(TRINIDAD GUARDIAN) — The Joint Consultative Council (JCC) has filed a Freedom of Information Act (FOIA) requesting details of the State’s US $71 million deal with a Chinese-based housing construction company.
Newly-installed JCC head Fazir Khan said on Friday that the FOIA was necessary because no information has been provided to the construction industry about the decision to use the China Gezhouba Group International Engineering Co Ltd (CGGC) to construct 5,000 homes for State housing.
The FOIA, Khan said, went out on Friday and was directed to Housing Development Corporation (HDC) chairman Newman George.
Khan said the introduction of the Chinese firm comes at a time when the construction industry is already in “depressed mode.”
“Housing is core for the development of the construction industry. Growth of our trades, personnel, artisan and small businesses is rooted in the housing construction sector,” Khan said.
“More importantly, about 60 per cent of the traditional housing comprises local content.”
Khan said among the JCC’s concerns was that involving a foreign company in the local housing mix would lead to lost foreign exchange.
“Contracting foreign firms via design/build/finance with loan repayments made in foreign currency makes this project 100 per cent a forex expenditure,” he said.
“There is ample local capacity to finance, design and construct the proposed buildings and associated infrastructure, added to which, our local banks are flush with funds.”
However, without proper information on the State’s “framework agreement” with the CGGC, the JCC could not make any further pronouncements on the deal.
Khan said with the lack of information, there were currently more questions than answers.
“The project was not tendered. Could this be done under HDC’s tender rules? In addition, do any of the State-owned enterprises have rules that cover framework agreements? Is CGGC now a bonded contractor in the housing sector?” he said.
“The industry is not privy to information about the cost and terms of financing, quality of the final product (size of units, amount of civil works involved), etc. with respect to this project. Additionally, in the context of our declining foreign reserves and downgrading from international rating agencies, it begs the question is it practical to enter into such a framework agreement where payment is made in foreign currency?” he asked.
“The lack of transparency in agreements like these, as well as the lack of following any tendering procedures continues to plague our industry and has proven to be a great burden on the taxpayers/citizens of our country.”
Local contractors are currently owed hundreds of millions of dollars for work done under the former and current governments. But Khan couldn’t quantify that amount just yet.
“The JCC is still in the process of working at the level of the Prime Minister-appointed Cabinet Committee for the Construction Industry on behalf of those companies (contractors, consultants, architects, land surveyors and quantity surveyors),” he said.
But Khan said that partial payments were made to some of the contractors “and we continue the process to ensure full payment.”
“We pursue this process with the hope that the Government would continue to work with the JCC to urgently pay off its debt to the industry, much of which has been long-standing debts, bearing in mind that members of the industry continue to suffer from late payment on old and ongoing public sector contracts,” he said.
Khan called for a full proclamation of the procurement legislation through the adoption of regulations to better ensure transparency in the bidding processes for all state-funded projects.
“Draft regulations were submitted to the Minister of Finance in November 2018 by the Office of Procurement Regulations to give effect to the provisions of Section 63 of the Act. The Procurement Act requires regulations to be recommended to the Finance Minister, who has the right to review the said draft before he takes the same to Parliament,” Khan said.
“However, review of the draft regulations could have been expedited by the Minister of Finance by his taking the regulations to Parliament to be handled by a Joint Select Committee (JSC). This was not done and so we run the risk of a further delayed process, as these regulations require the affirmative resolution of Parliament.”
He added, “The JCC seeks clarification with respect to the date given by the Finance Minister for the further proclamation of important sections of the procurement legislation when Parliament is recessed to return in September, making this date impractical. The process is currently with the Finance Minister and the JCC is calling for urgency on the part of the Government to facilitate the full proclamation of the Public Procurement and Disposal of Public Property Act.”
In May, Prime Minister Dr Keith Rowley announced a deal with the CGGC to construct 5,000 homes for the State. The first phase is expected to cost just over US$71 million. At the time of the agreement, it was promised that local content including materials and labour are expected to be used for this project.