A second government department has rented office space from a company linked to a Progressive Labour Party MP – at a cost of almost $800,000 a year.

The Department of Child and Family Services has signed a five-year contract with F&E Holdings, where former PLP minister Zane DeSilva is a director, to rent several floors in a Front Street, Hamilton office building – which already houses the Department of Customs.

Mr DeSilva, a former PLP Cabinet minister, his wife, Joanne, and his two children, Zane Jr and Zara Harper, are directors of F&E Holdings.

The contract details, published in the Official Gazette under Public Access to Information regulations, started last September and will run to 2025 at a cost of $788,079 a year.

The DCFS was earlier based at Milner House on Victoria Street, also Hamilton.

It is understood that the rent in the Victoria Street building was less than $300,000 a year.

Sources claimed that DCFS staff were reluctant to move, but were ordered to do so when the Milner House lease expired last year.

The department will now share space with Customs, which moved into the building two years ago.

Mr DeSilva earlier declared his interest in F&E Holdings.

It is recorded in the latest Parliamentary Register of Interest that he is a director of the company and has shares in it.

The register of interest questionnaire also asked MPs to provide details of their involvement in and the value of any company they are involved with.

Mr DeSilva did not give a response to the question.

A real estate expert with knowledge of the negotiations claimed the relocation was not value for money.

The source, who asked not be named, said: "That annual rental value seems pretty damn high – it's scary.

"It's also a lot more than the department was paying when it was in its previous offices – there's no way they were paying anywhere near that before.

Another real estate agent agreed and said the deal was “disgusting”.

Mr DeSilva did not respond to several requests for comment yesterday.

Voicemail messages detailing the reason for the inquiry were not answered.

But Scott Pearman, the Shadow Minister of Legal Affairs, said the deal was "concerning" and asked the Government to clarify the circumstances behind the move.

He added: “It is always a concern when a member of the Government, or a former member of the Government, receives a financial benefit from a Government contract.”

Mr Pearman said: "No doubt former minister Mr De Silva will wish to put the public’s mind at ease by disclosing in full why the Department of Child and Family Services was moved to a building he owns, either in full or in part, through a company.

"Mr De Silva will, of course, wish to make clear to the public who in the Government was informed of his ownership of 131 Front Street.“

Mr Pearman asked: “When and how was formal disclosure of his interest made to the Government? And what formal consideration occurred to enable MP DeSilva to benefit financially from a lucrative government contract?”

"In addition the Minister of Works and Engineering, Lieutenant-Colonel David Burch, will wish to explain how this decision was reached, who took the decision, and if this was the best use of the public’s money.”

The Royal Gazette last week e-mailed a list of questions to the Government's Department of Information Services about the property deal.

No response was received by press time last night.