The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading contractor has seen a 50 per cent year-over-year increase in inquiries from potential construction clients, although he believes the industry’s prospects will not improve until the New Year.

Richard Wilson, Cavalier Construction’s managing director, told Tribune Business that the relatively small amount of new building contracts coming to market meant the industry was “really competitive”, with multiple contractors competing for the same jobs.

The Bahamian construction industry has struggled to recover from the effects of the 2008-2009 recession, but Mr Wilson said the increase in contacts from potential customers was a positive sign, though it had yet to translate into real business.

“I would say we’ve had at least 50 per cent more inquiries than we had a year ago,” he told Tribune Business. “They’re not major contracts, but they’re enough to keep the wolf away from the door.

“All of a sudden we’re finding we’re getting more inquiries, but how that translates into business is anybody’s guess and I can’t see anything improving until the New Year.....

“I’m just hoping that Mr Christie comes through on his promises, and that in the next two years we have a lot more work to do.”

The construction industry, along with real estate, is a key barometer of the Bahamian economy’s health. It is especially vital in providing employment for semi-skilled and unskilled Bahamian men, and is thus a key element in battling both crime and joblessness among the young.

Mr Wilson said that apart from Cavalier’s own 45 employees, the benefits from a thriving construction industry would also flow through to the Bahamian sub-contractors and building materials suppliers used by the firm.

The overall sector, though, was “not in a good situation right now”. “It’s really competitive,” Mr Wilson told Tribune Business. “Contractors are trying to survive. If you’ve got four to five main contractors, they go after the same jobs to keep in business.”

Steven D’Alewyn, Cavalier’s chief financial officer, said the company had been joined by the Mosko Group of Companies and CGT Construction in having a presence at the recent luncheon attended by Haitian president, Michel Martelly.

“People do not ordinarily think about heading down to Haiti looking for work,” Mr D’Alewyn told Tribune Business. “All the big boys are looking for work.”

He added that Value-Added Tax’s (VAT) implementation on January 1, 2015, represented a potential impediment to construction industry recovery because it would increase costs for both commercial and residential clients.

Mr D’Alewyn said it was impossible to predict how much construction costs would rise until the Government’s plans for import tariff reductions became clearer, but added that a 1-2 per cent rise in contract prices was likely at 7.5 per cent VAT.

“It obviously will mean an added cost to people building here, and they will have an eye on it [VAT costs] to see what it is,” he added. “There inevitably will be an increased cost, but what it is I’m not entirely sure.”

Meanwhile, both Mr Wilson and Mr D’Alewyn said passage of the much-anticipated Contractors Bill into law was “way past due”.

Arguing that it would provide “essential” protection for the consumer, they pointed out that construction was the only professional industry in the Bahamas where self-regulation had not been legislated.

“We think it’s absolutely essential,” Mr Wilson told Tribune Business of the Contractors Bill. “It’s past due, way past due. It should have been done before Baha Mar. I just don’t think the Government has the appetite, the political appetite, to do it.”

The Contractors Bill has been promised by both FNM and PLP administrations. The last stated reason for its delay were issues relating to final amendments, and the ‘grandfathering’ in of electrical contractors from the existing legislation that regulates them.

Without the Bill’s consumer protection and licensing mechanisms, which would certify contractors according to the type of jobs they were able to perform, Messrs Wilson and D’Alewyn said the Bahamian public were effectively at the mercy of unscrupulous operators.

Mr D’Alewyn said the consequences of no legislation were “the unleashing of unqualified contractors on the public with no recourse.

“Anyone can open as a contractors, and that cannot be good for the average person needing the service,” he said. “What the Contractors Bill will provide is a forum for complaints, and the referral of people. That is going to weed out underperforming people in the industry.

“It’s essential for the consumer. It gives the consumer a much greater degree of control, as they know they have a licensed contractor, and if something goes wrong they have an avenue to pursue their complaint. At the moment, anyone can say: ‘I’m a contractor’.”

Mr D’Alewyn said the Contractors Bill might also “make inroads into the fronting that goes on”, where Bahamians front for foreign builders.

Mr Wilson, too, highlighted the lack of transparency with government contracts as another factor stunting the sector’s growth.