Trinidad construction industry seeks answers on China firm’s housing deal

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Trinidad construction industry seeks answers on China firm’s housing deal
HDC chairman Newman George
HDC chairman Newman George

(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.

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