Paradise Prosperity Plan roll-out on hold

Wednesday June 13, 2018 Published in Letters to the Editor
The derelict Sheraton hotel is at the centre of the Merchant of Paradise development plan for the Cook Islands. 18061215 The derelict Sheraton hotel is at the centre of the Merchant of Paradise development plan for the Cook Islands. 18061215

Dear Editor,

May I apologise that Merchant of Paradise haven’t been able to roll out the Paradise Prosperity Plan (PPP) to develop the Pa Enua as planned, for the simple reason that we still await the outcome of the Vaimaanga tender that closed on May 31.

As you know, we cannot roll out the project until the availability of Vaimaanga as feeder resort is known. And with the election now upon us, we’ve chosen to put on hold the roll-out until after the election, so as to avoid politicising the project. 

To be honest, I expected MOP to win the Vaimaanga tender hands down and confirmation to come through a day or so after the tender closed. I am saying this because the only precondition the landowner had was for ground rent to be paid annually at 1.5 per cent gross turnover and a $100,000 refundable deposit to be paid up front. We offered in return to meet the ground rent precondition but not the deposit requirement, adding a goodwill payment upfront at $100,000 per acre and two third shares in the development, in line with offers made to Pa Enua landowners.

We chose not to pay the deposit required because our offer in its proper context transitions the role of developer from MOP to the landowner, who will joint-venture the development with Chinese partners able to perform the development, with the landowner to hold two third shares and Chinese partner the other third, meaning MOP will not hold shares in the development. This of course makes any deposit made by MOP with the landowner as developer odd, suspicious and not bankable!

And yes, the offer by MOP to the landowner, and Pa Enua landowners as well, is a game-changer that empowers landowners to develop their own land and obstruct foreign investors and developers who come to drain revenue earned here into offshore accounts to avoid tax: some $100 million now according to some trackers, which of course is the nature of the immigrant economy we now have.

This game-changing plan by MOP is made possible by concessional finance set aside by China’s president Xi Jinping in 2014 for commercial sector developments such as PPP, under the One China Policy Communiqué we signed in 1997. The communiqué stated: “The Government of the Peoples Republic of China will assist the people of the Cook Islands to achieve their objectives, in full, in the areas of social, economic and cultural development.”

The communiqué speaks for itself and is nothing short of a partnership.

Actually, I see no harm in disclosing the prosperity outcome and payload due to the landowner and presumably the people of Takitumu as beneficiaries if MOP’s offer is accepted, given that the roll-out on PPP will reveal all soon enough:

• Goodwill, a one-off consideration paid up front at $100,000 per acre, will yield around $2.3 million.

• Ground rent at 1.5 per cent gross turnover will yield $846,385 a year.

• Profit share at 67 per cent will yield $7,739,161 a year.

And before everyone goes into panic about natives rising and developing their own land, and thinking it will disrupt our immigrant economy exclusive to Rarotonga and Aitutaki, may I suggest think twice, because the PPP development is for the prosperity of all and it will overarch and not disrupt our economy, so we can continue hedging the $100 million revenue in offshore accounts that we need to avoid tax and keep our government and public sector poor, and aid-dependent. And let’s look at the bright side: PPP consumers will come to Rarotonga as gateway to the world, won’t they, so we can feed off them, can’t we?

And before ghost writers go to work overtime speculating on PPP failures, think twice. Because PPP is beyond the comprehension of aid and budget developers on Rarotonga, and ghost writers, with only China able to diagnose development viability, operational sustainability and prosperity outcome. So let’s leave it to China to diagnose, shall we?

And let’s make a deal shall we? If China says that PPP is bankable as I am predicting, your ghosts can bow down before me. And if not, I will accept I am a useless developer and pack my bags and go back to my homeland, New Zealand, and let your ghosts celebrate seeing the back of me! Deal?

Unlike my previous letters, this one is not meant to help, it’s meant to annoy!

            Tim Tepaki

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