Prime Minister Hon. Peter O’Neill has written to Public Service Minister to make efforts to save the K200 million wasted on Government office rentals. Prime Minister O’Neill also made recommendations for an audit into the operations and management and a restructure of office leases. Prime Minister O’Neill in his letter said "current the land lease arrangements are totally in favor of the landlords and rates are far too excessive. As discussed with you K200 million a year is significant costs to the State and it is important that the government continues to reduce the cost by building new office complexes and proper management of these leases by ensuring the lease rates are consistent with the real estate market and Lease Agreements allow for review of the rental on a periodic basis.” Prime Minister O’Neill stated in his letter on November 18. “The current lease agreements are totally in favour of the landlords, which if challenge in courts, will surely be nullified. The Prime Minister also stated that there is inconsistency in the lease rates applied in the properties and in many instances, the rates are far too excessive for properties outside of Port Moresby town, which contributes to soaring increase in the budget for office leases every year. Prime Minister O’Neill also made strong recommendations to be considered by Sir Puka Temu, who is the Public Services Minister. The recommendations included the following:
- The current office lease committee to be restructured to include Chief Secretary as chairman, secretaries of DPM, Finance, Lands and State Solicitor; - An independent audit investigation to be immediately conducted into the operation and management of the office lease; - All future office leases to be obtained under the Financial Management Act as it involves procurement of services (public tender) where public finance is involved, and; - The management of office leases should be outsourced to the private sector in the future. “We cannot continue to operate or maintain the same status quo, which is clearly an overly expensive exercise and unsustainable operation,” he said. “Budget outlay of K200 million a year is a lot of money and money which we can save to fund essential services for our people. I am sure with the above measures in place, savings will be realized over time.” Comments are closed.
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