Government grants new accord to investors building on Long Island


04-March-2013

The signing of the new agreement

A formal agreement to this effect was signed between the government of Seychelles and the Polus Investment Company Limited last week at Independence House.

This was in the presence of the Minister for Finance, Trade and Investment Pierre Laporte, and the Minister for Land Use and Housing Christian Lionnet.

The investors had started to develop Long Island in 2005 and the project was supposed to be completed by 2010. But after set backs and delays and several extensions granted by the government, it had still not been completed by 2011.  

The principal secretary for land use and habitat Yves Choppy signed on behalf of the government, while the managing director for Polus Investments Seychelles Ltd Philip Evans signed for the investors.

Speaking to the press shortly afterwards, Mr Choppy said there were several reasons that although granted several extensions, the investors had not managed to complete their projects in time, which included difficulties with their contractor, as well as being hit by the 2008 global economic crisis.

He added that the government had the option of terminating the leasehold agreement if the contractors did not complete their project in time, but however, after reviewing the situation, it was decided that for the betterment of the country, the investors would be penalised with a premium fee of US $1.5 million for not completing on time, and a new leasehold agreement made.

“When we evaluated the work done on the terrain and progress already made, and we appraised their promises on how the project will progress this time, the government decided not to give over the project to a new investor,” he said.

“In the new leasehold agreement, we have also taken into consideration the financial loss made by the country in terms of economic revenue, due to the delay in the completion of the project. We have also imposed a US $100,000 per month penalty in the new lease agreement that the investors have to pay for each month that they exceed the deadline if they do not complete in time, with a total of six months’ delay being the acceptable time for exceeding the deadline.”

Mr Evans said they are satisfied with the new conditions imposed by the government and they are working hard to put the project back on track.

“We are in discussion with a number of hotel operators at the moment – we opened a call for proposals two weeks ago to the top 12 luxury hotel operators around the world – and we have been inundated with positive requests to make use of this opportunity and in the next four to five weeks we hope to have been able to identify which final operator we are going to go with,” he said. 
The new lease agreement is for a period of 49 years and the investors have said they expect to complete the project in November 2014.

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