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Contractor Chief Warns On Fee Rises

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

BUILDING permit fee increases could adversely impact the level of construction activity, going forward the head of the Bahamian Contractors Association (BCA) warned yesterday, arguing that the sector was not able to bear any additional costs at this time

Come July 1, the Government intends to increase building permit fees and introduce new fees, but Godfrey Forbes said the Bahamian construction sector was only just beginning to rebound and that he did not endorse any additional burdens on the consumer.

“We are just beginning to see a little bit of activity in the bull pen, so to speak,” Mr Forbes said. 

“There is major development at Baha Mar, one or two other medium-sized projects around, and private residential homes, but I don’t believe that the industry is at a point where it would be able to bear any additional cost that will cause the average consumer to say they can go ahead and absorb that.

“I would not encourage the Government to make any additional burdens on the average consumer right now when it comes to dealing with anything as it relates to construction, because it would definitely have an impact on the kind of activity we would end up seeing going forward.

“We’re not fully out the recession yet. There’s not very much money being lent to the average consumer for construction, and the industry as a whole is still not as active. Anything that will make it bit more difficult will just further hinder the overall growth of the industry. I would say: ‘Let the industry rebound before adding any additional fees’.”    

The BCA president said the construction industry, like many others, was concerned over the impact of the Value Added Tax (VAT) the Government plans to implement.

“The VAT is going to have a very significant impact on the construction industry. We see all of these new fees being proposed and adjusted as being tied together with that issue. We are very concerned because we don’t have a full understanding as to how it will impact us as businessmen in the construction industry at this time,” Mr Forbes added.

Prime Minister Perry Christie  announced during his 2013-2014 Budget communication that the Government has allocated $10 million to the capital budget of the Ministry of Works and Urban Development for urban renewal/small home repairs.

“This programme will benefit small contractors and provide jobs targeting our young males. It will support much needed improvement in the sub-standard housing conditions which many of the poor among us endure,” said Mr Christie.

Mr Forbes said this was welcome news for the industry, which largely consists of smaller contractors. “Anytime the Government invests in housing, a significant amount of capital  is earmarked for that venture,” he added.

“It is unfortunate that it is not an ongoing exercise the Government will deal with. If they earmark $10 million for this venture that will take another year to be spent, and come 2015 there may not be any funds reserved to go into a similar project. The industry will certainly get a shot in the arm for that particular time, but when it is dried up we find the reality for smaller contractors will get to a point where they are out looking for repair work.” 

The Prime Minister added yesterday that the Government remains committed to the housing programme. “The grave economic situation that we inherited has delayed our ability to proceed as expeditiously as we would have liked, but we are now in a position to move forward with the construction of new homes,” said Mr Christie.

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