The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunmedia.net

Bahamian contractors are “greatly disadvantaged” by the absence of lien laws, which they believe would force developer clients to negotiate settlements to outstanding payment disputes.

Veteran contractors, Larry Treco and Peter Whitehead, delivered this message at Friday’s conference hosted by the Bahamas’ branch of The Chartered Institute of Arbitrators (CIArb) to mark its parent association’s centenary.

Mr Whitehead, a 43-year construction industry professional and president of Osprey Development, said Bahamian companies - and not just those in the construction sector - are routinely forced to write-off huge debts because they are unable to collect payment despite work being done to customer satisfaction.

“We have no lien laws in the Bahamas where we can actually have some leverage in settling outstanding matters,” said Mr Whitehead. His company’s joint venture with Yates is among Baha Mar’s largest unsecured creditors, being owed some $5.5 million.

Mr Treco, president of CGT Construction, added: “There are no lien laws and it puts us at great disadvantage.

“Liens would provide protection to a contractor when a client refuses to pay, and would force the owner or the client to negotiate some kind of settlement or face foreclosure on the property.”

He added: “Once the owner has the occupancy certificate, the bargaining tool is gone. Without lien laws, contractors have no protection and the owner is in a good bargaining position.”

Mr Whitehead said Bahamian contractors also found it difficult to obtain performance bonds, which clients demanded as a security against failing to perform on large contracts.

“In the Bahamas the banks are not very familiar with this, and are not sure how to deal with them. They are very expensive, 1-1.5 per cent of the total value,” Mr Whitehead said.

“Our industry has not been able to ensure, in most cases, that a payment bond is issued. I think it is very important to have payment bonds. Many owners think that asking for a payment bond is an insult.

“Baha Mar is a prime example of how that works. Had we had a payment bond in place there would be no problems, and we would not be in the mess that we are in. We contractors who worked for Baha Mar have not been paid, and had we had a payment bond it would have helped a lot.”

Mr Treco added: “Most of the large construction companies in New Providence have been affected by this particular project, and if this isn’t resolved shortly, it’s going to have a very serious impact.”