Update | TAJ addresses concerns about nearly $1 billion retrofitting plan for leased Mandeville property
Published:Wednesday | May 29, 2024 | 5:08 PM
Tax Administration Jamaica (TAJ) says its decision to spend approximately $1 billion to retrofit a building in Mandeville, Manchester that it leased more than three years ago but has not yet occupied is part of efforts to improve service delivery and efficiency in the collection of tax revenue in central Jamaica.
There have been public concerns over the proposed spending.
In a report by the Auditor General's Department, which was tabled in Parliament in March, it was highlighted that TAJ spent $357 million up to August 2023 to lease the Mandeville property.
On Tuesday, Parliament's Public Accounts Committee was informed that the TAJ has spent an additional $80 million to date for leasing the building.
It now moves the total sum for leasing an unoccupied property to $451 million in just over three years.
TAJ Commissioner General Ainsley Powell said procurement issues were causing the delay in occupying the building.
Further, Powell said it was determined it would be more costly for the Government to construct its own building, than to spend the estimated $1.5 billion – and climbing – cost to lease and retrofit the building.
In a statement this afternoon, the tax authority reiterated those points, noting that tax services in Manchester are offered from two separate locations and that the offices serve Jamaicans in that parish as well as those in Clarendon and St Elizabeth.
It argued that given the high volume in tax services, over 250,000 payment transactions plus other services yearly, and an environment where customers have to wait long, sometimes outdoors under tents and exposed to the elements, it is believed that the best course was to go the route of having a new revenue service centre.
“After an exhaustive search, the best option available to the TAJ was to enter into a long-term lease of a property on approximately one acre of land, which allows the TAJ to build what will be the 3rd largest Revenue Service Centre in Jamaica to serve the citizens of Mandeville. It is envisioned that Jamaicans in central Jamaica will also make use of this new facility.”
Addressing paying a lease for an unoccupied property, it stated that the Government's procurement process requires a signed lease for property before commencing the procurement to engage technical and contracting services for works.
It explained that the procurement process for renovating the space of the size leased requires Cabinet's approval and a consultant to manage the project.
It therefore means two separate procurement processes, one for the consultant and another for the build-out contractor, which cumulatively can take up to 14 months for completion, the TAJ outlined.
“In addition to the lengthy timeframe for the process, the procurement for the building contractor failed on the basis that four additional contractors in the category, which responded to TAJ's invitation for bids, were added to the procurement platform after the expression of interest phase but before the date for return of bids in August 2, 2023.”
The tax authority stressed that it is guided by the tenets of proper public procurement.
Regarding the property, the TAJ stated that it was previously used as a Mega Mart outlet and is sub-leased from Cost Club Limited, the developers of the overall development in which the new revenue service centre will be situated, which includes other commercial enterprises.
It said the lease is for 24 years with an option to renew.
Scojampen Limited, the Bank of Nova Scotia Pension Fund, owns the property.
TAJ argued that the new lease arrangement will be advantageous to the Government as the cost per square footage is less than what is currently being paid in Mandeville.
It said the building is being retrofitted to provide expanded and improved services to central Jamaica to include larger capacity with seated service and queue management system for customers; environmentally friendly facility for electricity efficiency and lower daily maintenance; increased parking from 25 to 250 space; and expanded e-services such as a state-of-the-art e-filing facility.
The TAJ added that given the unique requirements of the revenue centre a number of preparations have to be made to be fully functional.
These include demolition works, sub-structure, structural steel framing, joinery, fixture and furnishing, sanitary fitting and plumbing, mechanical, electrical and plumbing, structured cabling and an air conditioning system.
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