Defective Cement, Stalled Projects and the Cost of an Imported Housing Sector

Kingston, Jamaica — 1 April 2006

In 2006, Jamaica’s construction sector was halted in its tracks by the recall of large batches of defective cement that had already been used in housing starts across the island. Some buildings had to be demolished. Workers were laid off. Projects stalled. It was a jarring episode in the middle of what had been a building boom, and it crystallised a vulnerability that had been present but underappreciated: Jamaica’s housing sector is dependent on imported materials it cannot quality-check at source, and when those materials fail, the consequences fall on the construction companies, the buyers, and ultimately the homeowners who bear the structural risk.

An Imported Sector

The cement episode illustrated a broader truth about Jamaican construction: the sector builds with inputs it does not control. Cement production totalled more than seven hundred thousand tonnes in 2008, but the island was also importing more than two hundred thousand tonnes that year, up sharply from the seventy-five thousand imported the year before. Steel, lumber, electrical components, and roofing materials all travel through ports whose throughput is subject to global shipping conditions, container availability, and the pricing decisions of international commodity markets. The construction sector’s cost structure is therefore not primarily determined by what happens in Jamaica. It is determined by what happens in the world.

That dependence creates two categories of risk. The first is price risk: when global commodity prices rise, or when the Jamaican dollar weakens against major trading currencies, the cost of building in Jamaica rises. That pressure either increases the final price of housing, reduces developer margins, or does both simultaneously, and in a market where affordability is already strained for the majority of potential buyers, any increase in construction cost makes the affordability problem worse. The second category is quality risk, as the 2006 cement episode demonstrated. Material that passes import inspection may still fail in use, and the consequences of structural failure in housing are not recoverable through a straightforward market mechanism.

The Role of Standards

The Bureau of Standards Jamaica has a mandate to set and enforce standards for building materials and construction products. The cement recall raised questions about whether that mandate was being exercised with the rigour that the stakes demand. Imported electrical wire and water pipes have also been the subject of concern about quality, with reports of substandard products entering the market and being incorporated into housing stock whose future inhabitants bear the consequences. Building inspections, compliance requirements for imported materials, and the consistent enforcement of standards are all part of the infrastructure of a housing sector that can be trusted by those who buy into it.

What Homebuyers Should Know

For individuals building on their own land or buying newly constructed homes, the quality of the materials used in construction is not something they can easily verify from the outside. Engaging a quantity surveyor or a competent builder with a known track record, specifying materials from reputable suppliers, and including appropriate inspection requirements in construction contracts are practical steps that reduce but do not eliminate the risk. Jamaica’s housing sector has a long way to travel before the supply chain risk is systematically managed rather than individually managed. In the interim, informed buyers and builders are the first line of defence.

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