Gerard Saliot: The Natadola Project Story by Mr Berenado Vunibobo

The Natadola Project started operation in 2004 and, after almost 10 years of research, consultation, and a worldwide search for specialists and discussions with potentional hotel operators, came to an abrupt halt when a new board of FNPF was appointed after the military takeover in early December 2006. The new FNPF board wasted little time in terminating a number of legally binding contracts covering all the major areas of project operations.

It would be useful to go back to the project’s genesis as this would provide a better understanding of the importance of the Integrated Tourism Resort Project for the Fiji’s economy. It would also demonstrate the serious miscalculations of those who are responsible for FNPF’s role in destroying this project. Shortly after independence the Fiji Government arranged for a study to be undertaken on the country’s long term tourism future. UNDP funded the study and, among numerous recommendations, Natadola was identified as the premier site for tourism development. Subsequently, it took almost 20 years before anyone seriously focused attention on Natadola and it had to be a foreigner because no Fiji national appeared to be interested in the site tourism potential.

The most important policy decision relating to Natadola was made by the Mahendra Chaudry government in 2000 when it approved a budget for the construction of the Maro Road and for the area’s water supply. It required a lot of courage and vision to approve this budget for Natadola infrastructure during its first year of government. Another relevant and important point was that the Four Seasons Group were ready to come into Fiji in 2000 but this was put on hold after the events of May 2000.

A number of us in government met with Gerard Saliot during his first visit to Fiji in 1994. He was greatly attracted to the Natadola area, the beautiful beach and the undulating hinterland. It took him almost 10 years of effort and personal investment before work really started. Mr. Saliot has always believed, almost as an article of faith, that Natadola must be owned by the people of Fiji. Serious discussions on the project began with FNPF in 2002. Once work started Asia Pacific Resort International Limited, as the project developers, undertook a global search for the recruitment of key personnel in construction, design and development. A critical part of this preparatory work related to finding a suitable five-star hotel operator. It was fortunate that initial contacts and discussions undertaken by Gerard Saliot lead to the decision by InterContinental Hotel Group to accept an invitation to manage the first hotel to be built in Natadola.

Negotiations with FNPF took some time and the Fund undertook its own due diligence on the project proposals, the results of which were submitted to its investment division for a decision. It should be noted that the investment division was chaired by Mr. Don Aidney who had an unblemished record in the commercial and business life of Fiji. Apart from board members of FNPF, the investment division had two non-fund members: Daniel Elisha, a prominent
businessman from Ba; and Isoa Kaloumaira. To question this decision-making process would also raise some serious issues concerning the integrity of those who recommended that the Fund should finance the Natadola project. Equally important is the fact that when FNPF agreed to provide funding it insisted that the initiator of the project, Mr. Gerard Saliot, should also be responsible for its development.

Thereafter, Natadola Land Holdings Limited was set up as the landholding company responsible for the commencement of the project and property titles. There were seven directors of NLH, four from FNPF and three from Hotel Property Pacific Limited. Subsequently, two other companies were formed. The first was Natadola Bay Resort Limited, which developed the hotel to be managed by InterContinental Hotel Group. This development would be linked to the Vijay Singh designed golf course that would be managed by International Management Group The second company, Yatule Beach Resort Limited, developed some residential accommodation occupied by the project staff. This would eventually be utilised a budget hotel with tariffs that would be affordable by most Fijians. In addition, a nursery was established in order to provide plant material for the Natadola resort area.

There were significant difficulties, however, during the selection of a contractor for the construction of the InterContinental Hotel. The problem was that a number of contractors that initially tendered withdrew with the net result that only one outfit remained. There was considerable debate amongst members of the NBRL board as to whether fresh tenders should be called for. The view expressed by FNPF was that to call for revised tenders would lead to construction delay which would result in substantial loss of revenue. Another important issue was the recruitment of a construction manager. The NBRL board was disappointed that a local company, that had initially expressed an interest in the role, later withdrew. Subsequently, there were comments that the construction manager that was eventually recruited was expensive. However, it should be noted that in a situation where only one contractor is available for the construction of a five-star hotel, it is essential that a construction manager is appointed for technical back-up and oversight.

One of the most important aspects of the work that the developer undertook early in the project was to establish good communication with the landowners of Sanasana village whose land was outlined for the golf course and also the Four Seasons Resort on Navo Island. Given the fact that land for Fijians is linked to the local soul and spirit, it was essential for the project that a foundation of trust be established between the villagers and the project. Before the lease terms were finally settled the developer took a development lease (in 1999) on that land belonging to the Sanasana villagers. An important player at this juncture was the Native Land Trust Board, which was unstinting in its support for the project, and provided a lead role during discussions with the landowners.

The development team was determined, right from the initial stages, to involve Sanasana villagers in the project whether it be through employment opportunities or in the management of the area. Moves towards setting up a trust entity were made although to date the final legal document has not been completed.

Discussions also started with the Housing Authority with a view to improving village housing and basic facilities such as water, sewerage and electricity. Already the village is connected to the electric supply system and, without the efforts of the project, villagers would be waiting significantly longer for these improvements.

The hope and expectation is that the InterContinental Hotel will be ready for occupation towards the middle of 2008. Equally important is that by the end of 2008 or soon after, construction of the Four Seasons Resort on Navo Island would begin. These are exciting times not only for the tourism industry in Fiji but for the country as a whole, because for the first time we would have had a centre of excellence in the tourism industry providing superb accommodation, a world class championship golf course and a range of activities for visitors. At a time when Fiji is experiencing difficulties and urgently needs foreign investment, it is important that a project of this magnitude is protected from the greedy eyes of those who may wish to take advantage of the current situation.

Two documents govern relations between FNPF and the project developer (APRIL). These are the Shareholders Agreement and the Development Management Agreement. The latter has been summarily terminated by the Board of Natadola Bay Resort Limited and the decision was conveyed to APRIL at a meeting on Wednesday 14th March, 2007. The project managers, Coteba, an international renowned construction company based in France also had their contract terminated by the FNPF Board.

At a time when Fiji is anxious to retain the goodwill of the European Union and to ensure access to the $350M EU funds, we seem to have treated Coteba shabbily. But this behaviour also applies to other participants in Natadola development, for example to those responsible for the Vijay Singh-designed golf course as well as other consultants involved in the project. This leaves many of us in Fiji to wonder if Fiji could continue to be regarded as an attractive country for investment, especially when an important institution such as FNPF appears to have been allowed to unilaterally terminate legally-binding contracts without compunction.