HDC to end 50 maintenance contracts; signals more jobs cuts to come

Akash Sama­roo

Lead Ed­i­tor- Pol­i­tics

akash.sama­[email protected]

The Hous­ing De­vel­op­ment Cor­po­ra­tion (HDC) will end its con­tracts with at least 50 main­te­nance providers and their em­ploy­ees by year’s end and has sig­nalled the pos­si­bil­i­ty of fur­ther staff re­duc­tions as its chair­man seeks to re­verse, what he says, is a decade of se­vere fi­nan­cial mis­man­age­ment.

In an ex­clu­sive in­ter­view with Guardian Me­dia at the HDC’s South Quay of­fice yes­ter­day, Chair­man Feeroz Khan paint­ed a pic­ture of the cor­po­ra­tion’s cur­rent fi­nan­cial predica­ments, which he said have led him to take cer­tain “cor­rec­tive ac­tions.”

“The HDC has post­ed loss­es of over $700 mil­lion for the last fis­cal year in Sep­tem­ber 2025, and the pre­vi­ous fis­cal year in Sep­tem­ber 2024. The net re­sult of that is that, as we speak to­day, I have payables of over $600 mil­lion. I am over­drawn on my bank ac­count by $100 mil­lion, and I have a deficit to the em­ploy­ees’ pen­sion plan of about $400 mil­lion,” Khan said.

He said sev­er­al fac­tors con­tributed to the debt, start­ing with the gap be­tween what it costs to con­struct an HDC hous­ing unit and the sig­nif­i­cant­ly low­er price at which it is sold.

“We have been build­ing hous­es that cost on av­er­age $1.6 mil­lion, that have been sold for $600,000 and $700,000, and $500,000.”

The HDC chair­man added, “So if we are build­ing a house with $1.6 mil­lion and sell­ing it for $600,000, it might make more sense for the Gov­ern­ment just to call every­body and give them a mil­lion dol­lars and say ‘go buy a house’.”

Khan said an­oth­er con­tribut­ing fac­tor to the debt is ex­or­bi­tant fees paid to com­pa­nies to main­tain HDC prop­er­ties.

“There’s a par­tic­u­lar con­trac­tor who is well known, and he had some grass to cut in Cou­va, and the equiv­a­lent on three dif­fer­ent parcels was the equiv­a­lent of 24 lots or three acres. Some­body with a trac­tor will be able to cut an acre of grass for about $500. So if you had to cut three acres of grass, be­cause it’s in close prox­im­i­ty, it would have been about $1,500. Dou­ble it for the sake of say­ing, well, you want to pay the man well. So you’re pay­ing him $3,000. You know how much HDC was pay­ing this spe­cial con­trac­tor for cut­ting those three acres of grass? $18,000 plus VAT. And he was col­lect­ing that every month for the last nine and a half years.”

Khan al­so pro­vid­ed a doc­u­ment show­ing how the cost of a sew­er treat­ment plant bal­looned from $3.6 mil­lion to $34 mil­lion.

“A de­ci­sion was tak­en to build 400 hous­es in Bon Air West, and that they would hook in­to an ex­ist­ing sew­er treat­ment plant. And a con­tract was is­sued for $3.6 mil­lion. By 2020, they de­cid­ed that we may want to add an­oth­er 300 hous­es to that de­vel­op­ment, so let’s up­grade the sew­er treat­ment plant. So the con­tract went from $3.6 mil­lion to $5.1 mil­lion. And no work was done in that time. By 2022, some­body on a site vis­it said, we know this treat­ment plant is not ad­e­quate, that the amount of waste­water that we need to treat needs to be in­creased. And the price went from $5.1 mil­lion to $19 mil­lion. And then, be­fore the ink could dry on the pro­pos­al for $19 mil­lion, they upped the price to $29 mil­lion. And the con­trac­tor wrote the HDC, in­di­cat­ing a price of $29 mil­lion for the sew­er treat­ment plant. And you know what HDC did? HDC wrote back to the con­trac­tor say­ing, ‘We ac­cept your vari­a­tion at 29 mil­lion, and we will add the 5 mil­lion orig­i­nal cost to it and make the price $34 mil­lion’.”

Khan said, in ad­di­tion to all of that, there are sig­nif­i­cant over­heads that the HDC has to cov­er.

“The over­heads of the or­gan­i­sa­tion are about $40 mil­lion a month, and the two biggest items on that over­head are the wages and salaries, which is about $15 to $16 mil­lion, and some of those main­te­nance con­tracts ($10 mil­lion) that have over the years been giv­en to the same peo­ple, and you would have heard some of the names of per­sons who got those con­tracts, and not one of those con­tracts had ever been ten­dered.”

Khan said “cor­rec­tive ac­tions” now need to take place.

First­ly, he said the HDC will look to re­duce its con­struc­tion costs for hous­es. Then it will have to ex­am­ine its over­head costs as they per­tain to its con­trac­tors and staff on con­tract.

He re­vealed the HDC has 401 dai­ly-paid work­ers and 365 month­ly-paid work­ers. Of the 365, around 300 are on con­tracts.

“We’re try­ing to keep the or­gan­i­sa­tion sus­tain­able. But I have to be able to meet the pay­roll. And I pre­fer for us to have a small­er or­gan­i­sa­tion and be able to meet the pay­roll rather than have a big or­gan­i­sa­tion.”

Al­ready, 26 peo­ple from the HDC sub­sidiary, Con­struc­tion Com­pa­ny Lim­it­ed (CCL), have not had their con­tracts re­newed.

Asked if more job cuts are com­ing, Khan said, “It is not our pre­ferred op­tion, but it is not out­side the realm of pos­si­bil­i­ty that some­thing could hap­pen.”

How­ev­er, he is not de­scrib­ing it as a ter­mi­na­tion, but rather that, when the con­tract­ed pe­ri­od is over, it would not be re­newed as eas­i­ly as it was in the past.

“When you sign on for a con­tract for two years, that’s what it is. You have a con­tract for two years. I don’t have an oblig­a­tion to make that con­tract four years or six years or eight years or for life.”

Asked point­ed­ly if the con­tracts with the 50-odd main­te­nance com­pa­nies will be ter­mi­nat­ed, Khan said, “Yes, be­cause these are con­tracts that were not prop­er­ly ten­dered in the first in­stance, that were il­le­gal­ly ex­tend­ed af­ter the OPR came in­to be­ing. There is no pro­vi­sion for ad hoc ex­ten­sion.”

Khan said the main­te­nance jobs that those com­pa­nies per­formed could be done by the 400 dai­ly-paid work­ers at the HDC. He be­lieves that can lead to sav­ings of around $10 mil­lion a month.

Ef­forts to con­tact Pub­lic Ser­vices As­so­ci­a­tion (PSA) Pres­i­dent Fe­l­isha Thomas were un­suc­cess­ful. On Tues­day, Thomas ex­pressed shock over the HDC’s de­ci­sion not to re­new the con­tracts of the 26 CCL work­ers and said she would be meet­ing with the cor­po­ra­tion this week to de­mand their re­in­state­ment.

Asked if he in­formed the PSA that the staff com­ple­ment will be ex­am­ined, Khan said, “Well, they are aware that we are in an un­healthy sit­u­a­tion.”

At­tempts to con­tact for­mer Hous­ing Min­is­ters Adri­an Leonce and Pen­ne­lope Beck­les, now Op­po­si­tion Leader, were al­so un­suc­cess­ful.