Should Jamaica’s government spend $1 billion to fix a property it doesn’t own?

There’s so much going on in this story, that I don’t even know where to start.

Tax Administration Jamaica came under fire recently for its plans to spend roughly J$1 billion to upgrade a property in Mandeville to become the new tax office.  That’s roughly US$6.4 million.

But is the real problem: 

1. A) They’re planning to spend that much money to fix up a leased building? 
2. B) They’ve been paying rent on the property for the last three years but the building is still unoccupied?

Or C… all of the above.

I’ll go with C, Alex!

According to reports tabled in Parliament, TAJ has spent J$451 million, to date, leasing an unoccupied property.

So it’s easy to see why the public is upset. Half a billion dollars has already been spent on an empty building and they plan to spend another billion dollars of taxpayers’ money to fix it up.  That’s rough.

Now, I live in Mandeville, so I know that something needs to be done about the current tax office. The space is a hot mess and there’s basically no parking.  Services are actually split across two separate locations in Manchester, which also serve Clarendon and St Elizabeth.

But the argument now is, well if you’re going to be spending a billion dollars, why not just buy and even build a property that the government can own? 

The property is actually owned by Sco-jam-pen Limited, a pension fund owned by Scotia Bank.  The lease is for 24 years with an option to renew. 

TAJ Commissioner General Ainsley Powell said when they did the numbers, it was ultimately determined that it would cost the Government more to build its own building than to lease and retrofit the one they have now.

As for the price tag, the agency said a whole lot of work is needed.  We’re talking demolition,  steel framing, fixtures and furniture, plumbing, mechanical, electrical, and an air conditioning system. 

It literally sounds like they’re building this place from scratch. 

But TAJ insists that leasing is a better deal because the cost per square foot is less than what they currently pay.

As for why they’ve been paying rent for three years on a building they haven’t set foot in, Powell said the procurement process was to blame.

Essentially, there’s a bunch of red tape that’s holding up the process. He explained that renovating a space that large requires Cabinet approval and a consultant to manage the project.

So then you end up with two separate processes. One for the consultant and one for the contractor.  The bidding and selection process can take up to 14 months.

On top of that, they had to restart the process of finding a contractor because four new bids were added after the cutoff date, last year.

So, it’s been very chaotic but it doesn’t seem like TAJ or the Government is willing to budge…

And that’s the bottom line.