Contractor ‘terminated’ as Govt toughens up on monitoring of home construction

The content originally appeared on: INews Guyana
Housing and Water Minister Collin Croal

At least one contractor has had his services terminated as the Housing Ministry bolsters its monitoring efforts in light of growing complaints about the quality of work being produced by the contractors working on the Home Construction Programme.

During the Ministry’s closing press conference for 2023, on Wednesday, Housing Minister Collin Croal acknowledged that his ministry is facing challenges with contractors working on the Home Construction Programme; and he said the Ministry has had to go after two contractors after complaints were received.

In this programme, there are two categories of homeowners: those who go through the bank system, and those who pay cash. For those taking loans, the banks release the funds to the contractors only in tranches, based on the stages of work executed. Those paying cash sometimes pay over most, if not all, of the monies upfront to the contractors.

One of the contractors, retained to build one set of Young Professional homes at Prospect, East Bank Demerara, has since had his services terminated.

According to Croal, “We’ve had to send legal documents to that contractor, and I’m told that he also owes other persons. In [this] contractor’s case, there are about five beneficiaries for whom we are seeking to recover their money. Meaning, we have terminated the contractor, and secondly, we’re levying, to be able to recover the necessary money [paid by the beneficiaries].”

The other case that the Housing Minister cited involves a contractor who is also building Young Professional homes at La Bonne Intention (LBI), East Coast Demerara.

“That person would have received their first tranche from the bank, but they didn’t do the level of work that was required. So, that is being addressed,” Croal stated.

Meanwhile, in response to the complaints about delayed and shoddy works, as well as overcharging, the Housing Ministry has since boosted its monitoring capacity. According to the Minister, this type of intervention has necessary, especially at the Projects Department, where the workload continues to build.

“There is clerk of works that we have taken onboard, increased clerks of works to help with monitoring, because you would realise that, with the amount of projects that we’re doing etc in the Projects Department, we’ve had to increase the staffing… for monitoring which is required on the spot. So, they are now required to have weekly visits to the particular assigned areas they have, so we can rectify some of these issues [faced with contractors],” he explained.

However, even as the Housing Ministry tackles complaints against these contractors, Croal pointed out that some of them, on the other hand, are facing challenges of their own. He said contractors have complained that the cost of building these homes is too low.

Currently, the Housing Ministry has two categories of pre-built homes: the low-income houses, which are each a two-bedroom flat unit measuring 600 square feet and carrying a total cost of $5.5 million, inclusive of the cost for the land, which is $300,000.

And there is the most popular option – the Young Professional homes. Two types of houses comprise the Young Professional homes: single flat units with three bedrooms, including one-self contained, which are being sold at a total of $13.9 million plus the cost of the land – $1 million; and the two-storey, three-bedroom unit, which carries a total cost of $19.9 million, inclusive of the cost for the land – $1 million.

“The contractors have said that the cost for those houses at the respective levels is too minimal, too low. That’s a reality… Many of them also expressed challenges in terms of labour, which the whole country has in terms of labour shortage,” Croal has said.

Despite these issues, however, the Home Construction Programme continues to be a successful initiative.

Minister within the Housing Ministry, Susan Rodrigues, told reporters at Wednesday’s press conference that there are many persons who are opting for these pre-built homes, but the availability of contractors is an issue they are grappling with.

“We understood very early that, if we want to promote occupancy in areas, we should start by building homes. And that also gives us the opportunity to utilise economies of scale to make homeownership more affordable, especially for our low-income earners. So, that was the logic behind trying to construct as many houses as possible; and now we have a long list of people who are waiting for houses… So, we wish we can build more houses, but we’re also in a tight spot in terms of contractors who are available and willing to participate in our Housing Programme,” Rodrigues noted.

Meanwhile, during Wednesday’s press conference, Croal disclosed that under the Home Construction Programme, Government has invested over $8 billion to build some 1,165 houses in order to promote homeownership and fast track occupancy.

The low-income category has seen the highest number of completed houses to date, at 580 units; followed by moderate income with 370 units, and then the Young Professional houses at 89 units. The construction of these homes is part of Government’s housing drive to deliver 50,000 house lots in five years.

Already, the Ministry has issued some 30,468 lands across Guyana over the past three years. These include 28,368 residential lots through the ‘Dream Realised’ housing initiative; 659 commercial and industrialisation lots, as well as 1,445 for regularised lands.Most of these lands were issued to women and young persons (35 and under). Low, moderate, and middle-income earners accounted for 90 per cent of the total allocations.

Of these 30,000-plus allocations, 32 per cent, or 9,612 lots, were issued in 2023 alone. These include 8,578 residential lands; 181 commercial/industrial lands, and 860 regularised lands.