19 Aug 2013

Vanuatu watchdog urges clarity on airport deal

7:13 pm on 19 August 2013

The anti-corruption watch-dog Transparency International Vanuatu says the government needs to be clear on what commitment it is making with the company planning to build and operate Vanuatu's airports for the next 50 years.

The government is yet to reveal details of the 350 million US dollar deal with the Singaporean oil palm and tobacco producer which includes a new international airport on the island of Efate.

TI Vanuatu's president, Marie-Noelle Ferrieux Patterson, told Beverley Tse the government needs to ensure it is entering a fair deal.

MARIE-NOELLE FERRIEUX PATTERSON: It is very important to find out what the promissory notes are. There promissory notes that are going to be signed. What are they signed for? What type of guarantee is the government doing because I think it's twice our annual budget here. So before signing something you want to make sure whether it is just a promissory note in case the Vanuatu government tries to stop the company going ahead and then the company will be at a loss and it won't be their fault and in that case basically it's forcing the government to finish the project. And if it is just that it's understandable and it's easy for the government not to be liable if they allow the project to continue. If they leave the management for a certain number of years to the Singaporean company, I think it could be safe that way, or if it is a commitment to basically guarantee anything anyhow, I think that's a problem. We have a similar thing that happened here with an internet cable where the government has accepted to totally guarantee the people who are putting the internet cable for Vanuatu, and it is likely not to work at the moment because the price is too high, which means that the government has committed that they would pay for the losses or they would kind of fill up the gap of the private company doing that. And because they didn;t do a good enough marketing study, I think it might end up that the government is liable for the full cost of the cable. But apart from that, we're still waiting for more information.

BEVERLEY TSE: It's a fifty year agreement for this Singaporean company to run this airport, is that seen as a long time?

MARIE-NOELLE FERRIEUX PATTERSON: Yes but in Vanuatu we're quite well known as a specialist in giving monopolies for a long time. We had the electricity monopoly for many years. We have the water monopoly to the same French company.. so I think that people are not shocked by the duration. The main thing is for the government to ensure it is a fair deal. And I think it is through the marketing studies that they can see whether it's a fair deal for them. But if they don't need to pay money out and the company's getting that for fifty years, maybe it is, because if it brings a lot of people and a lot of bigger airport, then maybe the convention centre will be used more too. And as a consequence, they'll be hoping that there will be more hotel developments because at the moment everyone is waiting - is it the airport going first or the hotels going first but people are not going to invest in a hotel if there is no bigger airport. We need to wait and see to get more information before criticising but certain information needs to be followed.

Marie-Noelle Ferrieux Patterson says the government should replace the tarmac of the existing international airport in Port Vila before any new airport developments.