The two-month national lockdown enforced by the Government on May 3 as a measure to curb the spread of the COVID-19 virus has adversely affected the State’s housing programme with projections for 1,800 housing units by the end of 2021 now being scaled back to 1,000 units.
Hundreds of construction workers are scheduled to resume work this morning at public and private sector projects that had been put on hold due to the restrictions imposed by the Government.
While the green light was given by Prime Minister Dr Keith Rowley on Saturday for the construction sector to resume operations along with hardware, supply stores and quarries, president of the T&T Contractors’ Association (TTCA) Glenn Mahabirsingh has expressed concerns that it will not be smooth sailing for some of his members who have been battling an increase in building materials, higher shipping costs, lack of foreign exchange and monies owed to them by the State for services provided.
Responding yesterday to several WhatsApp questions by Guardian Media about the state of HDC’s readiness to restart work on various housing projects across the country, its manager of corporate communications Dike Noel admitted “the restrictions which were implemented as a result of the increase in COVID-19 cases in May affected the State construction sector, including HDC projects. As such, a total of
However, Noel, said, “At the start of the year, the HDC projected to complete 1,800 units. However, due to the restrictions and subsequent shutdown, the HDC has revised this figure to 1,000 units for 2021.”
Noel said the HDC anticipates that as soon as contractors for these projects have finalised their resumption of operation protocols work should resume.
Delighted the construction industry has finally been given clearance to restart work, Mahabirsingh said it’s going to be a difficult road ahead for those involved in the sector based on a number of ongoing issues.
The eight weeks contractors were prohibited from working, Mahabirsingh said a lot happened.
Apart from losing income, Mahabirsingh said some contractors were saddled with additional costs.
Heavy rainfall has led to several construction sites either being flooded out or collected water that had to be pumped out.
The elements also depreciated the value of some heavy machinery and equipment.
“One cost would have been security because sites with materials would have had to be secured and protected. Those costs with the resumption on July 5, most contractors would engage with their clients to discuss those direct costs they would have incurred. Some reasonable negotiations would take place in terms of compensating or mitigating against those direct costs.”
Mahbirsingh said the sector employs over 50,000 workers and has approximately 3,000 small, medium and large contractors.
TTCA has a membership of 83.
Yesterday, Mahabirsingh said contractors were busily engaged in zoom meetings with their managers, teams and employees to resume work.
With work behind schedule, Mahabirsingh said, many projects would have to be accelerated which would require contractors to call out additional manpower or extend work hours to meet deadlines.
“With two months being off the sites, there is a lot of catching up and recovery work to be done. It will be challenging for some of them taking into consideration the rains will slow down work.”
Regarding millions of dollars owed to contractors, Mahabirsingh said, this was one issue TTCA has raised with the Government.
“We have communicated with the relevant arms in state enterprise. We understand that there is some level of payments that are being made to facilitate the restart of construction.”
Mahabirsingh could not quantify the payments made so far.
“It’s is difficult to say. Firms would indicate when they do not get pay. They hardly indicate when they get pay.”
Even though the unavailability of foreign exchange for contractors has been a nagging issue, Mahabirsingh said, this matter was also discussed with the Government.
“The industry is aware of the situation.”
He said some contractors have resorted to using local materials and manpower to cut back on the demands on foreign exchange.
On the heels of this issue another surfaced, Mahabirsingh said, contractors had to deal with an uptick in international shipping costs on construction materials.
“International shipping costs kinda trumps the foreign exchange.”
Mahabirsingh said importing such materials from Europe, China and North American has been extremely difficult in the last few weeks.
“On a 40-foot container, the price moved from US$2,500 to the vicinity of US$10,000 which really increases the price of whatever materials being imported in those containers. Two of the big-ticket items which we saw a significant increase in are lumber and steel….and they are still increasing on a weekly basis.”
Mahabirsingh said such costs were outside of the country’s controls but would have a rippling effect on consumers.
“We are a small player in a big industry. We need to keep our eyes on that situation.”
Mahabirsingh pleaded with contractors to be innovative and to think outside of the box, stating that the road ahead will be difficult to navigate.
Baliram John, group marketing manager of Bhagwansingh Group of Companies, said he had no doubt that the closure of the sector has resulted in businesses losing millions of dollars.
“It had a serious impact on us, “John admitted, stating that they did not retrench any of its 500 staff members during the second lockdown.
All Bhagwansingh and Dansteel’s locations were closed during the restrictions but recently opened three days a week when the measures were recently relaxed.
As the country’s leading hardware, John said 80 per cent of Bhagwansingh and Dansteel sales go towards construction.
During the measures, John said, the company had to find money to pay for imports.
Obtaining foreign exchange, he said, was their number one headache.
“We have a team of people who liaise with the banks on a daily basis.”
He said the company has been experiencing a shortage of foreign exchange for years.
“It has hampered business. It is difficult. Sometimes we have to purchase Euros and use that to pay for US dollars….so you find that you lose ten per cent when you buy the Euros.”
John said while they have been exporting some materials “the quantum is minuscule in terms of what our requirements are. A shipment of steel that they use in construction could require US$10 million. It’s a huge investment. It is difficult to get the quantum you need.”
On a positive note, John said the company has sufficient inventory to supply contractors and customers for a while.
Works and Transport Minister Rohan Sinanan said last week his ministry got permission from the Health Ministry to resume construction on key projects.
“Starting a project in a pandemic is not just telling the contractors they can go out and work. The contractors have to evaluate the job sites. They have to submit to us the health protocols. All of that was done last week so we expect from Monday those contractors will be ready to hit the ground running.”
He said the National Infrastructure and Development Company will dispatch letters to the remaining contractors informing them they can restart work providing that all health guidelines are adhered to on job sites.
“The construction sector is what we are using to stimulate the economy,” Sinanan said.
Sinanan’s ministry is heading several developmental projects such as the $180 million Diego Martin Interchange, San Fernando to Point Fortin Highway, Cumuto Highway, Moruga Port and Tobago Airport, including bridges, drainage and road programmes.