In short, MOP is wrapping up its scoping of the PPP development to present to government, so it can consider the project in terms of policy and endorse it, and pass it on to China to consider in terms of funding using concessional finance set aside for commercial sector developments under the One China Policy (OCP) aid platform.
As MOP understands it, China has set aside US$250 million (around NZ$360 million at today’s exchange rate) for the commercial sector, which is available until October next year – the PPP development requires NZ$300 million!
The wrap up is essentially a call up of memorandums of understanding (MOU) between MOP and landowners who have agreed in principle to their lands being developed for tourism, which drives the PPP development, with agriculture and fishing developments integrated for food security and airlift and shipping integrated for sustainability.
And so that we are clear, these MOUs provide that a goodwill payment of NZ$100,000 per acre is paid upfront for a 60-year lease term, so as to establish a benchmark purchase price on land use for tourism, plus 1.5 per cent gross turnover paid annually and 67 per cent profit paid annually, making PPP tourism developments a local company undertaking – and yes landowners are lining up to sign their MOU, why wouldn’t they?
In return landowners are required to share their prosperity with non-government organisations (NGO), namely Ui Ariki, Religious Advisory Council, Vaine Tini, Pa Metua and Sports and Cultural Bodies on their island, by gifting 5 per cent profit to each NGO, thus reducing their profit share to 37 per cent – and yes landowners have agreed to share their prosperity!
As for agriculture developments, a similar commercial structure will apply but with goodwill set at NZ$50,000 per acre, with MOUs to be signed up when Chinese partners come to prove up MOPs scoping of the development and verify suitability of land for farming – and yes landowners are putting their hands up to sign agriculture development MOUs, confident in the knowledge that integration with resorts provides them a guaranteed market and the key to their prosperity!
On fishing, a meeting asking the Ui Ariki to take up the 67 per cent local shares is being arranged and is work in progress, and why wouldn’t they?
Fishing is essentially a middleman business opportunity brought about by fishing authorities in our region banning on-water transhipment of fish last year, Penrhyn being much closer to international fishing hotspots than Pago Pago, which will rival tourism revenue generated – and yes Penrhyn landowners are ready to sign an MOU for their land to be developed for on-island transhipment of fish, and only transhipment, not canning of fish and not docking for boat repairs!
Needless to say the wrap up is now in motion with handover to government expected by end of October.
In the meantime, may I clarify some key issues people have raised with me?
Questions and Answers
1. The delay on the PPP project, which started in 2012, is on me. I was obsessed with completing Vaimaanga and didn’t let go soon enough – sorry! And let’s be grateful that another Rarotonga landowner had the heart to step up and develop a feeder resort for Pa Enua signature resorts?
2. PPP is not a difficult undertaking at all, it’s just a matrix of tourism, agriculture and fishing developments that we are all familiar with, integrated for economy of scale and connected by virtual airline and shipping for sustainability – “virtual” meaning wet eased aircraft and ships that come with crew and avoids the repair and maintenance issues that haunt “real” airlines and shipping companies.
3. Signature tourism with “Christianity” unique to each island and Sabbaths practiced as each island sees fit is the point of difference we need for a successful ascension to 5-star international brand tourism. Without unique signature, we will get lost in the quagmire of global 5-star tourism and just another destination.
4. Like New Zealand, our target market is the 146 million middle-class Chinese travelling the globe each year and more specifically, the 67 million Chinese Christians with some 100,000 of them coming out of the underground each month, making Christianity the fastest growing religion in China at 7 per cent growth each year. And let’s not forget that 70 per cent of the USA population is Christians, all looking for a safe haven they can call their own – we cannot cope with the traffic!
5. MOP hasn’t considered New Zealand’s Pacific Reset funding for its PPP development for the simple reason that it is only available “government to government”, as MOP understands it, and not “government to commercial sector’’ as provided under OCP.
6. And so that we are clear, any reservation I may have expressed in relation to Pacific Reset is because New Zealand talk shows are calling us leeches for depending on New Zealand aid after ascending to developed status, thus making China’s OCP funding a more palatable proposition!
7. Of course we have the resources and ability to develop so our Pa Enua can join us at our developed economy table on Rarotonga, and join our fellow New Zealanders at their aid free economy table – and perhaps aid them when we mine our seabed minerals?
8. Of course Government supports a development by Pa Enua landowners for their people, which is what PPP is about, after all PPP is as much the initiative of PM Henry Puna and his Government as it is that of MOP. It’s just that Government cannot comment until it receives the PPP development wrap up, now expected by end of this month.
9. And of course China supports a development by Pa Enua people with Chinese partners to help them, which is how PPP is structured.
Didn’t President Xi Jinping travel to Fiji to tell SIDS leaders himself that China was putting aside concessional finance for commercial sector to undertake such developments as PPP? Again, like our government, China cannot comment until it receives the PPP development wrap up, now expected by end of this month.
10. As for ghost writers and smoke signalers disrupting progress of the PPP development, may I respectfully suggest that “it’s not for you”, it’s for Pa Enua people who have suffered economic vacancy in silence long enough!