Government slams false reports on land issues-Addresses issue of Ste Anne Development |23 February 2006

Anne Island for 1 Rupee, stating that the current reports about land issues are inaccurate and simply aimed at stirring bad feelings among the Seychellois people in such a sensitive area.

"It is not our practice to react to each and every issue raised, or article written, by the Opposition in their respective media, but the recent spate of false allegations about land and privatization issues are clearly aimed at inciting the Seychellois public and giving this Government a bad name locally and internationally," says a spokesman for the Ministry of Land Use and Habitat.

After Eden Island and Sacos, the ministry has now taken up the issue of Opposition claims that Ste. Anne Island has been leased for 1 Rupee, an issue which it calls "a blatant distortion of the truth and the facts".

"To add insult to injury, they are claiming that we hide the facts from the public, whereas we have communicated all along, and everything is available for the public to see for themselves at the office of the Registrar," the ministry spokesman says.

In the case of Ste. Anne Island, the spokesman says, it is a straightforward commercial agreement in which we leased an island that was not contributing much to the country's economy at that time so that it would be developed for the benefit of the economy.

"It is important to understand the timing, context and spirit in which the above-mentioned lease was awarded to IOR (Indian Ocean Resorts Ltd)", says the spokesman.
"Indeed discussions with IOR date back to 1996 when new investments into the country were yet to gain momentum and it was not until July 1998 that negotiations and terms to lease the island were concluded with IOR for a term of 99 years for a total consideration of a premium of US $1 million plus an annual rent of US $250,000 or 5% of all revenue generated from all commercial operations on the Island, whichever was the greater.

Transactions between Government and IOR were conducted in full transparency, says the spokesman, and all papers clearly documented and registered, and they are all available for inspection at the Registrar of Deeds.

"Today the results are there for all to see – a fully operating five-star hotel in the form of Beachcomber Ste. Anne Resort, which not only adds to our good tourism name, but also contributes to the economy, employs many Seychellois, and maintains industry training at a high level, and there is more to come", says the spokesman.

As evidenced in the various public documents some amendments were carried out to the original lease of 2001, to principally address the following two factors:
Firstly, to address an unintentional error in the head lease to the effect that only part of Ste Anne was leased to IOR, which was contrary to the agreement of July 1998 and that of the integrated Ste Anne Development plan.

Secondly, with the introduction of a General Sales Tax of 7% on hotel revenue at the national level, Government agreed that it was unfair that operators on Ste Anne would be liable to pay GST twice. Hence Government agreed to modify the financial terms on the 5% Ste Anne GST and replace that with a minimum rent of USD 250,000 and a provision for an escalation fee of 10% every 3 years up to USD 500,000 per annum.

Thus a subsequent lease document dated 20th December 2002 for the remainder of Ste Anne (omitted in initial lease) was signed and a token R1 was paid for legal technical reasons.

"Government firmly believes that at that time (1998) it secured the best deal for the development of Ste. Anne Island and that all transactions relating to the lease of the island were done in a transparent manner," says the ministry spokesman.

The first phase of the development, the St. Anne Resorts Hotel with a foreign direct investment US $50 million has been implemented and this has brought about increased tourism revenue for Government and the creation of more employment for Seychellois.

To date the Government of Seychelles has received a total of 1.5 million US Dollars as lease fees of the entire Island and SR2 million for the relocation of the Marine Parks Headquarters.

"And as we speak, we understand that IOR is actively pursuing the second phase of their proposed integrated development which consists of another hotel and associated luxury villas which is expected to bring even more economic and social benefits to the country, and by which Government through its tax structures will benefit extensively," adds the spokesman.