The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Grand Bahama contractor yesterday branded Gold Rock’s imminent exit as “good riddance” amid industry expectations that rivals will fill the concrete manufacturing void it creates “within three to six months”.

Patrick McDonald, principal of Patrick McDonald Construction Company, told Tribune Business that the company’s five-year monopoly over aggregate fill extracted from the Devonshire subdivision did not benefit the wider construction industry or consumers as he accused it of raising prices “sky high” following Hurricane Dorian.

Describing himself as a licensed contractor of 20 years’ standing, who built Freeport’s fire and police station, he told this newspaper in a statement: “I speak for many if not most in the construction sector on the island when I say good riddance to Gold Rock and the Del Zotto family...

“Gold Rock has promised to give local contractors discounts on the purchase of aggregate, only to go back on their word. It raised prices suddenly, during difficult economic times. In general, the company has shown a lack of regard for the community of Grand Bahama.”

Referring to the Devonshire aggregate contract, which Gold Rock and its owners, the Florida-headquartered Del Zottos have cited as the spark that has triggered their pull-out, Mr McDonald added: “Gold Rock had a monopoly on materials within the designated area, effectively stopping anyone from mining there, even though they failed to actually mine the quota agreed on. Apparently the attitude is if Gold Rock can’t mine it, no one will.

“I believe that their decision to leave Grand Bahama and abandon their workforce, while difficult on those families affected, could result in the long run in a brighter future for the construction sector with more fair-minded investors and local companies allowed to take part in mining and the sale of aggregate.”

Gold Rock’s announcement that it is closing down not only its concrete manufacturing business, but hardware and furniture and accessories stores, the Do It Center and Home Design Center, was yesterday said by Michael Pintard, the Opposition’s leader, to have put some 130 total jobs in jeopardy.

The spark that triggered the conflict appears to have been Gold Rock’s negotiations with the Grand Bahama Development Company (DevCO) over access to aggregate/fill in the latter’s Devonshire subdivision for its ready mix, block and pre-cast concrete products. DevCO, though, has argued that Gold Rock’s continued monopoly over this source cannot be justified because it had under-performed the previous contract by not taking the stipulated tonnage.

Unable to make headway over the terms they want, Gold Rock and the Del Zottos branded the GBPA as “the leaders of the most grossly underperforming island in The Bahamas” as they unveiled the shuttering of not just their concrete-making business but also their Grand Bahama-based hardware store and furniture and home centre.

The GBPA, though, said DevCO wanted to “right size” the deal such that Gold Rock would still have access to the same level of aggregate it previously mined, and be able to sustain its operations, but give up its exclusivity to let other Bahamian contractors have access to the same fill and thus create a “more equitable” arrangement for all industry players.

Arguing that the Home Design Center and Do It Center closures are “unnecessary”, because they are not impacted by the aggregate talks, the GBPA said: “This move, seemingly motivated by nothing but spite, will cost yet more hardworking families their livelihoods and further shrink the options available to consumers in a struggling economy.”

Mr McDonald, in response to the Del Zottos’ attack on the GBPA, said: “It is easy to throw insults and accusations over your shoulder while you are running out the door.” In a subsequent interview with Tribune Business, he explained: “My thing with them is that they’ve been here and controlled the monopoly of that aggregate for quite some time.

“After Dorian, Freeport Aggregate, which was also a provider of concrete, was devastated.” This, Mr McDonald argued, gave Gold Rock an effective monopoly on concrete supply in Freeport and “prices went sky high for no reason” in Dorian’s aftermath, with ready mix increasing from $180 per cubic yard to $236 per cubic yard.

“They have not been good corporate citizens,” he asserted, adding that he was still waiting to receive the 10 percent discount promised to him by Gold Rock on future purchases in return for giving it the exclusive contract to supply concrete blocks and other products for his multi-million dollar police fire station. “Good bye and good riddance.”

Admitting that he has crossed swords with Gold Rock and the Del Zottos in the past, and has a defamation claim that remains live against the company before the Supreme Court, Mr McDonald said he was now worried whether their exit means he will have no assets to claim against should he prevail.

Now working on AML Foods’ new $3.5m Solomon’s store in downtown Freeport, the contractor said Bahamas Hot Mix will fill the ready mix concrete supply void left by Gold Rock. Block supply, though, may be more difficult. Mr McDonald said contractors would have to use substitutes, and he plans to initiate conversations with Nassau manufacturers to see if they can supply the Freeport market in the interim.

“The other way around it, there has to be a coming together of the Grand Bahama contractors. Why is that necessary? We are buying what every contractor uses. Would it not be a sound thing to put up a block plant ourselves, build the sector a new block plant to fill the void, be shareholders and buy from ourselves?” Mr McDonald asked.

Leonard Sands, the Bahamian Contractors Association’s (BCA) president, told Tribune Business he would be surprised if no major Bahamian contractor sought to immediately acquire the concrete block and manufacturing plant assets from Gold Rock given the demand that government infrastructure and private sector development projects create for its products.

“I would be surprised if one of the major contractors and current users of that product did not offer to buy out that business and take over that service, if not for themselves but also to offer it to the wider contractor community,” he said. “I would be surprised if major players in the market who use that product don’t get the financing in place and take over that plant. I’d be surprised if it didn’t happen in the next three to six months.”