September 12, 2014
LIME building now in hands of NIS

The National Insurance Services (NIS) is seeing an increase in their income stream as a result of an $11.5 million asset that was recently transferred to them.{{more}}

This was revealed by Prime Minister Dr Ralph Gonsalves, as he commented on the state of the institution during a press conference on Tuesday.

Gonsalves explained that ownership of the LIME building at Halifax Street, Kingstown, which sits on over 12,000 square feet of government land, was recently transferred to the NIS by the National Properties Inc, which had a loan of over $40 million from the NIS.

“I suggested to National Properties — and they accepted the suggestion — that they transfer the LIME building to the NIS, so that the income stream for the NIS could be strengthened and the property added to the asset,” he said.

The Prime Minister noted that the LIME building earns the Government over $900,000 yearly from rent, between $78,000 and $79,000 a month.

“So, you can see that’s a good asset for NIS to have,” he said.

Also, Gonsalves explained that the National Properties Ltd was able to obtain the building because of the end of the 20-year lease of the land that the building sits on.

“That property land was leased over a 20-year agreement with LIME. The first 10 years, the NDP Government, the Government at the time, rented LIME the land at $2,000 a year. For the first 10 years, they earned $20,000. The second 10 years was $4,000 a year. So for 20 years, the Government of St Vincent and the Grenadines earned $60,000 from Cable and Wireless,” the Prime Minister said.

He stated that when the agreement came to an end, LIME wanted to continue the lease for the same rental rate.

“I say look, your lease has come to an end. And when you lease anything from us, from anybody, you put a building down. The law of the land is that when the lease comes to an end, if there is no renewal of the lease, the building belongs to the Government. So… the property there, which is $11.5 million, belongs to the Government. Therefore if you want to rent it, you pay rent on the basis of a property of $11.5 million,” Gonsalves explained.

The Prime Minister, who expressed his desire to look for ways to strengthen the NIS, disclosed that the building is available for sale to LIME, but until then, it is a good income stream for the National Insurance Service.

Recently, it was revealed that the Government will be servicing a $15 million debt to the NIS through a loan from the National Insurance Fund, which is expected to be paid over a 10-year period at a 4.5 per cent interest rate, using treasury notes.

Gonsalves pointed out that the increased income stream that was obtained by the transfer of the LIME building should dispel doubts that anyone may have regarding the Government’s interest in defending the NIS, particularly since everything in the NIS is government guaranteed.(BK)