Commissioner General of the Guyana Revenue Authority (GRA) Khurshid Sattaur says the agency is paying some $5 million in rent to the National Insurance Scheme (NIS) for the use of the former Clico building on Camp Street.
Speaking to the Stabroek News yesterday, Sattaur said that the GRA finally settled on an occupancy arrangement with the NIS for the building, which now houses all but the Licence Revenue Division of the GRA.
“We will be paying a lease of $5 million a month for a 10-year lease,” he said.
The amount being paid by the GRA was the target of speculation months ago when Head of the Presidential Secretariat, Dr Roger Luncheon had announced that the GRA would be paying a rent of $10.5 million monthly. He later stated that he made an error in giving this figure as the rental.
The GRA Commissioner General said that from the value of the building, which he estimated to be about $1.2 billion, an economic monthly lease for the property would have been in the vicinity of $12 million. He said that the GRA considers the payment of $5 million a month to be a good deal but said that the agency has had to spend huge sums of money to outfit the building and adapt it for use.
The GRA had hired a consultancy firm at a cost of $4.5 million under a competitive bidding process to prepare the building for occupancy. Government then awarded a contract for $227.1 million to complete and modify the building so that it could be occupied by the GRA.
Luncheon had in November 2012 said that the terms of the occupancy would have been finalized after the GRA would have completed its move to the Camp Street location.
Sattaur had noted that the cost of leasing the building should not exceed what it would have cost to rent all the buildings that the GRA had occupied at that time.
Critics had argued that it did not make good economic sense for the GRA to be using taxpayers’ money to pay a hefty monthly rent to the NIS. They had said that it would have been more appropriate for the GRA to purchase the building or another to permanently house its varied offices.
Some observers saw the rental deal as a means of improving the cash flow of the NIS which for the first time in its history last year saw a deficit in its income compared to outflows.
The NIS acquired the Clico building as part of the liquidation of Clico and as part settlement of the money that had been owed to the Scheme. During 2012 Dr. Luncheon said the building would require significant and continuous upgrading and noted that the task force had developed a plan. He had said that millions would have to be spent to implement that plan and that the NIS and GRA would work out an occupancy arrangement.
The departments now housed in the Camp Street building are the Customs and Trade Administration, which used to be at Customs House, Main Street, the Human Resources and Finance Division and the GRA Secretariat. The offices of the Internal Revenue Division which used to be at the Guyana Post Office complex on Robb Street are also now housed at the Camp Street location.
With regards to parking, Sattaur said that the GRA is paying private landowners to utilize their lots for parking purposes and he said that the GRA has helped mitigate the congestion of the surrounding areas. “People are recognizing that there is a need for parking facilities,” he said, noting that the business community is coming on board by providing space for parking.
