Local contractors are welcoming the decision by Prime Minister Keith Rowley to encourage private capital into the housing market to service a sector which forms the Housing Development Corporation (HDC) client base.
The initiative was announced by the Prime Minister in his address to the nation on Tuesday on the State of the Economy.
President of the Contractors Association Mikey Joseph told the GML Enterprise Desk that the Association had “hinted to the Prime Minister at our dinner earlier this year that the housing construction sector could be used to stimulate the industry.”
He said “in constructing homes we tend to use much of the national resources, local paints, local blocks, local materials that assist in keeping the industry alive and we also utilise local financing.”
Joseph said they had long complained about the carte blanche use of foreign contractors in particular the Chinese whom he said “leak the foreign exchange because they have to repatriate the money to their homeland.”
He said while it had been late in coming, he still believed that the local industry would benefit.
“It will make a difference instead of people having to go out of business, retool and re-establish.”
In making the announcement on Tuesday Rowley admitted that because of the current situation there may be “some slowdown in economic activity.”
He said the objective was to “stimulate economic growth by selecting what is available in the most innovative way.”
To this end, he said, the Government intended to “ramp up housing construction as a major driver of the economy, but there would be a comprehensive overhaul of the funding arrangements of the programme. There will be new initiatives which would encourage private capital to accelerate construction on private or state land for pre-arranged priced units which upon completion the state through the HDC will receive and direct these units quickly to mortgagees who will access and service facilities which will be readied at the T&T Mortgage Finance (TTMF) etc.”
The Prime Minister said the objective was to “quickly move private capital into the housing market to service a sector which forms the HDC client base without initial state cash outlay.”
Joseph said that is all well and good. But he believes that before the initiative can get off the ground “the banking act will need to be changed so that banks become a partner of the project, providing the finance.”
Joseph explained that in the past the government financed such projects through Fincor but he said “there must be a level playing field all local banks and financial institutions should be able to provide finance.”
He said that the contractors would design and build and “the bank would go through the process, hold the mortgage and transfer to the government who would pay once they are in a position to do so.”
As to the cost of the units, he said: “I am also one who does not subscribe to subsidised housing for those who can help themselves.”
Joseph said he told the Minister of Housing Marlene McDonald that there was “a need to provide facilitation in terms of a home guarantee, because a lot of middle class persons cannot access loans easily.” He said: “If there is a loan guarantee facility the TTMF can go around and finance the homes.”
But he had another concern—“building houses and roads is not enough.” He said the industry was bigger than that.
“Some of our guys doing civil works and roads, the government needs to have these people go out and work regionally and internationally to earn foreign exchange,” he said.
He said trade agreements should be looked at to “try and implement legislative changes to allow local contractors to go out and compete. It will not cut it if we just have buildings and road infrastructure. We need to go out.”
Another issue the Government needed to look at urgently, he said, was licensing of contractors.
He said it would be a waste of money if the houses were not built well.
He said: “As it is now, it is a free for all. Any Joe who could buy a backhoe is now a contractor. There is urgent need for standards in the industry.”
Once the banking issues and the legislation governing contractors are in place he believes that the stage would be set for a successful partnership.
He does not believe that getting things done the right way would delay the initiative announced by the Prime Minister.
“We have been calling for it for years and we believe the time is right to get it done now,” he said.
Another contractor Winston Riley agreed that the initiative was a good one, but he was of the view that “it is crucial to get the procurement legislation in place, which is absolutely important to ensure there is transparency.”
He said when in Opposition, Rowley had said the legislation was a priority and he had also proposed to meet with the Joint Consultative Council, civil society groups and the private sector, but that had not yet happened.