FPAC engages IDC in in-depth discussion |16 September 2023
The Finance and Public Accounts Committee (FPAC) of the National Assembly of Seychelles convened a working session with the Islands Development Company (IDC) yesterday, to gain a comprehensive understanding of IDC's operations, financial positions, and its impact on the national economy.
The IDC’s principal activity is the management and development of 17 outer islands or atolls as mandated by the government.
Islands under its management include Alphonse, Astove, Assumption, Coetivy, Ile Platte and Providence, among others.
IDC owns one subsidiary company, Green Island Construction Company (GICC), which undertakes construction on the outer islands.
Additionally, it has an interest in two associated companies, namely, Paradise Marine Ltd, and Green Trees Investment Company Ltd.
To better service the islands, IDC operates its own aviation division, and is the co-owner of the vessel Enterprise II, under Paradise Marine.
As explained by chief executive Glenny Savy, IDC is one of the country's largest companies, with over 1300 employees, and an annual turnover of R1.2 billion over the last financial year. As such, it is one of the biggest contributors in terms of taxes and dividends to government, as a state-owned enterprise (SOE).
IDC paid R30,094,227 in taxes for the financial year ending March 2023.
Chairperson of the FPAC, Sebastien Pillay, emphasised the importance of ongoing discussions with SOEs that play a substantial role in the country's financial landscape. FPAC had previously met with other significant SOEs, including the Seychelles Ports Authority (SPA) and the Seychelles Civil Aviation Authority (SCAA).
Hon. Pillay highlighted the revenue-generating potential of these entities, underscoring IDC's significance in terms of revenue generation, especially through its investments in the outer islands and the role of the GICC.
FPAC, as he explained, fulfils its oversight function through two primary mechanisms. One involves holding public hearings with entities, during which the Committee reviews the Auditor General's report and assesses entities' compliance with financial regulations. The other component comprises meetings with the entities themselves to gain insights into their operations, including financial aspects.
In IDC's case, he commended the company for its improving financial performance over time, due to substantial investments.
However, he cautioned about the risks associated with such investments, particularly if abruptly removed from the economy.
He also emphasised the need to balance the growth of SOEs to ensure that public entities do not stifle private sector development.
“Today, IDC has a turnover that is approaching almost R1 billion and this is important and significant among state-owned enterprises. It shows that there is potential for the growth of public enterprises, but at the same time, we need to be careful that public entities do not become too large to allow the private sector to develop.”
Hon. Pillay added that while the committee is not necessarily concerned with the investment that the company is venturing into, concerns would be about the environmental, financial, and resource impacts of investments.
“In terms of IDC, I do not think we need to have much concern over the way in which it works as it has demonstrated over time that it can work and deliver on its mandate, and most importantly, it can generate a turnover that can increase over time. This is the advantage that we need to be mindful of. But as in any country, we need to have an eye on the individuals who are coming to invest, because it might not be the individual who is problematic to you, but it might be their association down the line which could pose a problem.”
“As the National Assembly, our aim for oversight is to ensure that the Seychelles state does not lose out in the long-term in terms of investments. The figures show that we have only Seychellois individuals managing IDC and that Seychellois have the capacity to do things well,” he stated.
IDC’s chief executive, Glenny Savy, provided insights into the company's financial performance and strategic growth, over the years.
Mr Savy outlined IDC's steady growth despite the challenges posed by the Covid-19 pandemic, after which IDC maintained a strong performance, thanks to prudent financial management and cost-saving measures.
He emphasised the significance of IDC's diversification strategy, which spans construction, services, aviation, shipping, and more. This diversification strategy, Mr Savy explained, helps the company weather economic fluctuations, ensuring balanced results at the end of each year.
The company also shared it plans for the future, including diversification into agriculture, aquaculture, and new tourism projects.
The meeting between FPAC and IDC underscored the importance of transparency and responsible governance in the operations of state-owned enterprises, ensuring that they contribute to the nation's growth and development while safeguarding the interests of the Seychellois people.
Photos by Joena Meme