Eden Island On Publicity Juggling Act
Eden Island Development is on a timely as usual, publicity campaign to polish up its image as a key player in Seychelles economic development and paint a soft image of the brand to the local public and internationally any one that would consider having an interest in Eden Island.
The Eden Island News “The Inside Story”
SBC interviewed Mr. Heeger on Friday night and gave him access to the country. No counter rebuttal to what Mr. Heeger proposed was offered.
The Eden Island News, “The Inside Story” has been released and placed at the Seychelles international airport. It paints a sympathetic picture of the Eden Island project. The front page titled, “In the Beginning”, promoter Mr. Graig Heeger tells us about his frolics in Baie Lazare 20 years ago and the beginnings of Eden Island as a project conception in 2002.
If you read the newsletter with a naked, unassuming eye, you would not think for a moment, Mr. Heeger was making a pitch to become a Citizen of Seychelles or he is doing a fine effort at spinning the best possible story for Eden Island, to keep it alive, in real bad times for the entire world.
Fantastic Spin For Fantastically Bad Times
As things get worse, the spin gets more fantastic and the inference drawn is that Eden Island has not been touched by the world financial crisis. Mr. Heeger needs to spin to survive.
We need to see the spin to survive the same downturn that seemingly has not touched Mr. Heeger and company, but touches us and the World.
Where Is The Project Memorandum For Eden Island?
Mr. Heeger was polite enough to call me one day in early June 2010 for a meeting to address issues I had with the Eden Island Development project which I addressed in Two (2) articles in April 2010 to break open the issue publically, as the Opposition in Seychelles led by Mr. Ramkalawan has remained silent for almost Ten (10) years on the matter.
These issues are principally Two (2) issues: 1. Residency indemnity from citizenship application for all buyers to Eden Island; (2). The unauthorized apartment pool and defacto hotel operation Eden Island has been operating that is not according to the Project Memorandum of Eden Island, submitted to Government of Seychelles.
Mr. Heeger advised me in the meeting that he would have his financial controller Mr. Smith, get in touch with me and provide me with a CD of the entire project. Mr. Smith contacted me by e-mail once, and I replied, but never received an answer, waiting for the CD since June 2010, patiently.
Between serious people, respect of one’s word is paramount to handling matters privately. If matters cannot be dealt with privately, we go public. A simple, no fuss, no nonsense approach to life. This is part of our culture, in case Mr. Heeger did not know.
What I Think I Know
As I understand it, Eden Island has obtained approval to build a Sixty (60) room hotel. But it has not built that project yet, being tied down with the economic down turn.
Eden Management in the economic down turn, was created to generate as much cash as possible, handling the apartments sold to buyer that reside overseas to pump back into the operating costs of Eden Island Development. This is done through service fees and commission arrangements. Hence the management company is also a defacto Tour operator or DMC. They do it all.
The management company rents out the apartments to tourists through the internet and other inquiries system. They even Google self catering apartments in Seychelles, undercutting the entire Tourism infrastructure of Seychelles mercilessly. Eden Island is advertised on per day basis by owners, and the rooms go cheap, under Euro 50.00 at times. Trip Advisor, a Tourist portal has Eden Island present.
For his part, Mr. Heeger claims that he competes with Five (5) star hotels only. This is dishonest and nothing more than his spin on the issue, to keep our entire community off his back, as he undercuts the entire Tourism market and delivers an unfinished product, that undermines the “Seychelles Brand”, in direct contradiction of current policies.
This is highly counter cultural in Seychelles, which is a micro state with limited resources, including electricity grids and water supply. The practice is not even free market sensitive, as Eden has been given numerous concessions in the first place to compete unfairly with any other project, and now it cannot survive with all that help on the merits of its project memorandum.
On arrival guests arrive on Eden Island and are golf carted to their apartments. It is a defacto hotel operation, but there is no hotel in place. Sales centre for villas and apartments doubles as a reception lounge, it is also an access to the Bravo bar and restaurant. This can hardly be considered a Five Star reception.
Vijay Takes Part of Eden
Guests today, are arriving to a construction site, boat yard, boat slip, and a commercial centre under full construction, still at foundational stage, owned now by Vijay Patel, multi millionaire contractor, who was owed money by Eden Island, and the commercial centre property was hocked in exchange of payment in part due to Mr. Patel. This was confirmed to me by Mr. Heeger, though reluctantly, in the June 2010 meeting.
Mr. Patel is an engineer by education, but I would guess, an excellent poker player if he has ever engaged in such past time.
Hotel Operation Not according To STB Policy
No hotel in Seychelles can operate until the entire project is completed according to Seychelles Tourism Board (STB). All local Seychellois business ventures have been squeezed to death over this requirement. If Seychellois can meet it, I do not see why Eden Island cannot, or why it must be an exception to the rule. The exception to the rule has been projects of family of the ruling communist party, such as Ephelia Hotel and Farquar Hotel.
Juggling A Deflating Ball
The Council of Ministers are contemplating what to do with Eden Island. In order to operate as a hotel, it will have to seek a change of use for each apartment. It is a dangerous precedence and will result in social economic turmoil if it happens.
Mr. Heeger is counting on a change of use to be granted, in order that his project does not go bankrupt.
Behind the apartment pool hotel scheme is the sales pitch Mr. Heeger’s Eden Island team tosses out to bright eyed potential buyers of villas and apartments.
If Mr. Heeger is honourable in his efforts as he says he is, it is time to present the project sales department of Eden Island with a viable sales pitch to the world that will be accepted here, in Seychelles. Failing that, this project will go belly up no matter what the Council of Ministers decide.
A Good Pitch is in The Wrist, Not The Arm
If Mr. Heeger needs help on what sales pitch he can pitch, I can lend him some free advice, as it seems he will need it.
In the post financial bubble world economy Eden Island has not been able to stick to its original project memorandum, which I understand focused on selling semi retirement homes to the well heeled of the world.
Today, the well heeled need to be able to rent out their purchase, to pay the mortgage, unlike the bubble days gone by, when they would not have a second thought over a mortgage on some artificial island in the Indian Ocean.
A Market Cannot legislate Business Success of a Bad Idea
We must live by the rules of fair play in the market, and not help along a sickly player, especially in a micro state as Seychelles. The more you help a bad idea, the quicker your entire economy will suffer from it.
A good Bubble Era idea may not be a good post Bubble-Burst Era idea. Eden fits this glove tightly.
Lehman Brothers taught us the lesson of helping a sickly player in the financial economy.
The player is sickly because its ideas were not thought out carefully, with due regard for market analysis and social economic digestive capacity of Eden Island in a downturn. Mr. Heeger and his partners thought in 2002 the sky was the limit like the men of Lehman Brothers crafting a financial Ponzi scheme. The Lehman Brothers men, never thought the sky would drop on them, it never happened in their lifetime, so they thought it never would.
It only happened in the Great Depression of 1934, before the Lehman Brothers men were born and Mr. Heeger. I was not born either, but I follow the economic financial cycles and do not ignore the historical lessons from them.
Do Not Throw Caution Into The Wind
In Seychelles, we must not fall into this trap with Eden Island. We Seychellois, be it the Tourism Trade, the population, the Consul of Ministers, must open our eyes fast. The financial future of this country, and the opportunity for recovery from a national bankruptcy announced in October 2008, now sits on a pendulum.
Eden Island cannot carve out, commercial retail segment, rent a car business, yacht charter, yacht management, real estate sales, food and beverage DMC, taxi service, landscaping business, all under one roof. If allowed a free for all, we will no longer have a viable population in this Bear Market. What will we do with the Tourism Infrastructure created over the last 34 years? Let it fall?
What message will that send to commercial banks in Seychelles who we need to co opt as partners to insure a recovery?
What If We Spit In The Wind Over Eden Island?
Investors to Eden must be liquid and not hang their investment on a prayer that they can indefinitely bank on a hotel apartment pool to pay the mortgage and guarantee the investment.
In this day and age, there are no guarantees for all of us. We are in an age of economic turmoil and stagnant downturn. The time to fake figures and statistics are over. We must face our reality for what it is.
If we over assist Eden Island, it is big enough to take us all with it, as it deflates. Can you imagine for one moment if Eden Island grew to become 25% of our GDP? The Seychelles Brand would have become a hostage of an artificial island? All our other islands would be turned into national parks, and our people as wardens.
In its pitch Eden Island claims 4%GDP and 9% FDI. As the pie shrinks, its percentages will increase if allowed to. It should not. We must let Eden Island stand on the merits and challenges of its project memorandum and its promise to us the People of Seychelles, that is: a semi retirement home community, that would increase the economic pie, not take what we were already doing, and take credit for it. Eden Island needs to go do some more homework to sell its product successfully, instead, of sponging off the Tourism Industry of Seychelles.
Seychelles does not need to be turned into the Kruger Park; we must stand strong and draw the line.
If we fail to unite on the Eden Island issue, chaos will reign in our Tourism Industry for years to come. Seychelles will lose hard earned, Euros and Dollars through an increase in financial flight of money earned in Seychelles.
As PL communist government helps Eden Island along, it will weaken the entire market and entire social economic strata of Seychelles. PL communist government must not do this out of favouritism and corruption. It is a bad precedence, and will be bad for Seychelles’ future and the “Seychelles Brand”.
What Will Happen When Ile Aurore Gets Up and Running?
Ile Aurore will be a $450 Million project with hotels, casino, apartment, villas and so forth. What will happen to Eden Island investments when that project gets up and running? Will we, as a micro state be tasked to provide subvention assistance to Eden Island and provide it with more cozy arrangements to keep it going? If yes, I would seriously begin to ask who is really behind Eden Island.
Living With A Smaller Pie
Fundamentally, what is happening at Eden Island today is that it is not growing the economic pie in Seychelles through a new industry, as it said it would, with the apartment pool defacto hotel operation, it is only taking from an existing market and industry in so far as Tourist and Visitors are concerned.
In addition, these guests that come in groups of 10 or 15 at a time and packs it into the artificial island take valuable limited seats on in bound planes that could be taken up by more lucrative paying guests Seychelles is use to receiving. They cram into bareboat yachts and poke about Praslin and La Digue, without paying room nights, and they destroy our coral formations with indiscriminate anchoring practice. This hurts the fish trap catch, as well as our eco tourist marketing efforts. Yacht charter revenues find its way overseas as well, like apartment revenues. Another hole in the financial ship of state taking water that needs to be plugged.
Why do we have more arrivals but less money?
The Money Is Banked Outside of Seychelles
Eden likes to play about with statistics to make their point. So do I. Our arrivals of visitors is 12% above last year’s figures, but our receivables in Tourism is -25% second year running. This is an alarming figure and provides little or no playing room for Eden Island types of schemes.
The reduction in receivables is due in part to discounting, but also in part to the prolific black market of guests houses and the bonkers practice of Government of Seychelles, allowing projects that permit funds to be banked overseas, which is fraudulent in itself.
In my view, Eden would fall under this as well. It is a recipe for disaster for Seychelles, not during the World financial bubble when liquidity fuelled spend- free habits, but today, during the post bubble economy and post financial crisis, where we are grappling over lack of liquidity, and lack of bank access. Hence no growth potential.
USA is facing the possibility of a double dip recession. With that, Europe may follow if USA double dips. If that happens, Eden Island will go into the fish trap business, to keep the lights on. Mr. Heeger knows that, now so must we.
Banks that financed Eden Island purchases are mostly overseas. Hence, it is likely that many buyers will use income generated from apartment rental, to pay down overseas bank loan debts. The bottom line is that most of the receivables will go back over seas and Seychelles will benefit very little in real terms to such an arrangement if legitimized by Government of Seychelles for now.
A Request To Council of Ministers
Now simply call Afif at Finance and ask him to do the numbers of renting out over 500 units at Eden Island on 75% occupancy. Calculate the tax and then calculate the revenue being banked overseas. Good. Then ask Afif to forecast, a Ten (10) Year economic downturn globally with reduced arrivals and reduced spending power, factor in some variables, and ask Afif for his take on what Eden Island will do with the Seychelles Tourism Industry and the “Seychelles Brand”, in Ten (10) years.
Remember, your decision is being made today, but your impact of the decision will be for 25 years or more.
Do not forget that one rule you round table people like to forget. Act now, but think ahead: forecast intelligently, look to the future, with knowledge of your reality, stop dreaming.
The legality of such legitimization of a change of use, that is not in the original project memorandum will pose legal issues, that could tie up Eden Island, Eden Management and Government of Seychelles in court battles for years to come. I can easily see boat charters, DMC’s, hotels restaurants doing a class action suit over the matter.
Check The Water Levels At Resevoirs
Beyond all these ideas, there is a basic point that Eden Island missed out on and so did the Government of Seychelles. We do not even have enough reservoir water capacity to entertain an Eden Island project. Who were we trying to fool all along? Five hundred villas will go up but not one litre of extra catchments?
During the past three (3) months I have visited Eden Island, and like many places in Central Mahe, the water was shutdown throughout the day, coming on only at 5.00pm. There is nothing Five (5) star about having no water.
What makes all the brains behind all the hoopla and spin effort think that projects can work without water catchments in place?
An Appeal To Mr. Heeger
In closing, I ask Mr Heeger to withdraw his apartment pool scheme to rent to short term visitors. Rent the houses and apartments out on a month to month basis and term tenancy to find a happy medium for everyone.
Personal enrichment at the cost of other people’s well being, is not a well regarded trait in our culture, which you claim to have become fond of. Do the right thing; you will be respected for it.
Publically agree to this request, and then privately agree to it with me. Secondly, don’t forget to agree to the indemnity to application of residents, for citizenship to Seychelles in the future.
Our citizenship Mr. Heeger, is not for sale, please advise your buyers as I have asked privately.
With that, I will stop writing about Eden Island, you can get on with your business and I can get on with mine.
Sesel Pou Seselwa!
May God Bless All Freedom Loving Seychellois!
Source: STAR 9-4-10