The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian contractors will likely “lose out” on major Grand Bahama investment projects due to difficulties in obtaining competitive performance bonds and an absence of certification standards, an attorney said yesterday.

Carey Leonard warned that the proposed $300 million Freeport Container Port expansion, and possible Carnival cruise port, were both likely to engage foreign contractors and construction personnel as the leads.

Pointing out that foreign contractors had built resorts such as the Grand Lucayan and former Wyndham (Crystal Palace) on Cable Beach, Mr Leonard told a Bahamas Institute of Chartered Accountants (BICA) seminar: “The old days of Bahamian construction companies getting big contracts are over.

“Yes, Bahamian companies did bid on the Our Lucaya project, but there was a problem. Today we deal with large multinational corporations, like Hutchison Whampoa. These corporations’ procedures require that the construction company put up a completion bond. This is to make sure that, one way or another, the contract will be completed in a timely fashion.

“I am told that the insurance industry and the banks in the Bahamas do not have a competitive ‘bond product’. The cost of a bond and the security required by our banks and insurance companies puts such a product out of reach of even the best and largest Bahamian-owned construction companies. That means that any large contracts will go to foreign contractors.”

Mr Leonard arrgued that the same applied to Bahamian sub-contractors, given that performance bond contracts frequently required that all persons were fully qualified.

“Under the International Building Code there is provision for the licensing and certification of persons in the construction field down to a person who hangs a door,” he added.

“For whatever reason, the Bahamas and the GBPA (Grand Bahama Port Authority) have not seen fit to adopt the ‘high wind’ version of the International Building Code; the standards of which are equal to or higher than our own Bahamian and GBPA Code.

“So work permits will be granted to those foreigners with the necessary certification under the International Building Code to come in and do the work.”

The long-awaited Contractors Bill is designed to tackle this situation, as it provides a self-regulating system of licensing and certification based on contractor competencies, and the size of project they can perform.

Mr Leonard, meanwhile, held up PharmaChem as “the model of the type of industry that we need to encourage to be economically successful”.

Pointing out that its $120 million expansion was announced before the GBPA’s deal with the Government, Mr Leonard argued that it “probably provides more high paying jobs to Bahamian professionals than any other company on Grand Bahama”.