About $6 Million on drawing board Construction industry inches upward

Major government projects will stimulate the construction business this year as the Department of Public Works revealed the issuance of building and construction permits worth over $6 million last month.

The $5.2 million state-of-the-art Youth Detention facility project and two small-scale construction activities comprised the revenue generated by the Building Safety Code Division of DPW, safety official Donald W. Anderson disclosed Friday.

In addition to Youth Detention facility, bidding for the $25 million Marpi Landfill project is scheduled to start while the $26 million Correctional facility and two public high schools are set to start late this year.

Mr. Anderson said for the last five years, construction business has dramatically slowed down due to economic doldrum brought about by the Asian crisis which affected the Pacific region.

For the last quarter of FY2000, DPW generated an estimated $32.3 million project valuation from commercial, residential, government, demolition, and signage activities. In 1999, the DPW earned over $34 million worth of projects, he added.

In October last year, the DPW pegged an estimated $2.131 million revenue; $1.798 in November and $916,893 in December, Mr. Anderson said.

The building safety official explained that if not for the Capital Improvement Projects of the administration, the construction sector will remain inactive for FY2001 until major players are ready to infuse fresh capital to help the economy of Northern Marianas.

Investments for constructions are likely to come in trickles for the next two years, good thing there are small-scale renovations and repairs projects being undertaken by existing business establishments.

He said, aside from these multi-million government projects, other construction activities for this year are mostly residential and renovations such as the ABC store along Garapan, the Pacific Medical Center in Middle Road and two other small-scale construction in the southern part of Saipan.

“It has been like this for several years, unlike in the early 90’s, we have the Tinian Dynasty Hotel and Casino and the emergence of first-class hotels on Saipan. There is no project like that in the horizon right now,” said Mr. Anderson.

Based on the total breakdown for the fourth quarter of FY2000, the Building Safety Code Division inspected 790 buildings, 534 electrical, 141 plumbing, 545 other safety-code related activities and 92 safety inspections.

More than 125 commercial buildings, 178 residential houses, and 36 others were issued permits for complying with the safety code regulations of the Public Works department.

Earlier, contractors projected that the construction industry will be flat and slow in the next two years since no significant construction projects are in the horizon to drum up the economy of the NMI.

Players of the construction industry said there is a need to thresh out financing problems and government policies in efforts to help the industry to move up to prevent its further deterioration.

For the past four years, construction business in the Commonwealth has been experiencing drastic and unfriendly business climate which resulted in several closure and the pulling out of big companies.

By the year 2003, the industry will be seeing a bit of construction activity but it won’t be enough to turn around the current status of several construction firms, EFC Architects and Engineers president Efrain F. Camacho earlier said.

The EFC president even revealed that business environment in the Northern Marianas is not conducive and government policies are anti-business.

In 1999, construction sector fell below the $20 million mark despite initial capital funds of $100 million to boost the economy three years ago.

Officials attribute the decline to the staggering number of new investors in the CNMI and the approach taken by existing businesses which have decided to forego expansion due to weakening consumer confidence amid the recession.

Construction activities on the island amounted to only $18.5 million, which translate to 361 building permits approved by the Department of Public Works’ Safety Code Division, last year.

Of this, $5 million were earmarked for commercial construction activities while the remaining $13.5 million were primarily used to finance home or residential improvements.

In 1998, the industry pumped $48.3 million into the CNMI economy for 587 construction activities, majority of which were also concentrated in the residential sector.

The construction sector started spiraling downward in 1997 when total amount of activities fell to $65.2 million from the previous year’s $90.4 million, when erection of commercial structures outnumber activities in the residential sector.