The Tribune

By NEIL HARTNELL Tribune Business Editor WAGES paid to skilled Bahamian tradesmen by the main New Providence Road Improvement Project contractor were around 50 per cent below market norms, the Bahamian Contractors Association's (BCA) president said yesterday, suggesting work may have progressed more smoothly had Bahamian contractors been hired to do the job. Godfrey Forbes, speaking after both the Government and Public Accounts Committee (PAC) had their say on the problems that have bedevilled a project now set to cost the Bahamas $206 million in borrowed capital, described the wages paid by Jose Cartellones Civiles (JCCC) as "totally unacceptable". Backing the PAC's findings that the main Argentinean contractor used "poorly trained staff in order to avoid paying standard labour rates", the BCA president said the $4.50 per hour wage rate for unskilled labour, and $6.50 for masons, was "really, really low". He told Tribune Business that the hourly wage rate norm for masons in the Bahamian construction industry was between $12-$14, meaning that JCCC's wages were around 46-54 per cent below market norms. When it came to unskilled labourers, Mr Forbes indicated that JCCC was more in line with the Bahamian market, its $4.50 rate being 75-90 per cent of the market's standard $5-$6 per hour. Semi-skilled labourers, the BCA president added, were normally paid between $7-$8 per hour, a rate that was almost as much as the $8.50 per hour that JCCC paid its operators. Describing JCCC's wage rates as "significantly below" Bahamian construction industry norms, Mr Forbes told Tribune Business: "For instance, you're talking about masons. A good mason would be earning somewhere between $12-$14 per hour. "You find with unskilled labour they are somewhere in the vicinity of $5-$6 per hour. That is basically their base wage that most contractors go ahead and pay an unskilled person. Semi-skilled is between $7-$8 per hour, somewhere in that vicinity." Commenting on JCCC's wage rates, as disclosed by the PAC report, Mr Forbes added: "That is really, really low. When you look at what is being done, the kind of rates, you have to be realistic. With the rates they are paying those men, if that is what they truly are, you are not going to find well-experienced, quality tradesmen to accept those kind of rates..... Working 40 hours a week for those kind of monies is totally unacceptable." The BCA president's comments thus back the PAC's findings, namely that by hiring lower quality workers to avoid paying Bahamian construction industry rates, JCCC may have "compromised" the Road Project's quality and contributed to delays in its completion. Referring to a report to the Road Project's Disputes Board on October 23, 2010, the PAC report said: "The Ministry of Works and Transport was concerned that JCCC was not using sufficient numbers of skilled operatives, but was constantly training up an inexperienced workforce, and this took time and compromised quality. "Also, having gained experience, the operatives would leave JCCC and seek better paid employment elsewhere. The Ministry of Works and Transport stressed that market rates for experienced operatives needed to be paid to attract and retain the right quality of operatives." Mr Forbes yesterday said the market for Bahamian construction labour, and pay rates, were heavily influenced by what their US counterparts were paid. He recalled how problems frequently resulted when major foreign developers came into the Bahamas, as they often attracted away the best Bahamian workers by paying higher rates, stripping local firms of their best talents. "To go from that standard, and to drop that much lower, I think you're asking for problems," Mr Forbes told Tribune Business, "and it might be one reason why the work has been delayed so much, and the morale of the men is low, because they're not being paid much." JCCC's $4.50 per hour for unskilled workers is still above the minimum wage of $160 per week, as it would give such an employee $180 in take home pay. And Mr Forbes acknowledged that the depressed economy, coupled with high unemployment - especially in the construction sector - enabled JCCC to take advantage of a labour oversupply. While confirming that JCCC never consulted the BCA on appropriate wage rates for its Road Project workers, Mr Forbes said the Government could certainly have informed the company of market norms. "The Government is quite aware of what the rates are for workers in the country, because every time they present a project out to bid, the contractor is required, in most cases, to send break out rates for the labourers, mechanics and semi-skilled," the BCA president said. "That is something the Government is quite aware of." JCCC had directly employed some 420 Bahamians on the project, and the PAC report said the contractor "had difficulty in identifying local contracting rates for workers". Meanwhile, while agreeing that the Road Project may have proceeded more smoothly had it been parcelled up to Bahamian contractors, Mr Forbes questioned whether the $113 million contract originally handed to JCCC - now set to hit $154 million - had accurately priced the job or seriously undervalued it. Had the required funding been available to the contractor, it might have been able to hire more skilled labour and sub-contractors, resulting in better efficiency and value for money. "It has to do with the value of the contract to the contractor, because had the value of the contract been greater, they may probably have the money to attract skilled contractors to do the work," Mr Forbes explained. "It all comes down to dollars and cents. Can I afford to hire you? It makes a big difference." He added that the Government could not solely be blamed for this, especially as it may have been constrained by Inter-American Development Bank (IDB) rules in the initial bidding process. The BCA president, though, agreed that there was "no question" the Road Project should have been parcelled out to Bahamian contractors, who knew the territory and were familiar with managing Bahamian labour. "I always believe in trying to push for Bahamian contractors, simply because the monies borrowed from international lending institutions have to be paid back," Mr Forbes said. "It's in the best interests of our economy and nation to maximise the amount of monies staying in the country. They [Bahamian contractors] would have some monies to reinvest in this country. This is where we live. "If it goes to a foreign contractor, they will try to maximise profits, and that profit will go out of the country. I still believe that to go ahead and push for Bahamian contractors to do the work in this country, that is the bottom line."