By  May 21, 2017 stabroek news

The collapse of the Palmyra foundation structure intended to support an Indian Arrival Monument which was unveiled on Arrival Day was reported by the Stabroek News on April 27. Stabroek News had interviewed a Mr Marlon Cumberbatch, who said he was the supervisor of the construction company. He couldn’t say what caused the collapse but suggested that the project needed to be redesigned. Mr Cumberbatch stated that the construction company would be dissolved. Workers complained that they had not been paid and sources told Stabroek News that Mr Cumberbatch was indeed the contractor. The choice of contractor, the design of the project, the reason for the collapse, all remain state secrets.

While not much has been announced, it appears that the government has embarked on policies to make the small man into a real man by opening up opportunities in construction and other areas. There have been complaints for a long time that Guyanese contractors of African descent were being discriminated against. Bringing a contractor from Linden to undertake a contract in the Corentyne, suggests that the policy of redress, and a lop-sided one at that, is in full swing.

On principle, the policy to encourage small contractors to raise their game and develop is a good one. If the ethnic balance needs redressing, so be it, once it can be done without discriminating. But a haphazard policy with haphazard implementation will result in more Palmyras. And in a situation where the political and governmental system depends on ethnic mobilization, solidarity, and the maintenance of a perpetual sense of ethnic grievance, one does not know where the opening of another ethnic Pandora Box will lead.

A constructive policy for the construction industry, inclusive of the role and interests of small contractors, needs to be devised, then announced and support for it across the board sought. A flawed and unfair policy, devised in secret and implemented surreptitiously, without stakeholder input, will receive no support and result in poor choices of even the small contractors. At the moment, it does not appear that the government is overly anxious about any bad work from the small contractors who are being promoted. The theory goes that they will make mistakes because they are only now getting the chance. As they get more experience the quality of their work will improve. This molly-cuddling, to make the small man a real man, didn’t work up to 1992. It will not work now.

One medium sized contractor who has investments of substantial sums in machinery and equipment, much of which is now idle, and a large number of his skilled employees laid off, explained to me that his business needs a certain amount of work to keep it turning over and alive. He further explained that the government needs not only to encourage small contractors, but that it needs to sustain medium sized contractors and to encourage them to grow into large contractors. A balance has to be created that will benefit all contractors. The policy of dividing one contract into ten equal parts and giving one part each to ten contractors, one to the medium sized with millions of dollars in equipment and dozens of employees, and nine to small contractors with no equipment or a front end loader at maximum, that is, no overheads, will benefit no one.

When the PNC’s Hoyte government left office in 1992 the government was spending something in the vicinity of $3 billion a year in infrastructure. After the PPP government came into office, and with the additional flows of funds after debt forgiveness, Guyana was soon spending $20 billion a year on infrastructure. Government’s policy should then have been directed to the encouragement of a balanced construction industry. Instead the BK International conglomerate and two foreign companies, Seeraram Brothers and Dipcon, soon dominated construction. These two foreign companies, after taking billions out of Guyana, and precluding the growth of local companies, left in bad graces, particularly Seeraram Brothers. BK International was the only large contractor remaining which was capable of taking on the large jobs, such as sea defences. The absence of competition was keenly felt.

A huge increase in infrastructure spending is likely to occur as soon as the portion of oil revenues for infrastructure begin to flow into the budget. Unless the government applies a constructive policy that encourages large and medium local contracting companies to develop, while ensuring that small contractors obtain their share in smaller contracts and sub-contracting, foreign companies will return to dominate our infrastructure landscape. Once here they will once again stifle the possibility of local capacity to expand, as they have up to recently. It should be noted that it was only when Seeraram Brothers failed and Dipcon began to decline that medium sized construction companies began to come into their own in Guyana.

Failure to seize the time now to develop sensible policies for the construction industry, which protects and encourages both medium sized and small scale companies will result in foreign companies re-entering the construction industry and smothering the development of Guyana’s construction capacity. The small contractor will then remain small, no matter what the government does.