the plate,” promising that the Department of Labour would find them “employment opportunities.”
Even though the Rose Island project is not slated to begin “major construction” until 2009, Mr. Wilson feels that there are still likely to be problems finding enough workers to construct the more than 400 residences envisioned for the resort development.
Minister of Financial Services and Investments Allyson Maynard-Gibson clarified the provision included in the Ritz-Carlton Rose Island “heads of” agreement.
The agreement calls for Bahamian contractors who meet the developers’ standards and are price competitive to build only the residences. There is no guarantee that Bahamian contractors will build the 95-room luxury hotel, or the condo units or any other structures on Rose Island.
Mr. Wilson said that the government’s mandate that developers use Bahamian contractors for their projects, with caveats included, is “a romantic solution to the problem.” Aside from the labour pool concerns, Mr. Wilson mentioned a few other problems local contractors might have.
“There is a business decision here, whether you want to get involved in it,” he said.
He explained that Bahamian contractors would have to ask themselves whether they had enough supervision to take on a project of the Ritz-Carlton’s plan for Rose Island, which calls for a total of more than 400 residences.
He said there are also logistical worries over getting the materials to the site, and a possible “100 percent performance bond” that would be, in his words, “totally prohibitive to Bahamian companies.”
The performance bond – a kind of “owner’s insurance,” as he called it – binds the contractor to complete the project according to the terms of the contract, or open their business to liability.
“Realistically, we wouldn’t be considered,” Mr. Wilson said, speaking about the viability of Bahamian contractors if the developers insisted on a 100 percent performance bond.
Minister Maynard-Gibson stated emphatically that the government has ensured that no developers insist on the 100 percent performance bond, and in fact Mr. Wilson told the Journal that Kerzner was “very realistic” about that bond for Cavalier Construction.
According to Minister Maynard-Gibson, “there is no circumstance where we have had any resistance (to the government’s policy that the bond not be insisted upon).”
“Its not theory,” she said of government preventing developers from insisting on the 100 percent bond. “It has actually happened. The prime minister has been adamant about us in my ministry ensuring that it does happen.”
The developers of the project, Ritz-Carlton Hotel Company, Fast Track Associates and Urgo Hotels, have promised that Bahamian contractors will build the more than 400 proposed residences on the island, provided they meet those conditions.
Mr. Wilson told the Journal that there is no question that a handful of local contractors have the expertise to measure up to the Ritz-Carlton’s standards, and that the question of price competitiveness has already been answered.
He said it was unlikely that the 400 plus residences that local contractors are supposed to build will not all come on stream at the same time.
Even given that fact, he pointed out, there is no guarantee that the projects like Baha Mar, scheduled to be begin construction in 2007, and other major developments will be completed in time for the labour pool to make the transition from one major development to another.
Mr. Wilson said that a lot depends on the success of the apprentice programme jointly sponsored by the government, Kerzner International and Baha Mar, which he called “an excellent idea.”
He noted that despite local expertise, management capability and logistical ability to oversee a project like the Ritz-Carlton Rose Island, developers would usually rather use a contractor they are familiar with, even though The Bahamas is a different environment and locale.
He also noted that with a project on the scope of the Rose Island development, the financial institutions involved do not usually feel that local contractors have the wherewithal to complete the project.
He said local contractors could in fact get the job done “if they (the developers) are transparent in what they say.”
Agreement to what government officials called an “historic” clause in the heads of agreement – the mandate to employ Bahamian contractors and real estate agents in the $500 million Ritz-Carlton Rose Island project – came “at the nth hour,” according to Prime Minister Christie.
“I am truly pleased by your willingness to demonstrate-your intention to be good partners in our country by at the ‘nth’ hour, I am advised, agreeing (to the mandate that Bahamian real estate agents and contractors get the opportunity to participate in the development),” Mr. Christie said.
Asked whether the government demanded guarantees regarding job creation, Donald Urgo – one of the developers of the project – said he would not go into specifics.
“There were a lot of discussions with the government – we had a very, very successful discussion with the government,” was all Mr. Urgo chose to say on the matter.
By: Quincy Parker, The Bahama Journal
