Construction sector facing collapse; government promises to pay debt

The government of Trinidad and Tobago has promised to pay contractors before the end of the year to avert a crisis in the industry.

In a media release the ministry of finance said the money will come from loans which will be finalised by the end of August.

The ministry was responding to claims by contractors that their industry will collapse if the government doesn't pay them soon. They say the state owes them $7 billion.

Speaking at a news conference Monday president of the Trinidad and Tobago Contractors Association (TTCA) Mikey Joseph said between September 2008 and August 2010 the industry was been forced to cut about 39,000 jobs.

And he warned of an imminent collapse if the government doesn't pay outstanding bills soon. Joseph said ther would be more job losses unless the government moves quickly to provide at least $1.5 billion in payments on due to contractors.

"The solution is for the Minister of the Finance to dip into the Heritage and Stabilisation Fund (HSF) and save the industry,” he said.

Minister of Finance Winston Dookeran agreed that the government must address the concerns of the contractors but their suggestion is not an option. “Their concerns must be addressed but not through the Stabilisation Fund,” he told reporters in San Fernando.

Joseph told reporters the jobs of about 79,000 construction workers are in jeopardy because of the previous government's practice of handing projects worth billions of dollars to foreign companies in preference to local, well qualified contractors.

He explained that for the past three years the Manning government had not paid contractors.

“It is having a devastating effect on the industry. A lot of companies are now facing foreclosure,” he said noting that contractors' cash-flow has suffered. Joseph predicted that the industry could collapse in three months.

“We need to be paid now: we have suppliers, we have bills, we could be faced with lawsuits, even when we choose to let go of employees we have severance payments to pay.

"Please do not underestimate the gravity of the situation...We cannot wait. The industry operates on a monthly payment system,” Joseph said.

He said the largest components of the debt originated from non-payment by: Udecott, the National Insurance Property Development Company (NIPDEC) the Housing Development Corporation (HDC), the Educational Facilities Company Limited (EFCL), the Ministry of Education, the Ministry of Works and the Ministry of Local Government.