Legislation or market forces?

Should market forces or legislation dictate local content? That was the question being asked by those attending a discussion forum on energy issues at the Trinidad Hilton. Mitch Clayman of ABT Engineer-ing and Construction raised the issue when the topic of local content was put under the spotlight. He took the view that there is only so much government can do by way of legislation. “Government,” he said, “should not get too invloved.” His feeling is that when that happens the market can get “too rigid.” He suggested that companies think about putting incentives and rewards into the contract and which should have a dollar value. His sentiments were echoed by one consultant from the floor who voiced concern over  government’s attempt to legislate local content in contracts. “For government to dictate local content, it might force local companies to go in a particular direction.” His suggestion?  “Let natural flow take its course.”       

The forum was organised by the Project Management Institute (PMI), Southern Caribbean Chapter. The topic was, “Filling the gap in project management, engineering design and project support resources in the TT energy sector. Energy Minister Eric Williams, in his presentation, noted that local content was a  key strategy towards narrowing the GDP/GNP gap. His intention is to ensure as much capital expenditure on major sector energy projects physically takes place in TT. Williams said that while the energy sector accounts for almost one quarter of GDP (Gross Domestic Product), there is a large and growing gap between GDP and GNP (Gross National Product) to the tune of about $2.7 billion. He also spoke of shortfall of local professionals, technicians and craftsmen in the energy sector, noting that TT now needs 620 professionals a year. Of the 1,300 engineers needed, only 120 are provided, a shortfall of about 1,100, he said. Andrew McIntosh said that in exchange for preferential gas prices, local content should be ‘X’. It should be a key performance indicator, he said.

Professor of Engineering at the UWI, St Augustine, took a dim view of things, saying that local content will “remain under the surface.” He said he was surprised by the cold response concerning local content. “I though there would have been more to say, that engineers would have come out blazing,” he said. Saj Mathura took a different tack. Local ownership means setting up a local company and then get foreign companies to form joint ventures with this company. Khem Black of Damus sounded pessimistic when he asked, “how much can we contribute.” Noting that drilling and exploration was already in the hands of the big players, his view was that TT could only contribute labour. But one consultant thought that local companies could develop a capability for handling the bigger projects. “Local content is defined for us,” was how one energy consultant put it. Design a platform? His answer was that TT had no capacity for that. “Competency? Yes. Capacity? No.”