The Barbados Construction Industry 2012: Improving Quality and Streamlining Cost

“The success achieved through these initiatives has created a renewed confidence amongst investors and new commercial and residential improvement projects are starting all around the island again …”

By Martin DaSilva

February 20, 2012

New Administrative Building at the University of the West Indies, Cave Hill New Administrative Building at the University of the West Indies, Cave Hill

Barbados, despite being a relatively small island nation, is blessed with a mature and sophisticated construction sector, comprised of Contractors, Consultants and Suppliers capable of undertaking the entire spectrum of construction projects, from simple single family homes to complex commercial and industrial developments. The procurement processes and building techniques used are historically based upon the UK model with the Architect assuming the role of design team leader and priority given to the structural aspect of the project. However, in recent years, the introduction of Project Managers as the interface between client and design teams has been adopted successfully by many commercial clients. Typically, commercial projects will have a full design team complement including the Project Manager, Architect, Cost Consultant/Quantity Surveyor, Structural Engineer and Services Engineer.

The structure of the construction industry today is somewhat different in comparison to the years prior to the recession and existing market conditions in Barbados, in-line with the current global meltdown, have resulted in more favourable tender prices for clients, who only two years ago often struggled to solicit competitive bids.

The Barbados construction industry is divided into three major segments: Building Contractors who build residential, industrial, commercial, and other buildings; Civil Engineering Contractors who build roads, highways, bridges, tunnels and other projects related to infrastructure; and Specialty Trade Contractors who perform activities such as carpentry, painting, plumbing electrical work and so on. On most major projects construction is usually undertaken and coordinated by the general building contractor, who assumes full responsibility for the project, (save for specified portions of the work that may be coordinated by the client’s representative). Within the industry, general building contractors also employ more people when compared to other contractors. The added responsibility of maintaining regular employment to its staff also creates a necessity to source new projects.

With some projects placed on hold and others forced to reduce in scope, there had been a noticeable reduction in new projects throughout 2009 and into 2010, which in turn has caused a greater sense of concern and competition amongst contractors, consultants and suppliers alike. Three years ago, contractors had to review and expand traditional areas of specialty in order to maintain staff but by 2010 weakening results in the offshore real estate market forced a further review of methods to cap cost. Many local commercial builders initiated streamlining of cost through various different measures and increasingly better results have been noticed, from improved performance to higher standards, providing clients with better value and services. Better value and services on most commercial projects translate into real tangible value.

Additional services like value engineering and construction design recommendations support cost effective solutions and offer potential reductions in maintenance and operating expenses post-construction. In some cases these initiatives also result in shorter project schedules and aid in stronger end-user confidence. Historical information and productivity records have been utilized to determine targets and objectives for new projects where coordination of multiple trades and areas of specialized attention require specific focus. With an increased sense on improved performance, lead contractors have also engaged structured quality and productivity management standards and implemented cost management systems, all geared towards improving quality and streamlining project cost.

The success achieved through these initiatives has created a renewed confidence amongst investors and new commercial and residential improvement projects are starting all around the island again, benefiting from additional services, competitive building prices and faster projects. Although there have also been recent increases in raw material cost, indicators are that the industry has witnessed some stabilization and signs for improved growth are evident.

A review of the local industry in 2011 highlights Government’s continued support of the industry, geared mainly towards a general upgrade of social service building projects and major projects such as the Pierhead Marina Project. Various new office buildings and public school upgrade programmes are amongst the first to benefit. Private sector projects are returning within the Hotel and Tourism development sector and many new projects are being designed with strong focus on energy efficiency and green
construction methods.

The continuing success story of Barbados may be based on its ability to fend off competition in the Tourism and Service sectors and its commitment to developing non-traditional markets such as nature, medical and eco-tourism. Areas such as the Scotland District and North Point are ideally suited for this type of development, where hundreds of acres of prime land remain in brush and where commitment of Government is instrumental and critical to the success of developing these areas for future growth of our economy.

Martin DaSilva

Chief Executive Officer, Innotech Services Limited