Build the Relationship

REVIEW SUMMARY
Company. GDG Beton et Construction S.A.
Industry. Construction
Key. Build personal relationships with the top boss.

Michael Gay is hoping to supply concrete for a hotel project in Haiti, but you can bet the general contractor on the job probably won't be an American firm.

While Florida construction companies wallow in their own economic misery, their Canadian, European, Jamaican and South American counterparts are jumping at the opportunity to participate in the reconstruction of the impoverished island country.

The opportunities are monstrous. Gay, a Naples-based resident who operates the largest concrete plants in Haiti, says as much as $10 billion in aid may flood the country in the next decade.

Where are the Florida construction firms starved for work?

“I haven't run across anyone who's expressed any interest,” says Shawn Anderson, president of TKW Consulting Engineers in Fort Myers. He echoes what many of the building-trade organizations from Tampa to Naples report: No one wants to build in Haiti.

Anderson, who has volunteered for recovery work in Haiti, is one of the few on the Gulf Coast who has held discussions with Gay about the hotel development that will be financed by a group of Irishmen.

That's surprising considering the fact that revenues at many Gulf Coast-based construction firms have collapsed. But speaking with Gay and Anderson, it's clear that most Florida construction firms still have misconceptions about doing business there. Foremost among them is that they can't do business without bribes.

“I've seen more corruption in Boston than Haiti,” quips Gay, who oversaw the engineering of the 9.5-mile Deer Island Outfall Tunnel project for construction giant Kiewit Corp. Gay retired from Kiewit in 1999 after 27 years with the company and started his own firm in Haiti, GDG Beton et Construction S.A., in 2000.

Gay says it is possible to do business in Haiti without resorting to bribery. “I've been doing business there for 10 years and I never paid a penny to anybody,” he says. That's because he says he hasn't had to and is quick to point out that corruption can't work without two willing participants: The one who asks and the one who gives.

The logistics can be daunting, too, because basic infrastructure such as roads and sewers are virtually nonexistent. How much supervision will the work require? Where will workers live and how will they eat? What materials need to be imported and how? “There's a lot of that type of work that has to be thought through,” says Anderson.

But the opportunities to rebuild the country are so substantial that it outweighs many of the risks and hassles. Indeed, Gay's firm has been involved with most major construction projects in Haiti in the last few years. These included the construction of the U.S. Embassy, which withstood the earthquake, and the headquarters and towers of cellular phone company Digicell.

Gay's experience is a good guide to anyone exploring opportunities in Haiti. Establishing face-to-face relationships is important and patience is a must, he says.
Nostalgia for Haiti

When Gay took early retirement from Kiewit in 1999, he bought a home in upscale golf community of Quail West in Naples. He had reached the upper echelons of Kiewit, overseeing engineering projects such as the Eisenhower Tunnel in Colorado and other high-profile work such as the Washington D.C. subway.

Fueled in part by nostalgia, Gay felt he could use his skills to help the country of his birth. His father, an agronomist, died when Gay was 14 years old and his mother moved him and his four siblings to New York in search of a better life.

Gay earned a civil engineering degree in New York, working to put himself through school. He spent 27 years with Kiewit, rising through the ranks of the company as it grew into a Fortune 500 firm with $8 billion in revenues today.

When he retired at age 52, Gay says he was too young to hit the golf links at Quail West permanently. When he started GDG Beton in 2000, he enlisted his brother and cousin to help. His cousin, Patrick Delatour, has since left the company to become the country's minister of tourism.

Back then, workers mixed concrete by hand or using small mixers on site. Gay's idea was to build a plant that would mix it in large batches and dispatch mixer trucks, the same way it's done in the U.S. “When I got there, people said you're crazy. It'll never work,” he recalls.

Getting a permit was difficult because government officials feared Gay's plant would displace low-skill workers who mixed concrete by hand. But the tall, soft-spoken engineer didn't back down.

“I'm pretty tenacious,” he laughs. “I was able to show them I was investing a lot of money, I would employ a lot of people and do major construction projects faster.”

Getting a permit to do business in Haiti didn't happen overnight, but he wasn't denied. Gay says the process took six months, or about the same time it takes for municipalities on the Gulf Coast to approve a building project. Now the company has two plants and employs 50 people in Haiti full-time who operate concrete pumps, loaders and backhoes.

Gay says the biggest challenge is the lack of urgency. “You seem to be the only one who feels that way,” he says. Gay refuses to pay bribes to speed up permits or receive special consideration, a fact that can delay a development by months. “It can be very daunting and frustrating,” he says. “A lot of times you don't even know what the problem is.”

Gay travels every two weeks to Haiti. He and his brother alternate their visits so that one of them is always there at any given time.
So much for retirement. “It's almost a little bit more than I bargained for,” he chuckles.

Get to know the boss
Gay says the key to doing business in Haiti is to develop relationships with the right people. “The only way to get through is to use local people who know how to get things done,” he says.

How do you find these people? “They'll find you,” he says. His advice: “Take it slowly. Give them a small assignment and see.”

And you don't have to be Haitian to have an inside track. “There's a Canadian who works for me and gets around better than I do,” says Gay.

Although the population of the Haitian capital, Port-au-Prince, is 3 million, “it's a very small city when it comes to business.” If you want to do business in Haiti, it pays to find a local partner who can make introductions.

It's important to meet people face-to-face, Gay says, though it's no different from when he was an engineer at Kiewit evaluating subcontractors. “I'd get in my car and visit their plant,” he says.

Haiti has a more European way of doing business, where the boss is often the sole person who makes decisions.

“The only person who matters is the top boss,” Gay says. That makes it hard to delegate power to his own employees and requires you to reach the top person to get anything done.

That's also why Gay has been reluctant to employ any of his three U.S.-born children. “With the boss's son, if you put them in too early, you don't do them a favor,” he says.

Corporate work
Gay, whose aunt and uncle were crushed to death in the earthquake, says most of his business is corporate work because government projects have been slow to get started. He complains that more than one million people are still living in tents six months after the disaster, which Gay estimates killed 300,000 people, 100,000 more than official estimates.

“I've got over 25 Mack trucks sitting there while bureaucrats are turning their fingers,” Gay says.

Gay says a USA Today newspaper reporter tried to bait him recently by insinuating that he had special access to government work because his cousin and former business partner is now the tourism minister, not realizing that 95% of Gay's work is corporate. “I didn't go to Haiti to make money,” Gay says. “I'm no fan of the government.”

The fact is that Haiti's government has very little money. “They're at the mercy of the international community,” Gay says. Donor nations and non-governmental organizations hold the reconstruction funds, though they're sometimes no better than the government. “Each has its own agenda, bureaucracy and priorities,” Gay says. (Anderson says he's heard that the Clinton Global Initiative may be in charge of doling out donor money.)

Non-governmental organizations sometimes are more interested in self-promotion than helping Haitians. “They're even more bureaucratic than governments,” Gay says. “There is very little you can do to control them.”

For example, one organization pledged to build 500 homes for Haitians but they're 10-by-12 foot concrete boxes with no plumbing. Gay suspects it's nothing more than a public-relations stunt to reap more donations from gullible donors in the U.S.

About 95% of Gay's work in Haiti is for the private sector, though he has landed a few public projects such as helping the Seabees repair the airport runway in Port-au-Prince. The Seabees are the construction battalions of the U.S. Navy.

But Gay is worried that some of the donor money that's been promised may never materialize as the disaster becomes a more distant memory. “I'm concerned the
story is fading,” he says.