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Cablegate: Dr Firms Ask to Be Allowed to Bid On Haiti Reconstruction

VZCZCXYZ0001
RR RUEHWEB

DE RUEHDG #0057 0432047
ZNR UUUUU ZZH
R 122047Z FEB 10
FM AMEMBASSY SANTO DOMINGO
TO RUEHC/SECSTATE WASHDC 0740
INFO RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBH/AMEMBASSY NASSAU
RUEHC/USAID WASHDC 0020
RUEHDG/AMEMBASSY SANTO DOMINGO
RUEHKG/AMEMBASSY KINGSTON
RUEHPU/AMEMBASSY PORT AU PRINCE
RUEHSP/AMEMBASSY PORT OF SPAIN
RUEHUB/USINT HAVANA 0090
RUEHWN/AMEMBASSY BRIDGETOWN

UNCLAS SANTO DOMINGO 000057

SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECON HA DR
SUBJECT: DR Firms Ask to Be Allowed to Bid on Haiti Reconstruction
Contracts

1. On 2/10, Charge and Emboffs met with representatives of the
Association of Industries of the Dominican Republic (AIRD) to
discuss the Dominican private sector's desire to bid on Haitian
reconstruction projects. The representatives were from the two
largest producers of reinforced steel and roofing materials in the
Dominican Republic - INCA and METALDOM - and used their sector as
an example of the situation faced by the whole of Dominican
industry. Francisco Garcia, the President of INCA, highlighted
that many of his sector's products, such as rebar and PVC pipes,
not only meet ASTM standards but also qualify as "Buy American"
given their significant U.S.-produced content (from suppliers such
as Nucor, Shintec, Oxy, and Ameristeel). Garcia provided a list of
items INCA has on hand for immediate delivery, including 25,000
metric tons of rebar, 200,000 units of galvanized roofing sheets,
and 1,000 metric tons of PVC pipes and fitting. (NOTE: Post will
send the full list and the aide-de-memoire provided by the group
via e-mail to WHA/CAR. END NOTE.) Moreover, INCA and METALDOM can
work in tandem with DR-based construction companies on
reconstruction projects; for example, a Dominican construction firm
has experience building low-income housing, constructing 5,000 to
10,000 units per project.

2. Haiti is both companies' largest export market; they provide 60
to 80 percent of the reinforced steel in Haiti and they are major
supplies of rebar and PVC pipes. Since the earthquake, this market
has virtually disappeared. Although the companies believe business
will revive once reconstruction projects begin, they are concerned
that the influx of donated construction materials has the potential
to significantly undermine such a revival by creating excess supply
of goods. Garcia claimed that a similar situation occurred in
Jamaica after a hurricane several years ago, where a flood of
roofing material created a 10-year stockpile and destroyed the
local roofing plant. He noted that DR rolling mills are only
operating at 50 percent capacity and its roofing plants at 40
percent capacity, so they have sufficient inventory and capacity to
sell to Haiti immediately (as noted above). Moreover, given the
advantage the companies enjoy due to proximity, they can also have
the material into Haiti in six hours. Garcia stressed that they
are not looking for favored treatment, but rather the opportunity
to bid.

3. The Charge noted that he has been an advocate of improved
business ties between Haiti and the DR and asked Garcia to supply
information outlining the capabilities of INCA, METALDOM, and other
DR firms in supplying building materials and working with Dominican
construction firms to build housing. The Charge also suggested
they meet with other donors - such as the Canadians and UNDP - to
improve their visibility. Garcia replied that they had already
provided the list of goods they can supply to the Clinton Global
Initiative.

4. MINIMIZE CONSIDERED.
Lambert

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