Contractors await THA's 2022 outlook on construction

The future of the construction sector in Tobago will be dependent on if the Tobago House of Assembly (THA) keeps its promises, says a contractor from Buccoo, Tobago.

Assemblyman Trevor James is the new Secretary of Infrastructure, Quarries and Urban Development.

With the recent increase of cement prices by Trinidad Cement Ltd (TCL), of 15 per cent and eight per cent on Premium Plus and Eco-cement, respectively, and increased costs over time on other construction materials, he said there may be concerns with the continuation of projects, but most projects on the island were state funded.

The contractor, who wished to remain anonymous, said many of the contractors depended on the THA for work and continuation for most projects was under the purview of the central government and the THA, which were operating with budget deficits.

“The cost of material in Tobago is about 25-30 per cent more because of transport and different types of handling to get it here from Trinidad. We are hoping things will pick up in the new year but payment from the Government is a problem.

“Even if there is a fluctuation in prices there should not be a major shift in the continuation of projects. It should not bother the airport project. The shifts in continuation or closures would come from the projects that the THA is in control of based on contractors renegotiated costs.”

He said it was too early to determine the state of the construction sector in Tobago, despite the international price increases in steel, timber, electrical materials, PVC, and aggregate and a better evaluation could be made when the new THA secretaries settle in.

The impact and effect, he said, would be felt by people who were engaged in small projects and home renovations or home construction.

He also added that in light of Government’s announcement to revise the quota and import licensing regime for cement for 2022, it was not feasible for any business in Tobago to become a cement importer.

Government announced that the quota for imported cement would increase from 75,000 tonnes to 150,000, the common external tariff was suspended and there would be a decrease in duty from 50 to 20 per cent on other hydraulic cements for one year, starting in January.

He said the market was too volatile to engage in such a business venture because of the time limit placed on the measure and because of the consumption rates of cement in Tobago.

“Unless you own a hardware or a concrete plant and getting a fair amount of work, you could do that but the thing about it all depends on volume. Having someone do that to support the market in Tobago does not make sense.

“The incentive by the Government is for a year, which makes it difficult because cement has a shelf life, which means there has to be a turnover otherwise there is a loss. It is safer to purchase the cement from TCL even with the added costs that we incur.”

He predicted price increases in several sectors in Tobago, especially in areas of real estate, food, and labour costs, which was a direct results of the negative implications on the construction sector.

"Tobago is already expensive and this covid19 thing is not helping. There are no mechanisms in place to maintain cost factor levels.”

The sector was reopened May 3, after a two-month hiatus as a measure to curb the spread of covid19. Some ongoing projects included Comfort Inn & Suites in Scarborough, Bacolet Indoor Sporting Facility, Goodwood Sporting Pavilion, and renovation at Manta Lodge in Speyside. The proposed $500 million Marriot hotel project to be undertaken by Superior Hotels TT Ltd is scheduled for a 2023 start.

James, during the election campaign, outlined a grand Scarborough revitalisation plan which included reclaiming land from the sea. The ruling PDP also promised to make land accessible so Tobagonians could build homes.

At a PDP meeting in November, James said the party planned to give each electoral district $10 million annually to cover infrastructure works, construction of homework centres and daycares, among other things.