Olivier Masson
5 November 2007
Port Louis — The regulations needed for an extended Integrated Resorts Scheme for owners of small plots of land have not yet been delivered. Some small planters are concerned as they cannot progress in the implementation of their projects.
Marginal rocky lands, with low cane productivity, could provide a mainstay for small planters to launch new tourist resort development.
"Investors and customers come from Europe and Asia, from the United Kingdom, Singapore, India and China." When the concept of Integrated Resorts Scheme for small landowners was introduced in the last Budget Speech, not all reactions were positive. But since then, expressions of interest have been numerous. And small landowners, mainly sugar cane planters, find it a valuable means of tapping the opportunities offered by the opening of the economy. Yet, like the members of the Planters' Reform Association (PRA), they are still waiting for the regulations to be implemented by the State Law Office.
It was Rama Sithanen who announced it: a new scheme, other than the IRS, was to be introduced to enable small landowners, of plots not exceeding 10 hectares in aggregate during the past 5 years, to carry out mixed use development and sell residential units to non-citizens.
The salient features of the small landowner scheme would be: development on freehold land not exceeding 10 hectares in aggregate by a landowner or group of landowners; the landowner or group of landowners of the proposed development would be an important shareholder of the development company; no minimum selling price for the residential units; foreign buyers not entitled to residence or occupation permits, but still qualifying for such permits under other schemes and exemption from the Morcellement Act and the Morcellement Tax.
In a context of decline of the traditional sugar sector, the reply from planters was more than enthusiastic. "With the drop in cane price, those lands, already less productive than prime land, would no longer meet our needs", says a member of the PRA. His marginal rocky lands, with a low cane productivity of less than 30 tons per arpent, are nevertheless a steal for tourist development: surrounded by mountains and already in the vicinity of hotels. "If the politics of reaching 2 million tourists by 2015 proves successful, we should have a good share of it", he adds.
"If quality is achieved, villas and complexes in these smaller resorts could be the missing bargain for those foreigners who want to spend a long rest while on a remote beach."
Like others, he has made all the preliminary research, gone to designer architects. But he has had to pause at an early stage, as the authorities do not have any criteria available to approve or amend it. "Documents are waiting for the SLO Regulations to be submitted and for the relevant ministries to give their green light."
As it appears, an authorized source says that regulations are being finalized but some fine-tuning is being made to protect the inte-rests of owners and promoters against wild speculation.
Meanwhile foreign investors are getting impatient. And in a very competitive, sometimes risky, market, with offers all around the world, especially from the Carribean, would-be promoters feel the pressure of time. "We cannot just abandon our agricultural activities and sit idle until it is too late to rescue anything."
Yet, it is reasonable to think that foreign clients will wait a little. With standard IRS villas costing up to six times more than the 500,000 USD minimum price, the small landowners' IRS provides room for the less exuberant and cheaper desert island dreams. If quality is achieved, villas and complexes in these smaller resorts could be the missing bargain for those foreigners who want to spend a long rest while on a remote beach.
Slow pace has also rhythmed the implementation of mainstream IRS projects. And the real impact of these is still in the process of being fully assessed. But the track of small landowners is filled with other obstacles. How, for example, to undertake a fruitful marketing for their property, when they have limited means?
When the concept of small resorts was launched, loan schemes were envisaged. While some commercial banks have shown interest in funding these types of projects, there are hardly any particular loan product designed specially for that purpose.
And then there is the question of the know-how in a sector, tourism, which is very demanding in terms of standards. For this reason, some planters hesitate to make their mind. "We are eagerly waiting for a signal from the Board of Investment to set up a one-stop shop, so that procedures and schemes could be tackled with more ease." But again, this can only be done after the necessary regulations are settled.
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