Govt strangling housing, construction sectors

…should intervene to boost sector; stimulate economy – former Housing Minister

Private developers’ investment is driven by confidence in the economy and the Government’s approach towards the

Former Housing Minister Irfaan Ali

housing sector, but from all indications; it appears as though the A Partnership for National Unity/Alliance For Change (APNU/AFC) administration has no real direction in which it wants to take this sector – ultimately the country. This is according to former Housing Minister Irfaan Ali who has been observing with much alarm the current inactivity with respect to housing policies – most of which is to be blamed upon Government’s tepid general approach to the sector and lack of support projects to stimulate investment. “In my view, the policy approach to housing is not only regressive but lazy. The housing sector has to be driven by dynamic leadership,” Ali pointed out, hoping that Government immediately corrects its mistakes. Firstly, the former Minister advised that Government needs to shake off its slothful and uninspiring approach to the sector. “There is no excitement,” he highlighted, noting that private developers will not be attracted to a market that has not potential to grow. “The market has to be stimulated, vibrant and generally project positive outlook in terms of future value (FV) and net present value (NPV). For there to be a meeting of interest between the Government and Private Sector, the Government has to be seen as aggressive,” Ali explained. Secondly, he pointed out that Budget 2015 makes no provision for new infrastructural projects that would stimulate expenditure in the sector. Further, Ali reminded that the five alternative bypasses linking Diamond to Eccles have been shelved, noting that this is another flawed action by the Government which signals its disinterest in the housing sector. Thirdly, Ali recognised that there is not a single strategic approach in catalysing the potential of linking transformative infrastructure with housing. He said the Government has built up so much negativity around these projects that they have now virtually eroded the injective benefit it has for the economy. “An example of this was the marketing of Silica City as a spinoff of the New Airport and a transshipment hub that the Lethem Georgetown road link will create. A second example is the inability of the Government to reconcile with the vision of investing in the housing infrastructure for the new Ogle/ Cummings Lodge Area. So in essence, we will be building that new road link but delaying the supportive or secondary infrastructure that has the greatest potential to drive Private Sector activity,” the former Minister stated. Moreover, Ali admitted that the agreements with private investors must be adhered to but highlighted that if the Government’s negative approach is eroding confidence in the sector then more exposure in spending by the Private Sector can create greater national problems. He noted that most private developers operate on large over drafts or loans therefore if liquidity is used up in still assets or non productive assets then not only are the private investors but also the financial institutions exposed.