Herbert George, Chairman, National Infrastructure Property Development Company (Nidco) has agreed with a new report showing contractors’ dissatisfaction with late payments but he said there are remedies for the situation.
George told the Guardian that although there may be delays at times, there are contractual remedies for the contractors so that in the event that payments are delayed, contractors are compensated for it.
“There are contractual remedies where the late payment interest accrues to the unpaid sums so that eventually it would cost the state much more. The absence of cash flow in any project is bad news. So if there is a contractor and he is not getting paid on time then that starves him for the cash flow that he needs to keep his work going.”
He added that in all Nidco’s contracts they do carry penalty clauses for late payments.
He admitted that Nidco has had its share of late payments but he described this as being a general part of the process of doing business.
“It is not a situation where $10 million is given to the project manager and placed in some sort of drawdown account so that as the job is done they can access it. It does not work like that. In special places when one gets a loan for a project that may happen.”
He described Nidco as a quasi Government agency responsible for most of the heavy infrastructural projects undertaken by the Government.
George said he agrees with the findings and the recommendations made in the document prepared by the Construction Management Institute of T&T (COMITT) which identified three major problems that have plagued the industry and these issues were delayed payments, working in high-risk areas and the lack of the implementation of the procurement legislation.
The report also spoke about the challenges faced by projects going on in high-risk areas and George agreed that it is another problem.
It not uncommon to have contractors spend “tidy” sums for the security aspects of their sites, he said.
“It is not uncommon to have contractors’ equipment vandalized. It is a real problem. The private contractors use a combination of private security and armed security. There have been contractors who say that they are not working in those areas because of the problems there.”
On the topic of the procurement legislation, George said once it comes fully into effect it should clear up talk about corruption.
“ There is a lot of talk about corruption, whether it exists or not. At least the legislation will help to kill some of that talk and will help to preserve the integrity of the process. There will be a common process used by all agencies seeking to procure services via contracts.”
He also spoke about the allegations that some contractors are favoured over smaller ones in getting contracts.
“That may be happening but the reasons that they attribute to it are not correct. When we go out to procure the services of contractors we do so via open tendering. We have not shortlisted anyone. The contractors who seem to get most of the jobs, they have just developed the art of tendering.”
Brian Manning, Minister in the Ministry of Finance in a brief statement said as stated in the budget presentation by the Minister of Finance, all outstanding arrears with the construction industry will be settled in due course and this is in an attempt to bring stability to the sector and create jobs and other opportunities.