7 Aug 2013

Questions raised about huge Vanuatu airport development

5:13 pm on 7 August 2013

The Vanuatu foreign minister, Edward Natapei, says the country is missing out on Asian tourists and that is why it is backing a US$350 million development of the country's airports.

He says Vanuatu needs the development to allow Asian tourists to fly in directly, but the opposition is raising concerns about the size of the project and the company involved.

The deal involves a Singaporean company that will build, operate and eventually transfer back to the government a new main airport on Efate and regional airports on Santo, Malekula, Tanna and possibly Pentecost.

Edward Natapei says while it is building the new Efate airport, the company, Vanuatu Trade Development, will also operate Bauerfield at Port Vila, and will be judged on this.

Don Wiseman has more:

"EDWARD NATAPEI: The first thing that they will be involved in is to upgrade the current airport, and that is where we see whether or not they are serious about investing in the country."

Edward Natapei says the government thinks the changes will allow Vanuatu to eventually cater for 5,000 tourists every year.

EDWARD NATAPEI: For the first four or five years, it is not that figure. We are targetting a million in the first four or five years. After that we will need to do some work to extend the terminal to accommodate larger numbers, and that is when we will be targetting five million.

The opposition's spokesperson on finance, Charlot Salwai, says there is a need for improvements, but these could be achieved far more cheaply and without building a new main airport.

CHARLOT SALWAI: What was proposed by the airport authority was to expand the two ends of the existing airport [runway] and open one or two more taxi ways, a new terminal, parking outside, and it will cost one-third of what the government is planning to build at the new site.

A former Vanuatu finance minister says the scheme is absurd. Willie Jimmy, who says he was sacked by the government in May for opposing the deal, says a much more cautious approach should be taken.

WILLIE JIMMY: The Singapore company is proposing too big an investment for the country. The other thing is there is not enough beds, there is not enough hotels to accommodate the so-called five million people expected through all these direct flights. Now this is just outrageous. It is absurd, I think. We need the airport, but we have to develop it stage by stage.

Mr Jimmy says the Singaporean company had a controversial involvement in a similar development in the Maldives, but walked away from the scheme, leaving the government there in the lurch. But Mr Natapei denies that. He says there is no relation between the company involved in the Maldives and Vanuatu Trade Development, whose parent made its money in palm oil and tobacco growing. He says they needed a 50-year deal to justify the huge investment.

EDWARD NATAPEI: We have decided to give them that. We hope when the start operating we hope that they will also be investing in resorts, because that is probably where they will, hopefully, be able to accommodate all the tourists coming in. They are also looking at the possibility of establishing a casino in the resort.

Edward Natapei says the government is confident that its exposure, through a promissory note underwriting the development, will be limited and controlled. He says Vanuatu's neighbours have significant resources but his country's main source of income is tourism and it needs to grow this.