Former Prime Minister and Leader of the Opposition, Ralph Gonsalves, has issued a stark warning regarding Trinidadian contractors seeking to secure infrastructure projects in St. Vincent and the Grenadines. During a recent radio broadcast, Gonsalves strongly cautioned the current administration against accepting privately financed proposals that he argues will ultimately “choke” the country financially.
According to Gonsalves, several contractors from Trinidad, some of whom he claims have close ties to Trinidad’s United National Congress (UNC) party are aggressively seeking business in the country, including attempting to purchase government-owned land.
These contractors are reportedly approaching the government with offers to independently finance, design, and build multi-million dollar road projects. Under these proposed terms, the contractors would carry out $20 million to $40 million worth of work upfront, with the government expected to repay the debt after a five-year period.
While acknowledging that getting roads built quickly without upfront government spending might sound like a “sweet” deal, Gonsalves outlined four severe pitfalls to this approach:
- No Competitive Bidding: Because the contractors are financing the projects themselves, they bypass the traditional competitive bidding process, making it impossible for the government to guarantee it is getting the best value for its money.
- Lack of Quality Assurance: These deals typically bypass the use of independent consultants for monitoring. With only limited supervision from a government clerk of works, the projects are highly vulnerable to poor quality construction.
- Crippling Financial Terms: Gonsalves stressed that these short-term financing deals are far more expensive than traditional funding. They often carry interest rates of 4.5% to 5% over a brief five-year repayment window, which Gonsalves warned will “choke the government”. He contrasted this with highly favorable concessional loans available from the World Bank (0.75% over 40 years), the Caribbean Development Bank, or Taiwan (around 3.5%).
- Sidelining Local Contractors: Relying on foreign companies hurts local contractors who are committed to the country’s long-term development. Gonsalves noted that foreign entities often pack up and leave as soon as there is a lull in available work.
Furthermore, the Opposition Leader warned that these types of untendered, privately financed arrangements are highly susceptible to corruption.
Gonsalves also issued a direct caution to the Trinidadian contractors eyeing these agreements. Using a local idiom, he warned them that the situation is not as easy or lucrative as they might think, stating, “You think it’s sweet as the song say, what sweet in ah goat mouth, a fire in the bambam”. Ultimately, he urged the government to heed his advice and avoid falling into these detrimental financial traps.