Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

81 existing plans had to be reviewed in order to reduce the construction costs. The Annual Report of 1981 reported (p.26) that construction had been slowed “... by the extraordinary rise in building costs in Barbados.” With the completion of the piling, contract tenders were invited for the construction of the office block and auditorium. However, these quotations were far in excess of what the Bank was prepared to pay. As a result it was decided to postpone the construction of the auditorium and to concentrate on the office block. By late 1981, the only remaining tenderer for the construction was the UK firm of Higgs and Hill, whose bid had been reduced from $78 million to $63 million. However, the Building Committee felt that the cost of the office block should be no more than $40 million, even if it meant sacrificing a floor or two. They were concerned that the high cost of the building would push up rental charges and negatively impact the availability of labour in the construction industry and the Bank’s public image, in light of the contraction in the economy and a slowdown in the Government’s capital works. The prime minister supported a ten-storey building but felt that the cost should not be allowed to exceed $55 million. Higgs and Hill was requested to reduce its profit margin and to pursue other cost-cutting initiatives. By year-end, the costs of the main building were estimated at $46.9 million, exclusive of taxes and levies but no further savings could be effected in respect of the auditorium. After some specification and design changes during the first half of 1982 it was decided to go ahead with constructing a ten-storey building costing about $60 million. 47 In September that year, it was stipulated that three of the floors would be rented and a medium-term financing programme of US$10 million put in place to pay for imported goods and services. Agreement was also reached, in principle, to award the contract to Higgs and Hill and a letter of intent sent to that firm so that work could proceed. The letter covered a six-month period and permitted $15 million in expenditure, pending the execution of a formal contract for the entire project. At the same time the contract for the security systems was awarded to Mosler Inc. of the United States. The design of the building was intended to meet the Bank's office demands for 25 years and to house all Chapter 3: Consolidation: 1976 to 1986