July 19, 2013
The president of the Bahamian Contractors' Association (BCA) is "very much concerned" about the number of foreign contractors who are involved in the high-end real estate construction sector.
He has called on the government to take steps to limit the entrance of foreign companies, whom he claims have contributed to a weakening of the pool of skilled workers available to Bahamian contractors, and a leakage of resources out of the country that makes it harder for the sector to climb out of downturns.
Godfrey Forbes, president of the BCA and president of Dykton Mechanical, said that without measures to either lessen the participation of foreign contractors, or to ensure that they partner with Bahamian contractors, the economy will be "spinning its wheels" and failing to engage in economic activity that will lead to meaningful development.
His comments come as the construction sector continues to remain depressed, particularly with respect to smaller contractors.
In an interview with Guardian Business about the status of the sector, Forbes proposed that there should always be an effort by the government to ensure any foreign contractor entering The Bahamas partners with a Bahamian contractor.
"There is some improvement overall as far as the industry is concerned, but there is still not enough being done whereby Bahamian contractors are really being given the kind of opportunities necessary to experience the kind of return that they could in terms of investments being made in this country, because there are still have far too many foreign interests inside the construction industry."
In terms of bright spots for the construction sector, which experienced a major slow down following the economic downturn, Forbes said that ongoing work at Albany and government-proposed projects including work on the Carmichael Road Detention Centre, Ansbacher House, schools in the Family Islands, and 1,300 homes for low-income people that are slated to be built will be a "little bit of an injection going forward".
"It will probably be around another three to five months before we feel the effect of it," he said.
However, on a policy level, Forbes said that in general the government has been too focused on jobs in the short term than long term economic development when it comes to determining how to deal with foreign contractors.
"When a foreign investor comes in to the government and sits down and says, 'I am going to invest maybe a billion into your economy and that will represent x number of jobs for your people,' that's the only thing the government really looks at in terms of how is it going to truly impact the economy of The Bahamas - that is the biggest concern that they have.
"But as far as construction goes, we all know it's for a period of time, lasting on average between a year-and-a-half or two years. Once that project is completed, those people employed by foreign contractors are now put back on the street."
Forbes said that because of the "fickle" and short term nature of construction it is important that as much of the resources that flow from projects going on in The Bahamas flow to Bahamian contractors. When this occurs, rather than profits leaking out of the country, contractors can save and potentially obtain further financing to initiate self-funded construction projects when other jobs are not forthcoming.
Highlighting the South West Plaza development off the East West Highway as an example of a contractor-funded project, Forbes said: "What would have happened is that over a period of time the local contractors would've retained some profit from projects over the years, and at the end of the day would've found themselves in a favorable position to approach a lending institution and ask 'Can you finance this project for us?'. That financial institution would look more favorably on that local contractor and say, 'Yes, we can support you,' so even when funds are not flowing he now has the means to go ahead and retain his staff, to reinvest those funds back into economy of The Bahamas by developing things of that nature."
Forbes said that the passage of the Contractor's Bill, which would pave the way for the regulation of the Bahamian construction industry and the licensing of contractors to internationally-accepted standards, will help to cut down on the amount of construction work that goes to foreign contractors in The Bahamas.
The long-awaited bill has been in draft format for several months. Forbes said that at present there is some contention over whether electrical contractors will also "come under the umbrella" of the bill, or seek to "remain by themselves" in terms of their regulation. He said he hopes the issue is resolved within a few weeks, so that the bill can move ahead.
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