An important contributor to Trinidad and Tobago’s economy, the construction industry was estimated to account for 5.2% of GDP in 2014. There are 12 locally based companies with a turnover of TT$25m ($3.85m) or more, 200 firms with turnover in the TT$5m-25m ($771,00-3.85m) range and a larger number of smaller companies below that, many of them operating informally. The sector accounted for 15.6% of the labour force, according to T&T’s Central Statistical Office. The industry can be broken down into four main sub-sectors: building construction; civil infrastructure, such as roads, dams and drainage systems; the energy construction sector, linked to oil, gas, and power facilities; and quarrying, which includes the production of aggregates for road building and cement.

Good Growth

With the sector, including the quarrying sub-segment, growing by 7.1%, 2014 was a reasonably good year for the construction industry, with the overall economy growing by an estimated 1.5% (revised from the original 1.9%) and providing some moderate underlying support for building work demand, according to the government’s “Review of the Economy 2014”. Typically, construction activity is more volatile than the economy as a whole, with higher peaks and lower troughs in the business cycle. In line with this, construction sector growth in the past two years has been running ahead of GDP.

A key reason for this performance is the government cycle. “During and after a general election construction activity slows down, especially if there is a new party in power as they may take time to get their footing before new contracts are awarded. This could affect the industry for up to 12 months or even longer,” John Connon, the managing director of regional construction and design build company NH International (Caribbean), told OBG. “Low oil and gas prices may exacerbate the situation given the effect this will have on the economy and the government’s ability to spend on capital projects. It is unfortunate that such cyclical activity is common in the construction sector,” he added.

A similar concern was voiced by Thomas Chanona, CEO of local construction company Kee-Chanona, who told OBG, “Overbuilding can be an issue of concern for contractors. The previous government, for instance, had started an excessive amount of projects for the size of the island, leading to unsustainable cost inflationary pressures.” An important part of construction demand comes from the public sector. Contractors said 2010-12 was a slow period partly due to the fact that the incoming government cancelled a number of its predecessor’s projects and took some time to identify, fund and procure new ones. However, once a new policy was set, from 2013 onwards new tenders began to be announced and activity increased.

Cement Sales

One sign of a growing construction market in 2014 was that Trinidad Cement Limited (TCL) reported its sales increased by around 9% from TT$1.9bn ($292.98m) in 2013 to TT$2.1bn ($323.82m) in 2014. The firm, which is the main supplier of the local market but also exports to the Caribbean and Latin America, said this was primarily driven by growth in Trinidad and Jamaica, and it is well positioned to take advantage of growing demand in the CARICOM region. The improvement in sales came despite renewed debt servicing difficulties and management changes in 2014. Mexico’s Cemex is the largest shareholder in TCL, through Sierra Trader, with a 20% stake, which is set to rise to 35% after a February 2015 deal with the Mexican giant.

Oil Price Impact

Despite good signs on the growth front, the fall in oil prices in late 2014 and early 2015 caused a degree of concern among contractors, because of the unfolding impact on the economy and government spending in particular. The government of Prime Minister Kamla Persad-Bissessar had to recalculate the budget based on revised oil and gas prices. The prime minister said spending would be reviewed, with infrastructure projects for which funding had not yet been confirmed likely to be shelved or postponed.

Asked in early 2015 to describe morale in the construction sector, Mikey Joseph, president of the T&T’s Contractors Association (TTCA), described it as nervous but OK. He told OBG, “Companies in the civil infrastructure sector are OK, as elections are approaching and in an election year all governments like to pave roads and complete public works to show they are doing things.“ However, Joseph added that the situation was worse in the energy segment as “no new plants are being built and there is little maintenance work.” In regards to building construction, he said contractors had been expecting an improvement but feared it would not materialise due to the impact of the oil price slump.

Housing Sector

The housing sector forms a key part of building construction activity. Traditionally, the public sector has supplied roughly 50% of new residential house construction and around 30% of new mortgages. Mortgages are managed by the T&T Mortgage Finance Company, while construction is carried out by the Housing Development Corporation (HDC). Both of these institutions are state-owned and fall under the remit of the Ministry of Housing and Urban Development (MHUD). New demand for housing is comparatively low given that the annual population growth rate is 0.3% and ownership rates are already high – at around 77%, according to the Inter-American Development Bank.

However, Asgar Ali, special advisor at the MHUD, told OBG, “These raw statistics belie the manifest need for state-subsidised housing and shelter. The ministry currently has a database, which has grown over decades, of more than 160,000 housing applications, with the majority of applicants qualified to obtain mortgage financing.” He added that the solution which the government and the HDC have been pursuing is public-private partnerships in home construction.

One area where improvements are being sought relates to reducing bureaucracy and streamlining building permits. In 2013 Vasant Bharath, minister of trade, industry, investment and communications, said the process for acquiring construction permits would be reduced from 297 days to six weeks. However, progress has taken its time. In the World Bank’s “Doing Business 2015” report, T&T achieved a significant improvement in its the overall ranking, rising from 97th in 2011 to 79th in 2015. However, in terms of the dealing with construction permits category the country actually slipped back, from 77th in 2014 to 113th in 2015. Additionally, according to the World Bank, obtaining a building permit was still taking an average of 250 days.

Bank Credit

According to Joseph, access to credit is restricted by existing regulations, which limit bank investment in real estate. The way the rules are interpreted can prevent banks from lending for build-operate-lease-transfer projects. These credit restrictions, it is argued, give foreign contractors a competitive advantage. Contractors are also calling for a lien law. At present, if a client fails to pay for a building, it remains his or her property, and the contractor is left with no option but to initiate legal action to recover the debt. A lien law would allow the building to be sold faster and for the proceeds to be used directly to pay off the debt.

Foreign Contractors

One of the big issues for the local construction industry is the question of international competition. The TTCA has expressed concern over the number of large construction contracts won by international groups and, in particular, by Chinese companies. The local industry acknowledges that it may not be able to contend for some of the more sophisticated projects, but it also believes it is not always given the chance to compete on equal terms when it is viable to do so and that some foreign companies are unwilling to work with local suppliers.

Several companies in the sector have voiced concerns that the government gives an unfair advantage to Chinese firms, which will often fly in their own employees to live and work on-site. In an end-of-year speech at a TTCA banquet in December 2013, Christopher Garcia, then president of the contractors’ association, singled out French group Vinci Construction as an example of the “right way to involve foreign contractors in the industry”. He noted that the company had not secured work to build offices, a police station or a university campus, work “that our local contractors are completely capable of undertaking”, but had instead worked on the large Uriah Butler/Churchill Roosevelt intersection road project, and had achieved a 65% local content rate.

Two international companies, China Jiangsu Construction Corporation and Shanghai Construction Group, have between them secured more than TT$2bn ($308.4m) worth of public contracts, including the National Aquatics Centre, the National Cycling Centre, Couva Children’s Hospital, the University of the West Indies’ (UWI) South Campus and the University of T&T site at InTech in Wallerfield – designed to be the country’s first science and technology park.

While required by law to sub-contract electrical and plumbing to local contractors, Chinese companies generally offer lower local content and tend to bring in their own workers from China. Joseph maintained they also have access to Chinese government funding at interest rates of around 2%, giving them an advantage over local competitors. Companies active in the industry and concerned over the fairness of procurement policies and the need for local content regulations took part in discussions over a new procurement law, which received parliamentary approval in December 2014.


Another major issue is the absence of a building company registration and quality-control system, which would allow customers to contract firms they know meet certain minimum standards of technical competence, experience and safety. While the industry could self-regulate, the TTCA said that because much of its work is in the public sector, it wants the government to be involved and to support a registration system, for example, by agreeing that only registered firms can apply for state building contracts.

Civil Infrastructure

Public sector infrastructure work has also grown in importance. Some local companies told OBG that while 25 years ago it accounted for 20% of their portfolio, this has grown to 80%, a trend that is representative of the industry as a whole. Inadequate allocation of resources at the start of a project is a common problem that requires costly adjustments, as engineering planning capabilities are weak.

New Road

One of the biggest projects in Trinidad is the TT$7.5bn ($1.16bn) Solomon Hochoy Highway extension, which will link San Fernando to Point Fortin. The government has considered this 47-km project, described as the largest and most complex infrastructure development undertaken in the country, to be of strategic significance and of particular importance to the economic and social development of previously isolated communities in southern Trinidad. It will connect San Fernando in the south with the towns of Debe, Penal, Siparia, Fyzabad, La Brea and Point Fortin. The main contractor chosen by the government is the Brazilian company Construtora OAS, with the American firm AECOM acting as project manager.

There has been some controversy over the project. A local resident and former university professor, Wayne Kublasingh, campaigned for the government to divert a 14-km portion of the highway to avoid it cutting through several communities and part of the Oropouche Lagoon, on the grounds that it would cause disruption and environmental damage. The prime minister then established an independent committee to consider these concerns, and is now implementing most of the committee’s recommendations. The public has shown itself to be largely supportive of the highway project, with a recent survey showing as many as 57% of respondents believing the project should continue.

Tackling Hurdles

Rodrigo Ventura, the local OAS superintendent, told OBG that the project involved human resources and materials challenges. Of the 1690 employees working on the project, 93% were locally hired, and while skill levels were good, a scarcity of personnel for specific positions had required the firm to run a training school at the camp site in partnership with state agencies. “We realised that the large quantity of infrastructure projects ongoing in the country in parallel to our project has limited the availability of local workers, mainly specialised machine operators and heavy truck drivers. So as not to jeopardise the project, recruitment of expatriates has been necessary in some instances,” Ventura told OBG.

Regarding materials, the bottleneck has been the supply of aggregates at the quantity and quality required by the project. The unavailability of some materials, given the geological characteristics of the island, the production capacity of local quarries and the limited land transport resources – exacerbated by the scale of demand from other projects – has meant that they need to be imported from countries like Canada, St Lucia, Grenada, the Dominican Republic and Suriname through local ports, which also has limitations.

The cost of materials provided locally was rising at 15% per annum. “It is somewhat challenging for an international contractor to run a project that complies to the highest international standard, as required by the government, while sourcing a minimum of 40% local content. However, we have been successful, and have actually reached a higher percentage. The relationship with the government is positive overall and the project is now progressing rapidly,” Ventura said.

The future of a second-largest highway project, the San Fernando-to-Mayaro Highway, was also under discussion as a result of the need to reduce capital expenditure in 2015. Roger Hosein, an economist at UWI, told local media in January 2015 that as part of the programme to diversify the economy away from excessive reliance on hydrocarbons it would be desirable to complete the San Fernando to Point Fortin extension and “perhaps at some point” to start the Mayaro to San Fernando link. The San Fernando-Mayaro link is in part conceived of as a gas corridor to facilitate access by gas exploration and production businesses to offshore fields. In March 2015 Suruj Rambachan, minister of works and infrastructure, told local media that he expected work to begin before the general election. Still, others disagree and argue that it should be postponed due to the fact that while there were plans for deep-water drilling off the east and south-east coast of Trinidad, those areas were easily accessible by sea.

Energy Construction

As mentioned, the expected slowdown in the oil and gas sector means that a number of future projects with an important construction industry component are likely to be put on hold. One that awaits approval is a $400m mid-scale liquefied natural gas (LNG) plant proposed by Luxembourg-based Gasfin Development, in association with the state-owned National Gas Company (NGC). The project, known as Caribbean LNG, would involve building an initial 500,000-tonnes-per-annum liquefaction plant at Brighton Port, La Brea. In December 2014 Roland Fisher, CEO of Gasfin, told local press that the project was still awaiting final approval from the government.

There is also some expectation that state-owned Petrotrin’s plans for an ultra-low-sulphur diesel plant will get under way during the course of 2015. The project has been hampered by disagreements between Petrotrin and the lead contractor, Samsung Engineering. The proposal is part of Petrotrin’s Clean Fuels Upgrade Programme, conceived of as a way of improving the profitability of the Pointe-à-Pierre refinery in the face of tightening product specifications.

In addition, BP T&T awarded one of the more substantial construction and civil engineering contracts of 2014 to France’s Technip for the engineering, procurement, installation and construction of the Juniper gas facility, off the south-east coast. This project includes laying 10 km of rigid concrete-coated subsea pipelines.

Massy Wood Group, a consortium of Wood Group of Scotland and Massy Holdings of Trinidad, said in 2014 it had won a two-year construction services contract from Atlantic, the gas liquefaction operator at Point Fortin. Meanwhile, Acciona Agua, a consortium led by Spain’s Acciona, announced in November 2014 that it had won a $102m, three-year contract to build a wastewater treatment plant and sewage network in San Fernando. Work on the system, which includes 16 km of sewers and seven pumping stations, began in May 2015.


Many contractors expect 2015 to be a transition year. Public sector building and infrastructure works demand is likely to remain strong as the current government prioritises existing projects in an election year. At the same time, the important energy-related construction sector is expected to suffer from the downturn in oil and gas prices. Many contractors are concerned that there will be a pause in government work as new priorities are discussed and formulated.