Overcoming Challenges in the Construction Sector

Victor Hart

Introduction

Construction projects, by nature, pose challenges at all stages of the project cycle, from design to construction. Unlike a factory-produced product that is exact, repetitive and quality assured because it is made in a controlled environment, each construction project is different due to the client’s brief, design choices, specifications, site and weather conditions and changes in the availability and quality of market resources. These variables result in a sector that is full of surprises and periodically experiences turbulence.

I understood this challenge from Day One and it always puzzled me that public and private sector clients did not. They expected then, and still do today, projects with a precision of design and construction, free from variations and defects, and they remain hung up on the notion of a ‘fixed’ price and completion within time and budget. The need to educate clients and the public was the first challenge I noticed when I joined the construction sector in the 1960s and it remains one of the challenges today.

Challenges of the1960s

I perceived the main challenge facing the sector in the 1960s to be the lack of understanding by clients and the general public about construction matters. Practitioners in the sector, dominated by foreigners, did not recognize the need for public education or, if they did, did not show any interest in responding to that need.

In 1966, when the Quantity Surveyors Society of Trinidad and Tobago (formed sometime before by expatriate QSs) was revived, I was able to get it to begin a public awareness drive with a weekly programme on Radio Trinidad entitled ‘Focus on Building’. In addition, we published regular articles in the newspapers under the byline ‘From your Quantity Surveyor’. That initiative continued for a couple of years and helped to educate the public on some sector matters and was the start of putting Quantity Surveying on the map in Trinidad and Tobago (T&T).

I dare-say that that idea might be worth re-considering today given the amount of misinformation being put into the public domain by detractors of the sector. Now, the sector is much better organized and has more resources available to it, therefore, it will be possible not only to use the print media and radio, as was done in the 1960s, but also to use TV to host programmes paid for by ads from member firms, hardware dealers, manufacturers and other players. The challenges of the1960s led the formation of the Trinidad and Tobago Contractors Association (TTCA) in 1968 by a few local visionaries.

Challenges of the 1970s

The challenges of the 1970s began with a construction boom that took everyone by surprise and the sector was under-prepared. In 1970, the Government embarked on a World Bank financed Secondary Schools Education Project. The World Bank insisted on international tendering and consultants and contractors scrambled to meet the challenge of entering overnight into joint venture arrangements to satisfy that requirement. Then came the Black Power Uprising and the mutiny in the Regiment at Tetron Bay. One of Prime Minister Eric Williams’ responses to create jobs was to launch a massive construction programme of houses, Factory Shells and more schools. Local contractors benefited from those medium-sized projects that did not require joint ventures and the sector flourished.

To meet the extra demand, there was an influx of foreign contractors, some of whom posed new challenges by offering clients project financing and turnkey contracts. The local contractors found themselves playing catch up to cope with this new challenge especially with commercial banks then being more willing to finance foreign contractors than locals. Consultants and contractors had to hire staff in large numbers from the region and the U.K. and, by the end of the 1970s, T&T had a booming construction sector, second to none in the Caribbean. The challenges gave rise to the formation in 1978 of the Joint Consultative Council for the Construction Industry (JCC).

A major challenge of the boom years was that, with the economy overheated, most projects were experiencing time and cost overruns. The management skills of our architects, engineers and contractors were found wanting and this gave rise to the advent of the independent Project Manager.

Challenges of the 1980s

The challenge of the 1980s was to adjust to the collapse or ‘bust’ that followed the boom of the 1970s. Dr. Williams died in 1981 and the new Prime Minister George Chambers faced a collapsing economy with the price of oil plummeting to US$9 per barrel. Company collapse followed the economy’s collapse and many of us found ourselves overstaffed with substantially reduced income. Times were tough and rough. The NAR government came into power in 1986, with the economy in deep recession and was forced to turn to the IMF for financial bailout. In this period, the construction sector faced serious survival challenges.

Challenges of the 1990s

The 1990s began with the Jamaat’s attempted coup that led to an earlier than expected return of a PNM government in 1991. Another ‘boom’ started around 1994 followed by the first UNC government in 1995. The boom continued well into the current decade and the challenge for the construction sector was once again to expand to meet the unplanned demands. However, the decade ended with the JCC and the TTCA, convinced that the government had created an uneven playing field to favour its party financiers, one of whom was a contractor and a member of TTCA, began campaigning for a Commission of Enquiry in the Piarco Airport Development Project. The Construction Sector and government were on a collision course and the fight got nasty.

Challenges of the 2000s

The 2000s began with the challenge of public sector procurement reform. The JCC and the TTCA adopted the position that getting a Commission of Enquiry to investigate the Piarco Project was not enough. Additionally, there was need for public sector procurement reform to prevent a recurrence of the suspected corruption. This campaign contributed in part to the fall of the UNC government in 2001 and the return of the PNM. The new Prime Minister Manning had promised the JCC, while in Opposition that he would set up an enquiry and pursue procurement reform and he kept his word.

TTCA had hoped that, under the new government, its calls for a better organized and regulated construction sector would be realized. For years TTCA had asked for registration of contractors, licensing of craftsmen, apprenticeship schemes, updated Building Codes and for the publication of the National Physical Development Plan but these calls had fallen on deaf ears. The new government also failed to deliver on these important demands.

TTCA had hoped that the country would return to the era of Development Plans, so allowing the sector to know what government, the largest investor in the sector, was planning for the next 5 to10 years and so be able to engage in manpower planning, re-tooling and plant acquisitions to meet the challenges ahead. But alas, that was not to be.

The economic boom continued until 2007/8 and the Construction Sector coped well initially. However, when the price of oil increased from US$35 to US$146 per barrel, money was no longer a problem and mega projects became the order of the day. As a result, the sector became overheated and all resources became scarce and expensive. Construction projects began running over budget and time. Government’s reaction was to set up more Special Purpose State Enterprises, such as the long established UDeCOTT, to meet the challenge and to import companies from France, Malaysia, China and Korea at the expense of locals. While so doing, government abandoned its public commitment to procurement reform because it said that the checks and balances proposed by the White Paper on public sector procurement reform would slow down project delivery. The JCC and TTCA rejected that argument and continued to press for the adoption of the White Paper reforms. Government saw that move as a threat and retaliated by taking steps that had the effect of emasculating the local construction sector thus posing an unprecedented challenge. ‘Design and Build’ became the government’s mantra because they knew that there was limited experience and know-how locally, thus justifying going foreign instead of local. The Prime Minister assured the country that these efforts were designed to reform and bring the sector into the 21^st Century, however, this reform was undertaken taken without any meaningful consultation with the sector stakeholders.

At the same time, the JCC and TTCA were calling for a Commission of Enquiry into the procurement practices of State Enterprises, and UDeCOTT in particular, that appeared to be falling far short of best practice.

They felt that there was more than a suspicion of corruption and mismanagement in the award and execution of construction contracts. After strong resistance by government, the enquiry was set up under Professor John Uff with JCC and TTCA playing a leading role in presenting evidence and cross-examining some of the leading players in the sector. Those actions did not endear JCC and TTCA to the government and its antagonism and hostility towards the sector grew even more. The current challenge facing the sector is a life and death struggle with government holding most of the cards. Fortunately, the now concluded Uff Enquiry, if its report is ever published, might yet vindicate the JCC and TTCA’s stance and cause government to reconsider its position on procurement reform and other related issues.

If the government does not change course in this confrontation, the sector will witness more importation of foreign contractors and designers. The sector will hear more derogatory statements by the Prime Minister and other Ministers about the poor quality of work by T&T designers and contractors, statements that are sending the wrong message to local investors and to Caricom where many T&T firms have offered services in recent years. If government succeeds in reducing work opportunities at home and in CARICOM for contractors and consultants, the future for the sector will be very bleak indeed.

The Next Challenge

If one of the current challenges facing the sector is ending the discrimination against local participation, the next challenge will be that of maintaining the facilities designed and constructed by the imported contractors.

Government appears oblivious to the fact that an essential part of the ‘value for money’ equation is the transfer of technology when taxpayers’ money is spent on public works. Government has not insisted on a contractual requirement for imported contractors to transfer technology to locals at the design, construction and craftsmen levels. There has been no attempt to insist on the use of materials and goods that are readily available on the local market or from traditional sources.

This means that the maintenance of the foreign built facilities will have to be done by the very imported contractors at great expense to the country for which succeeding generations will have to pay. One only has to look at the costly maintenance headache the country inherited at the Mt. Hope Medical Complex that was designed and built by the French with technology, materials and goods from France without any capacity building among locals. History is likely to repeat itself when the current imported contractors return to their homelands leaving behind a major maintenance challenge for the sector.

Conclusion

If the main challenge faced by the sector in the 1960s was the need for public education about the industry and its practitioners, in order to realize the bright future that then lay before us, the main challenge the sector faces today is what to do to ensure its survival.

We faced the sector’s challenges in the 1960s and 1970s with enthusiasm and great hope. In the same way that locals had taken over the political leadership of T&T, we locals were taking over the leadership of the professions and the contracting and manufacturing businesses and we saw the future as exciting. Unfortunately, the challenges in the sector today are being faced by most of you with a sense of hopelessness and despair. Very few of you, if any, will bet money on a favourable outcome. Not one of you can say with honesty that it is a joy to work in the construction sector today. What a sorry state this once proud sector has reached in T&T.

The sector is in this position today because it allowed itself to become too dependent on the State as its largest client and it became too trusting of the political directorate. Our political leaders, even as they paid lip service to becoming the economic and political leaders of Caricom and moving T&T to first world status by 2020, missed a golden opportunity to consolidate the gains made in T&T and in CARICOM by our construction professionals and contractors in the period 1970 to 2000. Instead, for reasons not fully articulated, our leaders have purposely taken steps to emasculate the sector and future generations will inherit its carcass. I pray that you may have the courage, the strength and the wisdom to find solutions to the existing challenges (and the new ones yet to be unleashed) and so reverse this downward slide that is now being experienced in the once proud construction sector of T&T.

The above article is an abridged version of Mr. Hart’s address to the Trinidad and Tobago Contractors Association at their “Contractor of the Year Gala Banquet and Awards 2009”

T&T’s Waterfront project builds profile

PORT OF SPAIN, Trinidad – Trinidad and Tobago has yet again appeared on international radar as Canadian construction giant GENIVAR copped the coveted 2009 Canadian Leonard Prize Award for their management of the Port of Spain International Waterfront Centre Project. The project, which fell under the portfolio of the Urban Development Corporation of Trinidad and Tobago (UDECOTT), concentrated  on the waterfront revitalization of Port of Spain with the goal of injecting life into the city and improving the urban quality of the environment.

The four year US$300M project which began in 2004 and concluded in 2008 won GENIVAR the best managed international project which was one of nine categories out of a jury evaluating forty three (43) international projects. Hosted by the Association of Consulting Engineers of Quebec, the awards ceremony, “Grands Prix du génie-conseil québécois”, was in its 7th year. It honours and celebratesthose who have demonstrated the highest standards in consulting and engineering expertise.