…Dr Luncheon says he made a blunder
The Guyana Revenue Authority (GRA) is not paying $10.5 million a month
to rent the building on Camp Street, Georgetown for its headquarters. The building was constructed as the headquarters of the failed insurance giant CLICO.
The building was acquired for $600M by the National Insurance Scheme (NIS) when CLICO was liquated.
Dr Luncheon yesterday said that the rental fee has not yet been decided on although a rental agreement has been drawn up. The Head of the Presidential Secretariat indicated that the rental could be 10 per cent of the acquisition cost of the building. This adds up to $60 million annually, but Dr Luncheon did not want to get into a discussion about the actual numbers.
The GRA, Dr Luncheon stated, is spending $200M to customize the building for its use.
NIS had invested some $6B in CLICO. That money was all but lost when CLICO collapsed.
The local CLICO went into liquidation. The purchase of the Camp Street building is part of the liquidation process.
Cabinet has since approved $227.1M for the completion and modification of the CLICO building on Camp Street.
“Indeed that $600M is used to offset some of the $5B that is still outstanding for NIS. The funding that has been identified in the award when Cabinet granted its no objections, those funds are being invested by the new tenant (GRA) to reconfigure the building and particularly its electrical, clean power and a suitable environment for the conduct of GRA business as opposed to what it was before for insurance business,” Dr Luncheon stated last week.
Asked if the decision by GRA not to pay the $10.5M per month meant that the rental arrangement was off, Dr Luncheon said that it is a done deal. He said that his announcement of the inflated rent might have torpedoed the agreement. However, he said that the rental arrangement was a done deal.
The property at lots 200 and 201 Camp Street with a size of 36,863 square feet was valued between $1.7B and $1.8B by the valuator contracted by the insurance company, while the government valuator placed it at $1.316B, a difference of $400M.
Liabilities for CLICO were in entities such as the NIS, GFC, GuyOil, and the Dependants’ Pension Fund.
NIS had acquired the CLICO building in Camp Street and holds it as a long term investment.
The Bank of Guyana has been appointed liquidator and is seeking to increase the liability of the failed insurance company by raising more money from activities such as the sale of the company’s assets as well as from taking legal action against BOSAI, CLICO (Bahamas) and Caribbean Resources Limited.
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