BIDC owed $7.4m
COMPANIES HAVE chalked up $7.4 million in arrears of rent to the Barbados Investment & Development Corporation (BIDC).
Auditor General Leigh Trotman, in his recently released 2010 annual report, lists this and the underinsuring of commercial buildings among the major problems facing the agency.
The BIDC had made some headway in efforts to get its money, but last year arrears for factory space rental still increased by $827 735 to $7 451 268 from $6 623 533 in 2009, according to the report.
The rent of 51 per cent of the corporation’s tenants was said to be in arrears.
The BIDC manages 12 industrial estates comprising 70 commercial buildings. In addition, there are eight buildings which house 27 craft shops and a restaurant.
The estates are on lands totalling 159.6 acres and serve as a base of operations for many locally and foreign-owned manufacturing companies and service-providers.I
n a response carried by the report, the BIDC said that between April, 2009, and March, 2010, it had collected $4.7 million in arrears.
However, it admitted that its hands were tied somewhat because during the financial year 2010 “a ministerial directive, approved by the board, imposed a stay on [issuing] Notices To Quit (NTQs)”.
The reprieve was influenced by the harsh economic climate with which most tenants were faced, the BIDC explained.
Trotman was also concerned about the finding that the BIDC’s commercial buildings “were insured at a percentage of the replacement cost”, running as low as 40 per cent.“
BIDC indicated it is unable to insure its buildings at the full replacement cost because of financial constraints, including those brought on by its inability to collect some of the rent from tenants,” the report noted.
“Under-insuring buildings has placed the assets of the corporation at risk of incurring significant losses due to disasters such as fires. This could affect the corporation’s efforts to repair or replace damaged buildings.”
The report included figures showing that damages recovered from insurance on three Grazettes and Spring Garden, St Michael buildings hit by fire between 2005 and 2010 ranged from 60 per cent to 30 per cent of what it would cost to repair or replace them.