Friday, August 15, 2014

Bel Ombre hotel Seychelles project; owned by son of Sheikh Khalifa

The project may well be bringing USD 40 million as FDI in the country but residents of Bel Ombre did not hide their misgivings about the construction of a 100 plus bedroom hotel during a public meeting held on Saturday. The promoter is the son of the ruler of the United Arab Emirates, Sheikh Bin Khalifa and it is believed that the management contract will go to either hotelier Fairmont or Swiss Hotels. But residents say they fear the public consultation was just a front and that regardless of their feelings, the project will go ahead.

 Those residents of Bel Ombre district, who took the time to participate in a public consultation about a proposed hotel project in their community, were mostly of the opinion that such a project is not the best for the area. Turnkey Solutions –a local consultancy firm is representing the promoters of the project- the SBK Group. The SBK Group is the holding company of HH Dr. Sheikh Sultan Bin Khalifa Bin Zayed al Nayan, son of the ruler of the United Arab Emirates, Sheikh Bin Khalifa Bin Zayed al Nayan.

 Turnkey Solutions Director Wilson Nancy and the Chief Executive Officer (CEO) of the Seychelles Investment Bureau (SIB) Rupert Simeon presented the project proposal to the residents.
• A sizeable foreign investment project

 The proposed project constitutes a foreign direct investment of around 40 million US Dollars and although the presenters did not divulge this information to the meeting, Mr Nancy did volunteer the information to this newspaper. He also said that should everything work out, the hotel should be completed by late 2015/early 2016. This gives a time frame of around 18 months for all consultations, submissions to local authorities and construction. As the project is proposing the construction of a hotel of between 90 to 120 rooms, the tight time frame led the members of the public present at the meeting to opine that no matter what they do say, this project has already been given the go ahead. A comment which both Mr Nancy and Mr Simeon hastened to reassure the meeting, was not true.

 The proposed project is to be constructed in the area near the La Briz Silhouette office and jetty and although the area does not appear to be big enough for construction of this magnitude, the plan incorporates land reclamation. The concern which repeatedly came up was that should the proposed hotel fail to attract enough clients to maintain a high occupancy rate, this will bring the managers to bring down their prices and thus become competitors to the small guest houses and small hotel operators in the area.

“What guarantee do we have that this will not lead to a situation to Port Glaud where supposedly five star establishments are offering rooms for as low as 200 euros a night, which is what we small establishments charge and will therefore compete directly with us?” one guest house operator asked.

 Mr Nancy said that the hotel will be run by one of two well-known international hotel groups either- Fairmont or Swiss Hotels Group - and they represent two established brands. He said that this branding in itself would ensure that the hotel will not be competing with the small establishments. SIB’s Rupert Simeon concurred with Mr Nancy and pointed out that groups like Fairmont and Swiss Hotels are run by a head office which regulates their pricing across the board and it is unlikely that it will bring down its price for one branch only. Mr Nancy also stated that the promoters have guaranteed that they will not be competing with the small establishments.

“They will not need to do so, because they are funding this project through equity financing and not via a loan, therefore there is less pressure on them. Even if their occupancy rates drops at times they will be able to manage, so they won’t need to bring down their prices.”

The Member of the National Assembly (MNA) for Bel Ombre, Gaelen Bresson was also present at the meeting and he raised numerous points. The MNA pointed out that the current practice as far as foreign investment in tourism is concerned is that promoters promise much to the communities at the beginning, but later do not honour their pledges. He said this is especially true with regards to the employment of locals in the hotels.
“What we see is that when they start, they stick with the 40% expatriate workforce, then they go on to ask for 50% which later becomes 60% and even 70%. What guarantee do we have that this new establishment will employ Seychellois?” he asked.

 In reply, Mr Nancy again claimed that SBK Group has given him the assurance that the managing firm will be employing youths from the tourism academy and other Seychellois, except in very senior management positions where there is no local expertise. In his presentation, Mr Nancy had announced what he termed certain benefits which the district would derive from the project, but the MNA said these were not clear and elaborated that the big establishments in the area were not currently even putting their Corporate Social Responsibility (CSR) tax money into Bel-Ombre projects.

 Well-known local tourism operator Mr Stravens questioned the practicability of giving the go-ahead to such a big project for the district and said that instead these rooms capacity could have been spread out among smaller establishments, which would have involved local investment and direct benefit to the Seychellois.
“Today we have about 5000 room capacity in the country and the occupancy rate is slightly under 50%. The question here is do we need more hotels or do we need to find ways to fill up those which we already have? » he asked.

 Mr Stravens also pointed out that somewhat lax follow up on the hotels honouring their commitments was allowing them to adopt practices which put them in direct competition with the small guesthouses.
“When they submit their project and it is agreed this is done on the basis of a project memorandum, which states how much they will be charging and it is on this amount which they are taxed. Therefore if they say they will be charging 800 euros per night, the Revenue Commission should charge them 15% of that and not enter into fluctuating prices when they say they are not doing so well etcetera. This will compel them to keep their prices and not implement drastic cuts which make them compete unfairly with the smaller establishments.”

• Development of available utilities

 Other concerns regarded the impact of yet another big hotel on the district’s fragile ecosystem and on the public utilities available in Bel Ombre.

“We already have problems with water supply. This will bring additional pressure to bear on water supply, because if it is a four star hotel, they will not be giving their clients desalinated water to drink. What guarantee do we have that they will be capturing other water sources in Bel Ombre and not taking even more from the community is getting through the national system?” one lady asked.
 Mr Nancy explained that part of the project is to look at the costs involved in finding alternatives to improve the availability of water supply in the district for the good of both the hotel and the community as a whole.
“We do not want to become an additional burden on the PUC supply. Together with PUC and following their guidance we are looking at other water sources available in Bel Ombre, for example the one at Mare-Aux Cochons and see how we can capture that for our use and for the community.”
Mr Nancy also addressed concerns about electricity provision as the district is already experiencing fluctuations in power supply and said that the promoters are engaging PUC to see how to resolve this.
“PUC has told us that there is a need to bring the Beau Vallon station up to 33000 volts so that it can supply both Beau Vallon and Bel-Ombre fulltime without interruptions and we are working with them to see how we can do this.”

He equally told the meeting that the promoters will invest in extending the reach of the north Mahé sewerage system up to La Scala hotel and when asked by the meeting, he agreed to put before them the possibility of taking it even further up to Danzilles.

 With regards to the aesthetics of the project, the meeting was of the opinion that the design is ungainly and does not blend well with the environment. They also commented that four-star clientele goes in more for chalets and bungalow type resorts instead of the big blocks building being proposed. Mr Nancy said that nothing has been finalized as yet and that all these aspects will be taken into consideration.

“Local knowhow and expertise will be consulted all the way, especially when we go about the reclamation as the fishers here know the water best. Nothing is a fait accompli as yet and we will definitely incorporate your concerns before we present our final submission to government”, he said.

• Look at the bigger picture, says SIB CEO
 The head of Seychelles Investment Bureau told the meeting that with such foreign direct investment projects the government is looking beyond the immediate future to 15 to 20 years on.
“We have to look at the bigger picture here. We aim to eventually bring about 500,000 visitors here each year and we need the capacity for this to fill up the planes. We rely a lot upon taxes to develop our infrastructure and we need these projects which bring such developments. If we don’t increase tax avenues, we will regress!” he stressed.

 Mr Simeon added that Seychelles is also looking beyond sun, sea and sand tourism and as the country is aiming to become a business platform for Africa, it is aiming to attract commercial tourism to increase the volume of visitor arrivals and make it viable for airlines to fly here.

 The meeting was also given the assurance that in the first lieu the hotel would buy fish and vegetables form the district, thus providing an important market outlet for the local produce. Mr Nancy replied to a concern put forward by Planning Authority CEO Gerard Hoareau that the construction phase will also not impact on local housing situations. A local contractor who wins the tender will implement the project and as the hotel will also be employing Seychellois there will not be a staff housing issue, he said.

 Asked if all these guarantees have been formalized, Mr Nancy assured TODAY that while this is not yet the case, the promoters are not against giving written guarantees. He also promised that after the project has been approved the promoters will meet with Bel Ombre residents in another meeting.

“They are very familiar with the district. They already interact with the community here whenever they come on holiday, so they have no problem with meeting the residents. Also to include those people who have not attended today’s meeting, we will carry out a door to door exercise to get their opinion as well. We will work with NGOs present in Bel-Ombre to do this,”Mr Nancy concluded.

 The participants at the meeting included mostly residents involved in tourism activities but there were also representatives of the ministry of Land Use and Habitat.

Source: Today