AMID persistent complaints about a shortage of skilled labour, allegations of tainted procurement processes, and chronic financing challenges, the Ministry of Economic Growth and Job Creation has moved to revise Jamaica’s decade-old construction policy.

On August 31 the ministry issued a notice seeking a consultant to lead this revision, with the procurement process — conducted through national competitive bidding — now officially closed. Interested parties were required to submit online both technical and financial proposals by the September 24 deadline.

The ministry has refrained from commenting on the details, informing the Jamaica Observer that the procurement process is still ongoing and that any premature disclosures could “adversely affect the proceedings”. However, Incorporated Masterbuilders Association of Jamaica (IMAJ), a key stakeholder in the industry, has been vocal about the changes it believes are critical for the sector’s growth.

At the top of IMAJ’s priority list is the review and monitoring of payment timelines for local contractors working on publicly funded projects. Contractors often face delayed payments from government agencies, which forces them to rely on receivables as collateral for future projects. This practice severely hampers their cash flow and operational capacity, leading to cost overruns and project delays. Reports from Planning Institute of Jamaica (PIOJ) have noted that these delays contribute to inefficiencies in the industry, further stressing the need for reforms.

Richard Mullings, president of IMAJ, is calling for tighter controls to ensure that contractors are paid on time, thereby reducing financial burdens and creating a more stable environment for local construction firms.

“Addressing this issue is crucial to improving the sector’s efficiency and competitiveness,” Mullings told Sunday Finance.

But payment timelines are just one concern. Mullings is also advocating the introduction of a licensing regime for contractors in Jamaica. Unlike architects and engineers, contractors currently do not face mandatory licensing requirements. Mullings argues that this lack of regulation lowers standards across the industry and allows unqualified contractors to manage large-scale public projects. He believes a formal licensing system would raise accountability and professionalism within the sector.

“This is already allowed in the procurement regulation but is not noticeably utilised for publicly funded projects,” Mullings said. He emphasised that Jamaican contractors who hire local labour, pay local taxes, and reinvest profits into the Jamaican economy should be given more consideration in public procurement processes.

National Contracts Commission has also highlighted this issue, noting that foreign firms frequently dominate major infrastructure projects despite Jamaican firms meeting eligibility criteria.

IMAJ, along with the Joint Consultative Committee — which includes Jamaica Institution of Engineers, Jamaica Institute of Quantity Surveyors, and Jamaica Institute of Architects — is also calling for a review of the forms of contract and contract conditions used for publicly funded projects. They argue that current contract terms are too rigid and place undue financial burdens on smaller firms.

A 2021 Office of the Contractor General report confirmed that these restrictive contract terms often lead to cost overruns and disputes, adding unnecessary delays to public projects.

Another significant issue is the high cost of performance bonds, which Mullings believes should be adjusted to better reflect the size and risk of each project.

Smaller contractors are often unable to afford these hefty financial guarantees, shutting them out of the bidding process for larger projects, he said. A study by Jamaica Surveyors Association supports this view, suggesting that lowering the barriers to entry would encourage broader participation from local firms and foster growth within the industry.

The current construction industry policy, introduced in 2014, addresses several key issues including the creation of an enabling environment that promotes fairness and transparency in procurement processes. It also aims to expand opportunities for local contractors, enhance occupational safety and health, and implement effective monitoring and evaluation systems.

Additionally, the policy includes provisions for environmental planning, recognising the importance of energy efficiency and climate change considerations in construction practices. However, stakeholders argue that these areas need further refinement to fully unlock the sector’s potential.