THE Government is spending $36,865,320.88 million a month on rent.
That’s $442,383,320.88 million a year on the rental of buildings for offices and storage space.
The sum is spread over 350 properties.
At least 136 of these properties are located in the dense, just over ten square kilometres of Trinidad and Tobago’s capital city, Port of Spain.
For many of those properties, the leases have expired and are being maintained on month-to-month contracts.
In some instances, State enterprises are renting from other State entities — for instance, in Chaguaramas, the Ministry of Finance rents a space from the Chaguaramas Development Authority for its Customs and Excise Division, in South Quay the Ministry of the Attorney General rents a space from the National Insurance Board and the Integrity Commission pays $19,971 a month to the Unit Trust Corporation for its office space.
The rents in Port of Spain were significantly higher but decreased significantly for properties in the East, Chaguanas and South.
According to data obtained by the Sunday Express from Government rental documents:
1. The most expensive rentals to the State are One Alexandra Place at 1 Alexandra Street and 3 Alexandra Street, St Clair.
Both properties are rented from companies owned by the wife of Attorney General Faris Al-Rawi, Mona Nahous Al-Rawi.
One Alexandra Place is rented from NJ Nahous Investments Ltd by the Ministry of Public Utilities for $600,000 a month while 3 Alexandra Street is rented from Zaman Enterprises Ltd at $575,000 by the Personnel Department. Both properties have three-year leases.
2. NJ Nahous Investments Ltd also rents to the Ministry of Social Development and Family Services at 45A-45C St Vincent Street, Port of Spain for $159,000 a month.
It also rents a property at the corner of Agra Street in St James to the Trinidad and Tobago Police Service for $356,000 a month.
3. The cheapest rental is to Prakash Persad.
He rents an office to the Ministry of Education to be used as a district office in Sangre Grande for $1,455.
4. The State pays $54,400 a month to rent a property from Vernon Da Silva at Goodwood Park for Chief Justice Ivor Archie.
Da Silva also rents a building on Melbourne Street, Port of Spain for the Ministry of Labour for at $387,000 a month.
5. The Ministry of National Security is renting a property on Mucurapo Road from DW Property Holdings Ltd.
It is owned by Daryan Warner, the son of former national security minister Jack Warner.
Daryan Warner pleaded guilty in US courts on October 25, 2013 after he was charged with wire fraud conspiracy, money laundering conspiracy and the structuring of financial transactions.
His property was rented in October 2013 for three years.
It is still being rented and used for the Citizen Security Programme.
6. The Government rents two spaces at Palms Club from the Oilfields Workers’ Trade Union. The spaces are for the Ministry of Finance valuation division and the Ministry of Planning and Development. The total rent for the two spaces is $65,000 a month.
7. It rents a space from the Public Services Association for the Ministry of Education for $31,000 a month.
8. It also rents a space from the Law Association of Trinidad and Tobago for the Ministry of Gender, Youth and Child Development for $49,676 a month.
9. Nicholas Development Ltd, owned by businessman Issa Nicholas, has several Government rentals averaging $50,000 a month.
10. The Judiciary rents from the National Insurance Board at $218,000 a month for the Family Court.
11. The Judiciary also rents from contractor Kallco, Kall Properties Ltd for $70,000 a month for storage on Duke Street in Port of Spain.
Auditor General’s red flags
The opening of the Government Campus Plaza, where the Ministry of Finance’s Customs and Excise has moved to, has cut the Government rental bill by millions.
In annual reports, the Auditor General has raised concerns about rents and management.
In 2017, rents paid by Ministries and Departments were in excess of $790 million.
In the 2018 report, the Auditor General noted that signed lease agreements were not produced for certain properties.
“In the absence of written, executed lease agreements, it could prove more difficult to enforce the State’s rights under the agreement, leaving the State in a potentially more vulnerable legal position. The public’s interest is not best protected where lease agreements remain informal and unexecuted,” the Auditor General’s report noted.
At the Judiciary, there were no Cabinet approvals for 21 properties at an annual cost of $16,974,807.08.
In one instance, rental payments totalling $3,135,484 were paid for one unoccupied property for the period August 19, 2016 to March 6, 2018 with the building only being occupied from March 7, 2018.
At the Service Commission Department, Cabinet approvals were not seen for rental of three properties totalling $9,588,885.00.
And at the Personnel Department, Cabinet approvals were not seen for six properties with rent totalling $4,321,606.15 and status reports for four development projects amounting to $7,283,004.15 were not produced.
At the Ministry of the Attorney General and Legal Affairs, Cabinet approval was not seen for 22 properties rented by the Ministry for the sum of $23,464,981.20.
At the Ministry of Health, an amount of $540,000 was paid to one landlord who was not VAT registered.
In 2012, the Ministry of the Attorney General and Legal Affairs rented a building on Pembroke Street in Port of Spain for $100,000.
So far, $9.5 million has been spent —($5.2 million in rent and $4.3 million in for refurbishment).
It has never been used.
Economist weighs in
The University of the West Indies economist Dr Vaalmikki Arjoon noted that for the private sector, the State is a major tenant.
“This was never sustainable to begin with, because in many instances, it has unnecessarily haemorrhaged millions of taxpayers’ dollars over the years. This is especially in those cases when they are paying overly exorbitant prices to rent these properties, and they are either not being used to full capacity, or simply not being used at all,” he told the Sunday Express in response to questions.
He suggested that the money spent on rent could have been used to meet other urgent budgetary obligations, especially for upgrading capital expenditure, health care services and access to clean and potable water.
“What makes this even more counter-intuitive is that the State owns facilities that are currently unoccupied — they prefer to pay high rental costs each month to house their ministries and agencies in privately-owned buildings, rather then house them in buildings that they own. These unoccupied facilities are also a drain to the State’s coffers as they also have to be maintained which carries a hefty cost, but are not providing any value to the economy as they are lying there unoccupied. “However, on the flip side, when the time comes for the State to start using their own properties and significantly reduce the extent to which they rent, it is possible that this can cause a serious glut in the rental market since the State is a major tenant. Such a glut can depress rental prices, which again highlights that State rentals were not sustainable to begin with,” he explained.
In Arjoon’s view, the taxpayer is not getting value for money and in many cases when the State rents.
But this is no fault of the landlord.
“If the State is using significant taxpayer dollars to rent office spaces and properties in order to provide their public services, then these services should be timely and of exceptional quality. “Much of these and other services are provided in facilities that are rented, and therefore shows that the taxpayers are not getting sufficient value for their tax dollars when they need to access these services. The quality of the service is not reflected in the amount paid for rentals,” he said.
He noted that many of the properties are rented by the State and are concentrated in Port of Spain.
Much of the properties rented by the State are in the Port of Spain area, as this is where most ministries and agencies are based.
“There is, however, an urgent need to decentralise the public sector and increase the spread of various ministries and government agencies across the country. This carries significant benefits. It will reduce the extent of renting in the Port of Spain area while landlords in the rest of the country will have an opportunity to share in the rental income by renting to the State. There will therefore be less inequity in the distribution of rentals across the country. In addition, the State could benefit as the cost of renting properties in central and south Trinidad may not be as high as the Port of Spain area.
“Of course, this decentralisation will foster greater employee productivity in the public service, as many will be able to work closer to home and not have to lose valuable hours each day in traffic to go to Port of Spain,” he said. “It also frees up commercial spaces in Port of Spain for other private sector entities to utilise. Indeed, there are spaces that the government is currently using which could otherwise be used more productively by a private entity, such as the Port of Spain Waterfront to house Parliament. This could alternatively be used as a sub-office for an international energy company when Parliament relocates to the Red House.”