Land grab – investment or speculation?

  • 8th April 2021
  • 2021
  • // Display comment count + link

Such deals tantamount to land speculation, as in the Raiwaqa case where a lease was acquired on highly favorable terms and five years later sold for a hefty $19million.

Abandoned site on Lomolomo Beach, Lautoka. No sign of the $500 million resort promised in 2015.

Last week the Chinese Ambassador Qian Bo spoke of the need for Fiji to make land easily available for development purposes, if Fiji wanted to combat poverty.

He was speaking at a ceremony to mark China’s success in addressing poverty in the past 8 years with close to 100 million rural people taken out of the poverty trap.

He acknowledged that Fiji’s cultural traditions were different, but suggested we consider “…lending land to businesses and government for development to ensure land is utilized fully and can return a profit.”

Ambassador Bo’s remarks reminded me of the vast acres of our land that have been made available to Chinese entrepreneurs for commercial development over the years by the Bainimarama government – but continue to lie idle.

Most of these are prime State lands, often beach front real estates that we were told would be converted into highly ambitious multi-million dollar resorts and other commercial ventures, and create thousands of jobs for our people.

There are numerous examples of such land lying undeveloped all over the island, abandoned after some initial earthworks or fencing off. None of the lofty, pie in the sky dreams has materialized in the past 12 years, and it is doubtful whether they will. Were these genuine investors or just speculators?

Golden Bay International Resort & Spa- Lomolomo Beach

Let’s start with the promise of a $500m resort on the beautiful Lomolomo Beach, Lautoka. The ground breaking ceremony for this dream project, billed as the biggest single such development in the South Pacific, took place on 30 May 2015 and was officiated by Lautoka City Council CEO Jone Nakauvadra.  Also present was a huge contingent of businessmen from China, here to attend the Fiji-China Business Council meeting.

The grand project was envisaged as a hotel/ apartment/villa complex with an infinity swimming pool on the fourth floor and private balconies with its own gardens etc. It was to sit on 30 acres of land with a beach frontage of 1.3kms.

The investor was New Era Development Ltd, a company registered in Fiji in 2014. Some 50% of the investment in the project was to come from the Guangdong Province of China, it was announced.

At the launch, New Era chairman Deng Peng said construction would take three years to complete and once fully operational would generate USD$200 million revenue with an estimated 100 international conferences being hosted in the venue per year and more than 3000 business and tourism people coming to the Fijian shores.

However, nothing happened for almost four years. Then in March 2019, a representative of the company gave a presentation to the Nadi Chamber of Commerce and announced that work on the site would begin in a few months and was expected to be completed by 2022. She said 50% of its staff would be from China. Today the site stands abandoned with a couple of buildings for a roofing iron project that also did not get off the ground.

Wyndham Silkroad Ark Resort

This was another $500 million vision of a luxurious resort promoted as “one of the largest and most high profile property developments in Fiji”. Sited near the Komave Village, Coral Coast, it was to span 165 acres with a 1.3km coastline, 360 guest rooms and a 1000-seat convention centre.

The groundbreaking ceremony for the $500m scheme took place on 30 August 2016, officiated by then tourism minister Faiyaz Siddiq Koya who hailed it as a huge vote of confidence in the national economy, adding: “I understand that Guangdong SilkRoad Ark Investment Company Limited has a number of plans in the pipeline to contribute to the development of Komave Village through the creation of employment and new sources of income,” he said.

Fiji Hotel and Tourism Association President, the late Dixon Seeto, assured everyone that proper due diligence had been carried out on the venture by Investment Fiji and the Ministry of Industry, Trade and Tourism.

He was impressed that nine company representatives had flown in on a private jet to attend the ground breaking ceremony – signifying they had the financial strength to back the project.

“If they didn’t have that kind of backing and financial means, you would perhaps be a bit more skeptical. From what I can see today, I am certain it will take off,” Mr Seeto had said.

Work on the luxury project was expected to be completed by the end of 2018.  But some five years after the ground breaking ceremony, there is still no sign of any development on the abandoned site. A corrugated iron fence that sealed off the property on both sides of Queens Highway has disappeared and Komave Villagers are left questioning what is going on, and whether the benefits promised them will ever be realised.

Raiwaqa’s $500m Satellite City project 

 A  grandiose $500m venture promised for Raiwaqa in Suva turned out to be another fly by night scheme that never saw the dawn of a promised new era for the capital city.

In September 2011, Shi Yubao, CEO of Handen Golden Century Real Estate in China flew to Fiji in a private jet to sign a deal with Prime Minister Voreqe Bainimarama for the development of some 17 acres of State land in Raiwaqa into a state of the art satellite city with upmarket residential and commercial complex, shopping and entertainment facilities.

Shi expressed his gratitude to the government for “moving fast to facilitate his investment” while then Solicitor General Christopher Pryde enthused about the project as “a significant boost to the Fijian economy”.

A locally registered surrogate company, Gold Century Group Ltd, was formed to obtain a development lease on the Raiwaqa land, with Shi Yubao as its principal shareholder (70%).

After some minor initial earthworks, work on the site stopped. For almost five years, the project lay in the doldrums. In 2015, overseas reports claimed Shi Yubao’s company had collapsed in Handan, China in 2014 owing USD506 million to thousands of people from whom money had been raised illegally to fund Golden Century’s development projects. Yubao himself was on the run from the Chinese authorities.

Here in Fiji, the authorities refused to respond to questions raised by the Fiji Labour Party as to why prime State land was leased to the company without proper procedures being followed and expressions of interest being called. Questions sent to the Minister as well as the Permanent Secretary for Lands, were never answered.

Obviously no proper due diligence was carried out on Gold Century and its shareholders. Local procedures were flouted to allow the company to develop the tiritiri site in Raiwaqa with adverse environmental impact on the surrounding area.

Raiwaqa windfall

The lease on the Raiwaqa land should have been cancelled and government should have repossessed the land when the company failed to meet its contractual obligations. Why was this not done?

Instead, Gold Century, a paper company, was allowed to make a windfall when it sold the lot for a cool $19m to a prominent local retail developer in 2015. I understand it has since been sold to yet another local developer for a profit.

The once vaunted scheme for a Chinese industrial park in Lobau, Navua, is another instance where, following a much hyped ground breaking ceremony by PM Bainimarama and AG Khaiyum several years ago, the land has been left idle with no development.

Case of  Malolo Island

The controversial Freesoul Real Estate Development case on Malolo Island by a company that has close business interests with China, had received international attention.

The developers had engaged in illegal works on the site, in breach of Fiji’s environmental laws, had defied several stop work orders and had caused substantial damage to the environment, particularly the reef on the foreshore.

Then there is the China Railway Engineering Group’s (CREG) development at Bayview Heights in Suva on land that had been earmarked for civic development and belonged to the RFMF. CREG was allowed to use it as a works depot and proceeded to construct a commercial building on it, without getting approval for the building and engineering plans.

Despite letters by FLP to the SCC, the Lands Department, Police and FICAC no action was taken to stop the development. The land had been leased to CREG for a pittance, in breach of proper procedures on “orders from above”, I was told  – a  clear case of abuse of authority.

Speculators?

It is time to ask what is happening? A common thread runs through most of the major deals – the magical figure for the proposed ventures is $500m which in itself is suspicious. The grandiose schemes are announced with a lot of fanfare with ‘investors’ making impressive arrivals in private jets but then all goes quiet and Fiji ends up looking like a fool.

Such deals tantamount to land speculation, as in the Raiwaqa case where a lease was acquired on highly favorable terms and five years later sold for a hefty $19million.

They lack accountability and transparency. Regulations and proper procedures are flouted to accommodate the so-called ‘entrepreneurs’ and when they fail to deliver on their lofty promises, no explanation is forthcoming.

Finally, I find it unacceptable that prime land is made readily available at a pittance to foreign ‘investors’ while our low income earners are forced to pay hefty prices for land to build homes. Where is the fairness?

Mahendra P Chaudhry
Leader, FLP