NHC and PHD to Sign New Lease Agreement for State Land Occupied by Processing Plant

The National Housing Corporation (NHC) and the privately-owned Pine Hill Dairy (PHD) are expected to sign a new lease agreement in a matter of weeks for the State land the processing plant currently occupies.

This was announced on Tuesday by Country Manager of Banks Holdings Limited (BHL) for Barbados, St Vincent and Dominica Shafia London, in response to a story published on Monday by Barbados TODAY which stated that the government was asking the company to pay commercial rent for the state land it has been occupying since 1966. BHL acquired PHD in 1997.

As was reported, under a 50-year lease arrangement which has now expired, the PHD had been paying the government a rate of $100 per year. NHC General Manager Ian Gill confirmed in an interview with Barbados TODAY that the corporation was in negotiations with the company to increase the rate, although he declined to go into details.

In placing the PHD’s perspective on record, London contended that history offered important context on this matter.

“The longstanding lease arrangement with the NHC dates from the 1960s under the mandate of the Government to establish and support a formal and competitive dairy industry in Barbados. In 1966, when the Barbados Dairy Industries Limited (BDIL) was established (with the Government of Barbados as a 25 per cent shareholder) there was an agreement that the government would offer support for the fledgling industry by permitting the management team of the day to construct a

dairy on Crown Lands on a preferential 50-year lease,” she explained.

“Under those original terms, the responsibility of BDIL as a tenant went beyond those of a standard lease. For instance, at the expiration of the lease, ownership of the building constructed by the company reverts to the Government of Barbados. Under standard tenancy arrangements, maintenance cost is covered by the landlord and real property owned by the government is exempt from the payment of tax under Sections 24 of the Housing Act Cap 226 and 8(g) of the Land Tax Act Cap 78A of the Laws of Barbados.

“These are costs incurred by BDIL, which are in the region of BBD$1.1 million per year. The period of that type of lease has elapsed,” asserted the spokesman for PHD’s parent company.

London explained that the two parties were now considering a different type of lease contract to what was in operation during the past half-century.

“We are working with the management of the NHC on a more traditional lease arrangement that is beneficial to both parties. Negotiations are going well, and we are hopeful of signing off on a new lease arrangement in the coming weeks,” the senior official disclosed.

When Pine Hill Dairy started operations in 1966, it was partly owned by the government, under the leadership of the Errol Barrow-led Democratic Labour Party (DLP) which entered into a joint venture with 360 Dairy Farmers, the New Zealand Dairy Board and Northern Foods Ltd. of the United Kingdom, with each entity receiving 25 per cent of the shares. (EJ)