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News Release from: Chartered Institute of Building [CIOB] | Subject: Trinidad growing construction boom
Edited by the Buildingtalk Editorial
Team on 08 March 2006
Trinidad growing construction boom
Trinidad and Tobago is experiencing a construction boom stimulated by growing revenues from the expanding oil and gas industry in the region.
Trinidad and Tobago in common with other island States in the Caribbean is experiencing a construction boom stimulated by growing revenues from the expanding oil and gas industry in the region Late in 2004, BP Trinidad and Tobago announced a major gas discovery 50 miles off the east coast of Trinidad, where it holds exploration and production licences covering more than 900,000 marine acres
This article was originally published on Buildingtalk on 12 Mar 2004 at 8.00am (UK)
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This most recent find confirmed the significant gas supply potential of a deep water basin where three major finds had already been reported by the BP Amoco exploration group.
BP now has a 70 per cent shareholding in Atlantic LNG which has recently completed a four-train LNG plant at Point Fortin on Trinidad's west coast.
Production there is now running in excess of nine million tonnes of liquid petroleum gas per year, much of which is being exported to the United States.
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The $7 billion construction cost of this plant makes it the company's largest single investment in the Caribbean.
Fortunately for Trinidad and Tobago's construction industry, BP has adopted a policy of sustainable development for the local economy, with contracting strategies designed to increase local capacity and to promote maximum value added in the local energy service sector.
It believes that as local businesses thrive, the need for start-up, growth and development financing will grow and that the mix of options available in the local capital market must grow beyond traditional bank financing.
This approach fits well with the policies of Prime Minister Patrick Manning and his government which wants Trinidad and Tobago to achieve developed country status by the year 2020.
In a recent interview he said that the government was paying great attention to the island's infrastructure, with the aim of bringing water supplies, electricity generation, telecommunications and public services generally up to international standards.
To achieve the vision of a world-class economy the government has formed the Urban Development Corporation of Trinidad and Tobago with a brief to transform the capital Port of Spain as the financial and business hub of the Caribbean.
The UDC last year awarded a $US265 million design and build contract to Bouygues Batiment International to undertake the Waterfront International Development, a 150,000 sq.
m.
property development comprising two tall blocks of offices and the first Hyatt Regency hotel in the Caribbean, set to open in late 2007.
Since that announcement was made, Bouygues has brought Trinidad and Tobago-based contractor Home Construction .
into the project in joint venture.
This company is connected with the HCL investment corporation based in Miami which has the property development resources required for association with such a large contract.
It appears that this is a negotiated arrangement with the Trinidad and Tobago Government.
The announcement by the Minister of Planning and Development, Camille Robinson-Regis, last August simply said that contracts had been signed for the management of a multi-million dollar international waterfront project taking place along Port of Spain's Wrightson Road.
Protests from local contractors.
The award of contracts worth around $TT3 billion in recent times to nine foreign building or design service companies has generated protests from the island's contractors' association.
They have had bad experiences in the past with foreign contractors who left the country or tried to leave it owing local firms tens of millions of TT dollars.
The association regards as a foreign contractor any company, even if registered in Trinidad and Tobago, whose ownership is held by foreign investors to the extent of more than 50 per cent, or whose personnel rendering service in the territory are at least 70 per cent non-local.
This would apply for instance to Carillion (Caribbean), HCL and the Chinese contractors who have taken a number of important building contracts within the past few months.
The following list of foreign construction companies currently working on projects in the islands was given by Mikey Joseph, president of the contractors' association in a statement following a meeting with Trinidad's Works Minister Colm Imbert.
Johnston International (Turks and Caicos), design and build for Chancery Lane complex at San Fernando (US$50 million approx); Bouygues Batiment International (France), through Bouygues Batiment TandT Construction Company-HCL joint venture, (US$265 million); Sunway Construction Caribbean (Malaysia), Government Campus for Ministry of Legal Affairs, Port-of-Spain (US$60 million approx); Johnston International, multi-storey car park and retail, Port-of-Spain (US$28 million approx.); Helmuth Obata and Kassabaum.
HOK, one of the world's largest architectural firms, based in the USA, design services for the Brian Lara Academy at Tarouba (US$500,000); Shanghai Construction Group, Social Development Towers, Port-of-Spain (US$60 million approx.); China Jiangsu, three housing contracts worth a total of $US12 million.
As reported in the Trinidad Guardian, in response to complaints about the amount of work awarded recently to foreign-based companies, the Works Minister pointed out that there are only about six construction companies in Trinidad and Tobago which can handle projects valued at between $TT100 million and $TT300 million.
Mr.Imbert said that his experience when seeking bids for government work was that local construction firms were packed out with work and their responses had not been encouraging.
Nevertheless, some of the larger locally-based firms hold contracts for important projects, such as NH International (Caribbean) recently awarded the final package to complete the Central Plaza for the Ministry of Education on the Government Campus on Richmond Street and currently working on the new Customs building in the capital.
The Minister also mentioned among his six big contractors Kee-Chanona, Home Construction, Beaver Construction, Hafeez Karamath Construction and Carillion (Caribbean).
Most if not all of these would be regarded as foreign contractors, but as the Minister said, firms of this calibre have access to financial, technical and manpower resources which enable them to assure the Government of to their capacity to handle the bigger jobs to the quality standards now being demanded.
Commenting on his recent experience in putting work out to local contracting firms, Mr.Imbert said they reached a point about three years ago when instead of getting the six or seven bids they expected, only two would be submitted and one of those would be qualified.
When the Government put out a tender to repave the runway at Piarco international airport, nine contractors collected the documents; one submitted a tender on time and one other was late.
"The former got the job", the Minister is reported as saying.
"The others looked at the job and declined to bid".
"The only conclusion you can draw is that they have far too much work".
The Government, he said, had little choice but to go foreign once it realised that local companies were overstretched.
"We cannot tell the country we are waiting for you to mobilise and equip yourself and get bigger." Responding to complaints from industry that there are two few engineers, surveyors and skilled craftsmen available to handle Trinidad's growing construction workload, the Cabinet sub- committee inquiring into the industry's problems of under-capacity is arranging for the TandT University to train more quantity surveyors this year.
Consultations are also being held with universities overseas over the training of other classes of technicians, for example in blasting techniques which would assist in alleviating the current short supply of aggregates on the island.
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