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After reading the article which paraphrased Kendell Johnson\u2019s address, and the comments posted thereafter, one can say finally it seems some people understand what is going on.<\/p>\nAfter reading the article which paraphrased Kendell Johnson\u2019s address, and the comments posted thereafter, one can say finally it seems some people understand what is going on.<\/p>\n
The situation is not all that gloomy though.\u00a0\u00a0 The EU-funded projects generally allow better opportunity for growth, as there is a wide range of projects and relatively small contractors can tender and do get project work.\u00a0 A big part of the issue with EU-funded projects is that the tender documentation is generally arduous, one of the most arduous at present.<\/p>\n
Caribbean Development Bank (CDB) also has a simplified system under the Basic Needs Trust Fund Programme geared towards small consultants and contractors.\u00a0 So to be correct, there is a little bit of crumbs available.\u00a0 From experiences at DOWASCO I also recall that some of the CIDA funding allowed terms which provide equal participation with local contractors and Canadian contractors.<\/p>\n
But it is true that especially for CDB-funded large projects, to get growth in the local industry from these projects is like climbing a building on bare elevator cables.\u00a0\u00a0 It is virtually impossible.\u00a0 For a long time now, CDB is referred to in some quarters, and has ably earned the reputation, as the most colonial of all the funding agencies!\u00a0\u00a0 This may be shocking, but CDB has very little Caribbean in it except its name.<\/p>\n
That aside, given this re-fresher of knowledge what can be done?\u00a0 This is where governance should involve some strategic method to overcome these threats.\u00a0 What has been done and what can still be done?\u00a0 It is not a time to let our hands go limp – that sense of apathy that seems to emanate from the readers of the article.<\/p>\n
Preparation of our local construction sector<\/strong><\/p>\n Government strategy has to include support for the local sector if it has to meet these and other challenges, if its players have to move throughout the region.\u00a0 Leadership in governance, not politics, is often our issues.<\/p>\n a.\u00a0\u00a0 \u00a0Construction and Exports:<\/strong> While the European Union and other developed countries view their engineering and construction sectors with much export potential, in Dominica we see them as just another cottage industry.\u00a0 But every time a local company wins a tender that was open to foreign contractors, there is import substitution.\u00a0 Every time a local contractor is engaged as major sub-contractor on a large project contracted to a foreign entity, we retain money and skills that would otherwise been expatriated after the completion of the work.\u00a0\u00a0 Many countries provide export subsidies for their contractors and consulting firms.\u00a0 In fact, every time those larger donors prepare funding packages, it involves an export component, which is clearly tied to the financing instruments.\u00a0\u00a0\u00a0 The OECS Export Development Agency told me a few years ago that the sector was not seen as having export potential!\u00a0 When a local company undertakes work in another island and repatriates profits, what is that?<\/p>\n b.\u00a0\u00a0 \u00a0Fiscal Policy And Incentives:<\/strong> Even though the local construction sector has been one of the most productive sector for years, it does not secure the mammoth fiscal incentives that the tourism industry enjoys. The construction sector is the second highest contributor to GDP for many years now, being not too far from the first.\u00a0 Local players invest quite a lot of money back into the sector.\u00a0 The shameful thing is that none of it is considered investment in the strict sense of the Invest Dominica Authority style.\u00a0 If these same firms were to take their profits and invest into some business in St Lucia or\u00a0 in US stocks, what benefits would the county enjoy?\u00a0 In fact, we are taxed just as much, whether we take all profits as dividends or we re-invest all of it.\u00a0\u00a0 Any serious financial incentive package must recognize the value of reinvestment and therefore reduced corporate taxes on the portion of profits re-invested.<\/p>\n c.\u00a0\u00a0 \u00a0Packaging Works:<\/strong> This is often trumpeted as a cure-all-remedy for the woes of large contracts and large projects within the context of having small contractors participate.\u00a0 Whereas it is possible to split projects in any number of lots, it is not always wise as the packages have to make economic sense to the players that are being targeted.\u00a0 The aim should be to ensure that sizable local contractors participate while at the same time not necessarily rendering the project uninteresting to foreign contractors from the funding agents.\u00a0 It is understandable that the foreign firm coming into the country on a project basis would have more overheads, hence a project has to be large enough to be attractive.\u00a0 Usually, the developing local contractor wants to win one or two of the lots while the large foreign firm aims at taking all so as to spread its overhead.\u00a0\u00a0 That having said, the local public sector investment programme should consider a range of project packages to ensure that a range of contractors are serviced and developed to take their place at the higher levels.<\/p>\n d.\u00a0\u00a0 \u00a0Local Practice:<\/strong> DOWASCO has over the years been the public entity which has allowed the most growth by packaging.\u00a0 However, in recent times it has been too lax with enforcing or developing tender criteria which should have win deliver to it the most economical tender.\u00a0 Unfortunately, in recent times it has itself suffered for this short-coming by having many contractual, quality, delay and incomplete project issues.\u00a0\u00a0 Procurement and contract management has to go hand in hand in developing a good and robust growing construction sector, as one can have an abundance of the undesirable and unfit.<\/p>\n e.\u00a0\u00a0 \u00a0 Training and Technical Support:<\/strong> Large construction firms are owned by businessmen, who no more function as technical specialists.\u00a0 They hire specialist to manage the firm.\u00a0\u00a0 However, specialists have to be available to fit these roles, and in this slowly growing sector and economy, they are not readily available.\u00a0 Many of the local contractors do not have the technical skills to grow, and often even placing a proper tender is beyond them.\u00a0 There is a lack of able young engineers to develop a proper management team.\u00a0 It is true some of the available\u00a0 young engineers do not fit the bill owing to questionable higher education institutions that they attended!\u00a0 Of recent times there are a few short courses sponsored by the EU, but these are too limited and too short.\u00a0\u00a0\u00a0 The State College would have been of more value to the sector if it had continued along the lines of the technical college and expanded in more industry relevant courses.\u00a0 But short courses in preparation of tenders for EU, CDB and other funding agencies would help local contractors to grow in meeting these requirements.<\/p>\n f.\u00a0\u00a0 \u00a0Local Funding:<\/strong> But what better way to simulate growth than with a strategic method of packaging works that have local or unattached funding so that indigenous contractors can face the challenge and aspire to have the technical and financial houses in order to meet project requirements?\u00a0 That is where the packages can be made relevant towards the ideal of stimulating growth.\u00a0\u00a0 I even advocate allowing OECS contractors to compete for the larger works along with the government owned entities like PWG.\u00a0 Unfortunately that is where the trouble begins \u2013 our politicians of\u00a0 today want to have control of who gets which jobs.\u00a0 Construction is a large political tool and an even larger political funding resource.\u00a0\u00a0\u00a0 So there lies the dilemma \u2013 the party, personal gain, or the country? h.\u00a0\u00a0 \u00a0Public Sector Funding: <\/strong> As far as possible therefore, our governments should review its available sources of public sector funding to include the ability to allow local participation in construction work at various levels.\u00a0\u00a0 It is amazing how different levels of restrictions operate simultaneously.\u00a0 There is the EU grants in which all ACP states can participate; on the other extreme there is the Chinese grant funds that is like a package gift \u2013 no allowance for local participation except for a small percentage of local purchases and employment \u2013 usually under duress.\u00a0\u00a0\u00a0 But loan funds should be weight for economic advantage –\u00a0 a small rate of interest as is said to be the case of the Chinese funding, may not make up for the economic disadvantage of lost opportunity for real capital and economic growth in the Construction and other allied industries, employment and related social improvement.\u00a0\u00a0\u00a0 Where projects are not urgent or considered part of essential services, probably timing can be reviewed to explore other available sources of funds and thereby possible reap greater economic returns in the sector.\u00a0 When the Chinese ties its loans to mandatory Chinese-contractor-built export enhancement programme, we import Chinese skills that we pay for over many years.\u00a0 Then again, it all depends on who has priority in determining value and benefits \u2013 and to who.<\/p>\n In conclusion, I believe that we have gotten more real growth in the construction sector from EU and some other externally-funded projects than from our locally funded or administered project.\u00a0 There is a greater guarantee that if you fit the bill you will be engaged and grow.\u00a0\u00a0 But few of us are set to take advantage of the opportunities\u00a0 \u2026 and it is perceived that government policies are too politically blindfolded to lead us anywhere.<\/p>\n We need to be proactive in helping to take ourselves there.<\/p>\n","protected":false},"excerpt":{"rendered":"After reading the article which paraphrased Kendell Johnson\u2019s address, and the comments posted thereafter, one can say finally it seems some people understand what is going on. The situation is not all that gloomy though.\u00a0\u00a0 The EU-funded projects generally allow…","protected":false},"author":15,"featured_media":22019,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_cbd_carousel_blocks":"[]","footnotes":""},"categories":[13],"tags":[],"class_list":["post-22016","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary"],"acf":[],"yoast_head":"\n
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\ng.\u00a0\u00a0 \u00a0Contractor Partnering:<\/strong> One has to face the fact that we will never be able to undertake all the projects let out in Dominica.\u00a0 In fact, there are still many projects in the region that no regional contractor can qualify for.\u00a0 Therefore, it is the responsibility of the players in the local sector to, in spite of the odds, position themselves to enter into meaningful partnerships with larger regional and international players.\u00a0 Even local partnering has to be looked at as well.\u00a0\u00a0 However, one drawback of packaging is that it reduces the incentive to partner when each contractor hopes he will get a lot.<\/p>\n