Leading Cayman Islands contractors blasted the government’s handling of cruise port negotiations with China Harbour Engineering Company, airing concerns about the company’s health standards and ability to dominate the local construction industry. They questioned why the Chinese government-controlled company is being talked to in the first place, and what safeguards the Cayman government has in mind to protect the Islands’ economy.
“We’ve all decided that this is a tiny project for a company the size of China Harbour. Our project is something that we can manage locally. Most of us are out of work. We need this work to survive,” said Kris Bergstrom, vice president of the Cayman Contractors Association. “The biggest question is why are we going outside of ourselves to court a company like China Harbour, who have now not only stated that they’re looking at the port but quote-unquote billions of dollars in other construction projects in Grand Cayman?”
He said, “Our real concerns are, A. How did they get invited to the table? B. Why are they here – why are they coming here? And C. How are we going to deal with this downstream? Are they going to be here and we’re all going to be Chinese in a couple of years? It’s a real concern for us and our livelihood going forward.”
George Town MLA Ellio Solomon, who said he has recently been named the lead legislator concerning the China Harbour deal, pointed to his track record in using local contractors for relatively small-scale public housing projects, saying he would similarly strive to spend money locally as much as possible in the context of the large-scale cruise ship berthing facility.
“I say, ‘fit for the little, fit for the much,’ and hopefully that will assure you that if we’ve done the same thing for affordable homes, which is a small contract, that the government has the same intentions when it comes to something as large as the port project,” Mr. Solomon said. “As the new councillor I will do exactly what I did with affordable housing.”
The interaction between Mr. Solomon and contractors occurred after a Chamber of Commerce ‘Be Informed’ presentation on representatives’ fact-finding trip to view China Harbour’s projects in Jamaica.
Contractors Association President Rayal Bodden said the information session was a helpful forum for dialogue.
“I think it went very well. I think everything was addressed in the meeting succinctly by everyone in various areas,” he said.
Health and safety concerns
After viewing photographs of China Harbour construction sites taken by the delegation, Island Builders Managing Director Dean Scott said, “The plant equipment looks to be kind of obsolete, and just looking from the pictures, while the quality of the finished product looks very good, the health and safety appears to be very weak.”
New Chamber President David Kirkaldy said some of the differences in methods China Harbour used in Jamaica, and those used in Cayman, may be due to general differences in how construction is done in Jamaica. He said on the Jamaica job sites there was “an awful lot of emphasis put on health and safety from a high-level point”, but “There seemed to be a disconnect between the stated objectives of health and safety and what was happening in some aspects”.
“I made the comment that at Camana Bay during construction, that just to go and have a walk over to one area or another you had to stop at health and safety to put on a hard hat and hard-toe shoes if you didn’t have them on. None of that happened [in Jamaica]. Most of the employees that I saw, particularly the Chinese employees, were in, I mean to be honest with you, flip-flops,” Mr. Kirkaldy said. “They’re working on the ground with nothing above them, but they all had hard hats on, I will say that.”
Mr. Kirkaldy said, for some of the projects in more remote areas of Jamaica, workers were living in so-called ‘work camps’ – which had to meet standards approved by the Jamaican government – but in other areas workers were living in available rented accommodations. He said about one-third of the construction workers were Chinese nationals, typically in higher-skilled positions, with the remaining two-thirds apparently Jamaican.
Potential for domination
Contractors attending Thursday’s presentation said they would not be able to maintain their current wages and standards for workers and still hope to compete with a Chinese company able to employ low-paid workers living in work camp conditions and with access to cheap construction materials shipped from China.
Architect Burns Conolly said China Harbour’s allure, both to Cayman and other countries strapped for cash, is China Harbour’s access to extremely-low-interest financing via the Export-Import Bank of China.
“It’s really coming down to money here. The question is that the Cayman government doesn’t have money to build this. We have to get money from somewhere,” he said. “We’ve been involved in the last six months in two major national projects overseas, one in Guyana and one in Trinidad. In both cases we lost the project because the Chinese came in with money, cheap money.”
He said, “The Cayman government doesn’t have any money, doesn’t have any ability to borrow money, so we’re not actually in the driving seat on any of these projects where we’re requiring funds to come in. The Chinese at the moment have the most funds at the cheapest rate.”
Martyn Bould is Rider Levett Bucknall’s project director for the Baha Mar project in Nassau, which is being financed by the Export-Import Bank of China and constructed by China State Construction Engineering Corp.
Mr. Bould said Thursday, “The problem you have, certainly on the Baha Mar project, is the contractor is also a shareholder in the Baha Mar project, so he also receives the same information the owner has, and he also knows all the information the banker has. So it is relative to having an open dialogue, in that regard it poses a problem.”
Local, outside money
Businessman and former political candidate Bo Miller suggested attempting to raise funds for the cruise pier locally before moving forward with China Harbour or anyone else.
“The Cayman Islands in the last 40 years have had one of the most incredible economic experiences in human history, and quite frankly for us to find ourselves in this position today is a disgrace, that we have wasted so much of our resources and mismanaged our affairs to the point that we are about to become hostages to certain entities. We have over 200 banks in this country. We have according to the statistics billions of dollars passing through this place in hedge funds and all the other stuff. And we have expertise in this community from all walks of life,” he said.
“Look for investors here before we move forward another step with this group or another group because the Cayman I see in 20 years, if you’re not involved with or working for the Darts, the Chinese or the Indians, you’re screwed. And that’s not a future I want for my children,” Mr. Miller said. “If we can’t raise $100 million or $200 million in this town with the amount of resources and wealth that we have created and have passed through Cayman, they need to turn the lights out on this place because we’re pissing it away.”
Mr. Solomon said the government’s financial position is such that it must go to an outside source to get this project done. “That’s just a reality,” he said.
He said when the government originally sent out a request for bids, it received about a dozen proposals.
“In terms of the bids coming, I don’t honestly recall seeing one from a local company,” he said. “Well, yeah, DECCO and Dart, but I didn’t see that as a local company, and I think that’s unfortunate.”
Audience members protested that their companies had submitted bids, including McAlpine and Royal Construction Ltd. At various points, Atlantic Star, DECCO, and Royal Construction-GLF had been in negotiations with the government over who will build the cruise berthing facility in George Town.
Mr. Solomon said his first official meeting on the China Harbour negotiations would take place Monday, and he promised after that to meet with the Contractors Association and make himself available for media briefings.
In addition to the cruise facility, government and China Harbour also are negotiating on improvements to the Spotts facility and building a cruise pier near the Turtle Farm.