Local content can play a role in major projects

The announcement on Tuesday that a local company has been selected to construct, install and commission a gas platform in the Gulf of Paria by a multinational corporation is a timely reminder of the role local content can play in key projects.

As the State continues to come to grips with the need to collect more diverse revenue streams and to diversify the economy, focus should not be lost on stimulating economic activity by giving TT companies a bigger slice of the pie.

DeNovo Energy, which is listed as Proman's upstream operating company, has awarded a contract to United Engineering Services Ltd to build the Zandolie gas platform. The company has a history of this kind of engagement. It boasts the first offshore gas development to be completed using a local jack up rig – Iguana in Block 1(a) off the west coast of Trinidad.

The latest venture is an example of one of the many ways businesses can exercise a degree of corporate responsibility by giving back to the areas within which they operate by making a conscious effort to include local content. Such practices are, in fact, not unusual in the private sector.

However, the public sector is still troubled to some extent by the difficulties involved in fulfilling the requirement of using local content.

Though many multilateral government projects involve the use of contracts that stipulate a certain degree of local involvement, it is not clear whether there is a coherent policy with regard to the use of such contract terms across various projects whenever they arise.

Indeed, the problem that has plagued many large-scale state projects has been the lack of transparency that has rendered contractual arrangements secret and made it harder to gauge the effectiveness of the State’s approach to these types of issues.

Not only is this limited to contract terms and conditions, but the very nature of the procurement process is sometimes such that it is not clear how firms are selected pursuant to the terms of government-to-government arrangements.

Such arrangements have long been integral to the development of our infrastructure and to projects that are key to our economic prospects. With the covid19 pandemic throwing global economies into disarray, it may well be that such arrangements might become fewer and farther between.

Equally, it is also true that the need for deeper international collaboration on economic matters could also foster even more bi-lateral arrangements and projects. If so, the State must have clear goals in mind, influenced by its roadmap to recovery, when it comes to how best to allow investment financing to trickle down.

Ultimately, boosting the use of local content across the board depends heavily on a resilient and dynamic commercial sector that is ready and able to take up opportunities as they come. This requires an environment that fosters growth in business and allows the transfer of skills from larger multinational corporations to local entities.

There should be as much local content as possible in large-scale projects and the Government should be mindful of the need to set an example.