Millions wasted by gov’t on long leases for buildings
Loading article...
THE EDITOR, Madam:
Jamaica cannot keep wasting taxpayers’ money on long‑term leases that deliver nothing. Two recent cases from Tax Administration Jamaica (TAJ) show exactly why government should be buying buildings instead of renting them forever.
In Annotto Bay, TAJ has already spent over J$23 million on a building that sat empty for years. Renovations were never completed, and taxpayers paid rent month after month with no public service delivered.
In Greenvale, Mandeville, the situation is even worse. TAJ spent more than J$356 million over three years on a 42,000‑square‑foot building – again without occupying it. No equity. No benefit. Just rent receipts. Given the shortage of suitable building in central Mandeville, a property on the outskirts of Mandeville should have been acquired and developed. Even if this meant running a free shuttle bus from the TAJ building on the outskirts of Mandeville to central Mandeville on an hourly basis.
These cases highlight a deeper problem: Government ministries occupy buildings for decades, yet continue signing leases that burn money and build nothing.
Why Buying Is Better Value for Money
Buying gives Jamaica ownership, equity, and long‑term stability. Loan payments are predictable, government borrowing rates are lower than rent escalation and, at the end of the repayment period, the country owns a valuable asset. Ownership stops the cycle of rising rents, landlord profits, and empty buildings draining the public purse.
Leasing, on the other hand, gives Jamaica no equity, no asset, and no long‑term value. After 10 or 20 years of rent payments, the government walks away with nothing.
The Auditor General’s Role
The Auditor General has already exposed millions wasted on unused leases. Going forward, the Auditor General must insist that every ministry conducts a comprehensive lease‑vs‑buy Net Present Value (NPV) analysis before committing public funds (that should be approved by the appropriate government committee). This is the only way to ensure decisions are transparent, defensible, and grounded in proper financial stewardship.
Before another ministry signs a long‑term lease, Jamaicans must demand this level of scrutiny. We cannot afford more empty buildings and wasted millions. It is time for government to start buying, not renting forever.