Home' Trinidad and Tobago Guardian : November 19th 2015 Contents As a leading indicator, construction may signal
growth. Alternatively, it may flag potential
adversity which, if proactively addressed, can
mitigate future hardship; both in terms of
severity and duration.
Construction is the nerve centre of our economy. It is an
industry in which I participated as a former chairman of two
leading block manufacturers in the clay and concrete segment.
I also chaired two regional coatings companies and I served on
the board of financial services companies, operating locally and
regionally. Like you, I have worked in recessionary times and in
buoyant times. I will draw on these experiences to proffer some
thoughts and recommendations.
At the outset, please allow me to congratulate all contractors
who have offered their projects for consideration for the prestigious
Contractor of the Year Awards tonight. Recognition by one s
peers is the most difficult achievement but it is also the most
May I also recognise the newest inductee into "The TTCA
Hall of Fame." This is a former permanent secretary, whose work
has shaped the San Fernando Technical Institute, Mount Hope
Medical Services Complex and our country s very important
relationship with regional and multilateral agencies.
Frederick Smith, CEO of Fedex, declared: "Leaders in any
field get out in front and stay there by raising the standard by
which they judge themselves and by which they are judged."
Justin Paul, you have raised the standard. Congratulations on
your well-deserved induction.
The theme---"People, The Blue Print of Our Success"---is both
relevant and prophetic.
Indeed, your energetic president in a recent interview on
October 21, 2015, describes the current state of the industry as
"Construction has been steadily declining. Overall construction
has been declining over the last two to three years because the
economy had been in decline and, until that changes, you won t
see much happening." To change the trajectory, people, philosophy
and policy will need to change.
The simple truth is that the country has experienced two suc-
cessive quarters of negative growth, 2015 Q1 and Q2, negative
1.2 per cent and 1.5 per cent GDP respectively. First half of the
year, contraction is estimated at negative two per cent GDP.
Every US$5 decline in oil prices reduces our country s revenue
by US$1 billion. Recent gas prices fell below US$2 Henry Hub
for the first time in a decade in November 2015.
The projected Henry Hub natural gas price may average US$2.81
per mmbtu for 2015 and US$3.05 per mmbtu for 2016. In the
short term, the International Energy Agency suggests natural
gas demand will benefit from plunging prices with the long-
term outlook for gas becoming more uncertain especially in Asia.
In short, volatility, tepid global growth, China and the emerging
market slowdown, very moderate Eurozone recovery will demand
a realignment of local fiscal and monetary policies.
Continued US growth and S&P s 2016 growth forecasts of 1.8
per cent for T&T are reassuring positive indicators.
Many of the themes at the global economic level and across
the energy industry are resonating at the country and industry
level. We, in the construction sector are not immune.
The Ministry of Finance s 2015 "Review of the Economy"
confirms a deceleration in the non-energy sector of 1 per cent
and reduced borrowing by the construction sector of 8.6 per
cent. It also shows a moderation in lending to the finance,
insurance and real estate sectors by 8.4 per cent.
However, $7.6 billion of bank liquidity, robust cement sales
to Q3, fiscal space and the need for significant infrastructural
upgrade nationally create significant upside potential. The country
has a window of opportunity to create a very different future,
which if seized maturely and collaboratively can create a trajectory
of sustainable growth and development for our country.
It will require courage, thoughtfulness, shared sacrifice and
a new mode of engagement by all stakeholders. It will also require
drastic policy reform. This evening, I will proffer some recom-
mendations using your theme. The views expressed are those
of the author and are not that of any other organisation to which
I belong or lead.
People, A Blue Print:
Governance and architecture
Our sector is vulnerable to systemic economic risk which is
frequently amplified by weak, self-serving boards whose objectives
are influenced by personal gain and political patronage. In this
construct, bona fide firms, with generations of business history
languish for extended periods if they support or are perceived
to support the wrong party.
Cash flows dry up as new jobs are not awarded, and receivables
are not paid. Projects are unceremoniously and inexplicably
halted. Contracts are awarded to new players with no industry
pedigree on the back of "hastily constructed international affil-
iation." Not surprisingly, these partnerships are short-lived.
Project delivery times and contractual requirements are not
met. The country suffers. Banks report loan losses and impair-
ments. Suppliers and sub-contractors are out of pocket. Overseas
suppliers look at T&T with anxiety. Workers lose their jobs. It
is a lose-lose model, which is repeated ritually with every election
and which requires an overhaul. Even worse, governments, on
the eve of elections, frequently sign and/or turn the sod on ill-
advised projects. There is an avalanche of local projects that
exemplify this at industry level.
They create chaos, volatility, impaired confidence, systemic
risks and economic hardship. In an era of growing fiscal deficits
and successive GDP declines, overhaul of the governance and
architectural model is an imperative.
In my view, there are two significant pieces of legislation
which lie at the heart of the governance and architectural frame-
work, which, if addressed, can be game changers.
1. Integrity in Public Life Act,
2. The Public Procurement and Disposal of Public Property
Act No 1 of 2015.
The Integrity in Public Life Act
Numerous learned commentators have called for its urgent
review and overhaul.
More commissioners and chairmen---whether over the mode
of their appointment and/or decisions made by them---have
fallen victim to the Integrity Act than have been individuals
caught for wrong doing. The public has little, if any confidence,
in the institution and/or the legislation. Despite numerous alle-
gations of corruption---from Clico to Life Sport, EFCL to Ude-
cott---no government/official or perpetrator has been brought
Last week, several newspapers reported the president s ongoing
difficulty in identifying suitable candidates to lead/serve on com-
missions and state agencies.
A similar difficulty occurs with appointments to state boards
including: HDC, Udecott, EFCL and ADB; all of which have
considerable influence over the construction sector. "It has been
a difficult process" declared the president. Today the pervading
response to public service is "no thanks".
The above represents a lethal cocktail of weak, outdated but
well intentioned legislation, aggravated by unethical, unprincipled
and frequently unqualified talent leading boards of state enterprises
which have adversely affected the construction sector.
I make the call for the president to appoint a bi-partisan com-
mittee drawn from the public, private sector, civil society and
labour to review the Integrity Legislation to make the appropriate
recommendations for its modernisation and overhaul in the
interest of our country. This will be a first, but critical step in
the restoration of Integrity in Public Life allowing captains of
industry to come forward and contribute fearlessly ad fully in
the country s interest.
The Public Procurement and
Disposal of Property Act No 1 of 2015
This was assented to in January of 2015. The legislation, while
not perfect, can improve governance, accountability and oversight
over public procurement. Government must move with dispatch
to appoint a highly qualified and respected regulator/chairman
pursuant to the act. It is my understanding that the previously
proposed chairman has resigned. No active or former politician
should be appointed to this position. It requires a commercially
minded, highly qualified and, respected individual who is prin-
cipled, operating in the national interest.
It is also important that the enabling regulations, under section
63 of the act be developed and submitted to Parliament for affir-
mative resolution at the earliest juncture. It is also imperative
that funding be identified to support this office.
May I strongly suggest that a specific line item be appropriated
for same in annual budgets to ensure ongoing independence
and efficiency of the office of the regulator. The savings in pro-
curement, timely project delivery, confidence, and growth of the
Sector will repay these costs many times over.
A new Public Procurement and Disposal of Public Property
Bill 2015 has been recently tabled. It strengthens the procedure
BUSINESS GUARDIAN www.guardian.co.tt NOVEMBER 19 • 2015
Create a very
On Saturday, the chairman of state-owned National Gas Company,
GERRY BROOKS delivered the feature address at the annual awards
and gala banquet of the T&T Contractors' Association. He spoke on
the themes of Governance and Architecture, NGC as a catalyst for the
construction sector and daring to change the model.
Continued on Page 9
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