The Government has moved to convert buildings it currently leases from Provincial Council Companies under a long-standing Build, Operate and Transfer (BOT) arrangement into a Build, Operate and Own (BOO) model, Cabinet has endorsed. The change, announced after a review of the BOT scheme, will see Provincial Council Companies retain long-term ownership of commercial properties while the Government stays on as a tenant under newly updated lease agreements.
The BOT model was introduced in the late 1990s to encourage Provincial Council Companies to invest in property development and to boost iTaukei participation in commercial enterprise. Under that arrangement, some projects ultimately transferred to government control after a defined operating period. The shift to BOO reverses that trajectory: ownership will remain with the landowning provincial entities, aiming to consolidate indigenous participation in property ownership and income streams from those assets.
As part of the policy change, rental rates for government tenancy will be revised to reflect current market valuations, the Government said. Updated leases are to be enacted to formalise the new ownership structure and rental terms. Officials framed the move as a means to improve the financial sustainability of Provincial Council Companies while preserving public access to the buildings for ongoing delivery of government services.
Cabinet’s endorsement follows a formal review of the old BOT arrangements. Government spokespeople said the BOO model is intended to give Provincial Council Companies steady, long-term asset bases and rental income, strengthening their capacity to participate in commercial property markets and to better capture returns for their provinces and iTaukei beneficiaries.
The timing of the change coincides with wider government attention on fiscal management and revenue goals. In recent months the Government has emphasised stronger tax collection and a Medium Term Debt Management Strategy amid a rising national debt burden. While the BOO shift transfers ownership and potential capital upside to provincial companies, it also introduces a requirement for the Government to pay market rents—an adjustment that will flow into operating budgets rather than capital accounts.
Government officials have indicated that ensuring public services continue to be provided from the affected premises is a priority, and that lease revisions will be structured to balance the financial needs of provincial owners with uninterrupted use of buildings for health, administrative and other public functions. Details on the implementation timeline, the number and location of properties affected, and the precise mechanics of lease renegotiation were not disclosed in the Cabinet announcement.
The policy marks a substantive change in how state-province property relationships are structured, signalling greater emphasis on empowering Provincial Council Companies as owners rather than builders who transfer assets to the state. The impact of the shift will be watched closely by provincial leaders, public-service agencies and treasury officials as lease negotiations proceed and the new ownership model is rolled out.
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