In a May editorial we pointed to all the planned government and private sector projects planned over the next few years.
On the government side alone, there is the Government Office Accommodation Project, three new high schools, a new primary school, an emergency response centre in Bodden Town, a new operations centre for Hazard Management, a major renovation of the airport and a proposed cruise berthing facility. And those are just the larger projects.
On the private sector side, we have continuing development at the Camana Bay and Ritz-Carlton, Grand Cayman sites; proposed luxury developments in Beach Bay and East End; new major condominium developments along Seven Mile Beach and in Cayman Kai; and several new office buildings.
With only a handful of companies able to construct such large commercial projects, we asked the obvious question in our May editorial: Who would build all of those projects.
That question has been partially answered since then as we learned that Tom Jones International, which had only previously delved into condominium construction here, was awarded the contract for two of the three new high schools. Now we have also learned that Dart Realty will create its own construction company, primarily to take on some of the construction at Camana Bay, but also to bid on other government and private sector projects.
Although some of the established general contractors will complain about new companies coming into the small Cayman market, the current work demand supports more companies. Without more general contractors, government and developers would likely face significant project delays, as has been the case with several major buildings over the past couple of years.
Of course, Cayman’s commercial building boom will not continue forever. Eventually, government will have to stop building so much because it will reach its borrowing limits. And eventually, the amount of retail and office space available will reach its saturation point, particularly when the GOAP opens and government departments vacate thousands of square feet of office space to move into their new home.
When the commercial building boom slows, there will likely be too many general contractors left to survive. At that point, business survival will be for the fittest.
Some people will complain about that because it might mean the closing of long-established firms. But just as it is when there are too many restaurants or too many clothing stores, only the strongest – those that offer the best products and services at justifiable prices and those with the best management – will survive.
What seemed like a rather small group of contractors is going to face the exigencies of stiff competition, and that is a good thing for the Cayman Islands.