EDITORIAL - Of OUR relocation and urban renewal

WE HAVE noted the intention of the Office of Utilities Regulation (OUR) to purchase an "appropriately sized and located office building" to allow it to relocate from rented premises at the PCJ building in New Kingston.

The OUR, prima facie, has made a reasonable case for the plan: it needs more office space and it wants to escape high rent. The second reason, for us, is more important.

The OUR projects that for the coming fiscal year, it will pay J$21.3 million in rent, a hike of three per cent over the amount for 2011-2012. That is a fair bit of money. But more important, the OUR feels that if it bought its own building, removing its rental cost, the property would pay for itself within five years.

This is where the OUR and those who lead the institution need to provide its stakeholders, especially the public, further and better particulars so that they can analyse the proposal and determine whether this will be the best use of their money. The latter point is significant.

For notwithstanding the fact that the OUR's budget (J$532 million for 2012-13) is ostensibly financed by contributions from utility companies, it is the customers of these companies who pay. Indeed, we have in the past suggested that this transfer of the utilities to the regulator should be reflected on the bills of customers so that no party, in particular the OUR, is in doubt about whose interests it has a responsibility to protect.

The issue here is that the OUR is projecting to spend between J$50 million and J$60 million for the purchase, but has not indicated whether this is a realistic sum and if this would be the total expenditure. Nor is there any clarity on how the OUR proposal fits within the Government's plans for urban renewal and the location of its agencies.

Catching uptown fever

We raise this in the context of the past irresponsible behaviour of several government institutions and agencies, especially in their maddeningly rude rush, at significant cost, from downtown to the uptown New Kingston area.

There was, for example, the Planning Institute of Jamaica which, in the first half of the 2000s, spent more than J$200 million to buy the building on Oxford Road that previously housed the consular offices of the US Embassy. In that transaction, the PIOJ crowded out a private-sector competitor. It, in part, defended its action with the argument that it used its own money for the purchase, rather than relying on subventions from the national Budget.

The PIOJ paved the way for the Export-Import Bank to purchase property in New Kingston, which was followed, among others, by the commerce and industry ministry, which bolted from downtown in defiance of an order of the then prime minister, Bruce Golding, for government agencies in the old section of the capital to stay. These actions, of course, contributed to the further decay of downtown, making its renewal more difficult.

If the OUR must move, we would prefer that it find a home downtown, perhaps in the tens of thousands of square feet of less expensive empty office space owned by the Urban Development Corporation. It must show, too, that the people's money is being wisely spent.

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