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Estates Minister has ‘no concerns’ about putting loss-making properties on market

Government Estates Minister Michael Scott has no qualms about placing some $10 million of Government property in a soft real estate market.

And a timeline for commercialising the sea bed, first mooted in 1998, is dependent on private developers.

The Estates Ministry is expecting to bring in an extra $10 million in revenue by selling or leasing underutilised properties.

“I haven’t a concern about this,” he said. “One has to try options in this environment punishing as it is.”

He said that Government would be otherwise left with high maintenance costs for its underutilised properties.

Mr Scott noted that sub Post Offices across the Island represented loss leaders for the Government.

“New ways of dealing with that asset have to be considered.

“The Ministry of Finance is interested in creating fiscal space. The Government competes in this kind of climate with private sector in that way.

“But I think we contribute to the private sector’s real estate inventory if you provide an opportunity for whoever’s out there.”

Government has over 400 buildings, Mr Scott noted.

The Estates Ministry is also looking at commercialising Bermuda’s sea bed for extra revenue.

Mr Scott was reminded that the idea was mentioned in the Progressive Labour Party’s 1998 election platform and asked for an update and when the public should expect to see it become a reality.

“The mining of the sea bed initiative, exciting as it was then and as it remains, is at the instance of the private developers,” he said.

“Our facilitation has been to agree to Memorandums of Understanding for the analysis and assessment, including an expansion of the footprint that is to be looked at, on the sea bed.”

He would not say who the private developers are, only that they are Bermudians.

But he assured the media that the public would see progress within the medium term “provided that the developers begin to take steps.”

In his prepared remarks, Minister Scott said that his strategy was “to not have stranded assets that are costly to maintain but rather to use Government assets to hit achievable revenue returns”.

He said: “In my former capacity as Minister of Telecommunications, I acknowledged the potential connected with the exploitation of Bermuda space assets including orbital slots that remain available for economic exploitation within the satellite industry.

“The leasing of orbital space slots or rather, the sale of the ‘space real estate’ can generate upwards of many millions of dollars.

“Now under my current responsibilities for lands, commercial and residential buildings, the seabed and wealth under the seabed of Bermuda in the form of precious metal or mineral deposits, one can easily recognise the expanded compliment of Government assets.

“Assets deployed by way of lease of Government sites for development by private sector developers and licensing of exploitation rights of the seabed are each potential revenue sources and highly attractive ways to realise revenue streams.

“Specifically, license of fees and savings on rent in the long term create fiscal space.

“Further, supporting and driving entrepreneurship by rental or allowing business access to under utilised buildings within the Government inventory is yet another creative way to not only raise revenue but to drive entrepreneurship training and apprenticeships.”

Post-Budget Press Conference: Michael Scott, Minister of Government Estates & Information Services.(Photo by Akil Simmons) February 24, 2012

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Published March 02, 2012 at 1:00 am (Updated March 02, 2012 at 8:16 am)

Estates Minister has ‘no concerns’ about putting loss-making properties on market

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