The Minister for National Development, Jacquelin Dugasse, went to the National Assembly this week to “reveal” details of the Ile Aurore project. Ile Aurore is the man-made island opposite Anse Etoile on the
The figures about the potential revenues which will accrue to the Government from the l’Ile Aurore Project, as churned out by Dugasse to impress the members of the National Assembly, sounded staggering to the ears of the unwary, even in dollar terms. Except that, from the perspective of the opposition bench, there was a sense of deja-vue, after the
At that time, the predecessor of Dugasse, Joel Morgan, claimed that Government would be paid US$30,000,000 within five years of the signing of the agreement with the South African based developers, as part payment a total of US$ 75,000,000 payable over 99 years. Three years down the road no one knows how much the government has actually received from the developers. Like the
According to Dugasse, the Government has signed three agreements with the South African based property developers called Pinnacles Development for the development of l’Ile Aurore. One concerned a lease agreement for the existing island itself. The lease is for 99 years and the government will be paid a total sum of US$ 70,000,000 for the lease alone. This works out at US$ 125, 000 per square metre.
The total sum for the lease will be paid over a period of years not upfront. However, Dugasse seems confused as to when exactly the government is expected to receive the final payment. According to Dugasse Government received US$1,000,000 on the date of signing of the lease, as part of the agreement, which Dugasse said was singed on 19 September. The next instalment, some US$ 5,000,000 will be paid only after planning permission has been granted followed by be a grace period of three years. On the fourth year the first of three annual instalments of US$ 16,000,000 would be paid consecutively. That would be two years after the next presidential election would have been held.
The second agreement concerned a commitment by the developers to pay US$10,000,000 towards the cost of installing additional electricity generating capacity at the PUC power station to supply the island. Although the development will have its own water desalination plant, the developers have agreed to contribute US$1,000,000 towards the cost of linking the island to the existing mains supply. This is a very controversial arrangement since the east coast of Mahe already suffers from a water shortage as soon as the rain stops for a few weeks. Matters will get worse once the 2500 houses development on l’Ile Perseverance next door is completed together with the new sewerage treatment plant for the two islands is completed. Dugasse did not say who would finance the sewerage plant. It is assumed from his silence that it would be the government. The developers will also contribute US$1,000,000 towards the cost of constructing a highway stretching from the Maison du Peuple round about to la Retraite, presumably passing through both islands.
The third agreement which the government has signed with the developers is to make the government the manager of the dredging operation to reclaim an additional 65 acres from the sea. Just where this additional land will situate remains to be seen. Many fear it could only be situated on the reef which already protects the island, and therefore cause the destruction of this natural barrier against the open sea. This agreement Dugasse said, is a recognition of the expertise
But Minister Dugasse left the most sensational bit towards the end. The bottom line for
|
Month |
Jan |
Feb |
Mar |
Apr |
May |
June |
Jul |
|
SR mn |
80.5 |
67.6 |
88.2 |
70.7 |
73.0 |
79.1 |
86.0 |
|
US$ mn |
13.54 |
11.54 |
14.48 |
11.58 |
11.95 |
12.66 |
13.50 |
The foreign direct investment inflow from the project alone during construction phase is expected to be € 400,000,000 Dugasse said. 600, 000 tons of rocks will be used for bunding of the island costing the company an estimated US$ 20, 000, 000. What more, he said, there will be innumerable spin off benefits which will benefit car hire operators, shops, airlines and taxi operators.
The project, he said, is expected to be completed in 54 months after planning permission is granted. Interestingly enough, the Government expects the whole thing to be ready for the grand opening not later than the end of December 2011 or early 2012. Unfortunately, the next presidential election must be held before 27 July 2011.
What more, Dugasse said, the government estimates that it will collect a total revenue of US$ 500, 000, 000 in 2012, US$ 324, 000, 000 in 2013, and US$ 105, 000, 000 in 2014 from the project. Thereafter the government is expected to collect US$ 120, 000, 000 to US$ 130, 000, 000 each year thereafter. There will also be a “multiplier effect” and the country will get US$ 3,000,000 each time the government collects US$ 1, 000, 000. Fifty thousand more new tourists a year are expected to be attracted to
And there’s more. Dugasse also revealed that the government had done additional number crunching. The development will generate stamp duty and sanction fee at the rate of 10% every time a villa or condominium is sold. Altogether, the government expects to collect US$ 80, 000, 000 from the sale and re-sale of the villas and the condominiums. Just how one can estimate how many villas or condos will be resold is a mystery.
What more, under the Tourism Incentive Act the development will pay 15% business tax in excess of R.250,000. The company will also pay GOP for foreign workers and GST of 7% on goods and services sold. There will also be a casino which will pay SR 1,000,000 per year licensing fee, SR.500, 000 per year for each table and SR.3,000 per slot machine; all to be paid in foreign currency. One thousand workers are expected to work at Ile Aurore daily, while of them 300 to 400 are expected to be Seychellois.
Dugasse, however, somehow lost the plot in his enthusiasm. He said that the developers will be allowed 60% retention of their foreign currency earnings. This means that six years from now, when the project would have been completed the rupee will still not be fully convertible.
As the saying goes, if it sounds too good to be true, it usually is.