PNG's investment in Fiji beats expectations

PNG's Fiji investment beats expectation. Getty Images

The Pearl Resort is set to become a world class tourist resort, with current development there impressing Mineral Resources Development Company (MRDC) Chairman Sir Manasupe Zurenuoc.

“I had reservations about this investment before coming here (Fiji). I’m now satisfied it has all the hallmarks of a successful project. The owners should be proud that their resort is the envy of others in a competitive market,” Sir Manasupe said when commissioning the Resort’s new mariner last week.

The FJ$8 million marina was designed by Australian based Marina International, designer of Singapore’s Kepple Bay Marina and Dubai’s 3km, 800 berth Marina, both first class projects.

“This facility will add considerable value to the resort’s investment. It is infrastructure investments like a marina that increase property values, and as a result we have seen an increase in our property value by around 8%-10%”, Sir Manasupe said.

“Building a marina here is basically a necessity given the resort provides considerable diving, fishing and other water sports as part of its packages”.

The completion of the Marina marks the first major milestone within the 22 month overall development program.

Since taking over the hotel and the 200 acre freehold golf course in August 2013, MRDC has set a course to developing a further 150 rooms in addition to the existing 80 rooms,  a marina, new conference facilities, a Wellness Centre, Chapel and new food and beverage outlets.

The total construction budget is $F85 million, not US$99 million as reported by The National newspaper (24.12.13).

The project has sought a F$40 million construction loan that will improve investor returns that falls within MRDC guidelines.

MRDC investments over the past several years have drawn political and public criticism and the recent Casino debacle has forced the trustee investment company to review its investment strategy, but more importantly the management of these investments.

“It is vital that we mitigate our risks and diversify our investment portfolios,” Sir Manasupe said.

This is one of MRDC’s first major development projects outside of PNG and engaging professionals and independent experts has been a priority for MRDC.

“Cost and program reporting is a critical factor for ensuring that this project stays within our development expectations,” he said.

International accounting firm Ernst and Young have been engaged to conduct full quarterly audits and review financial forecasts on behalf of the Board to ensure full accountability is maintained.

“The Pearl Resort is one of the largest freehold operations in Fiji and in that context the land value on the company’s balance sheet look extremely attractive as we continue to add and improve value to the property,” the Chairman said.

Recent projected valuations as requested by Bank South Pacific indicate an ‘on-completion’ value of F$125 million.

“Diversifying investments outside of the resource sector protects our landowner funds from volatile shocks. Investing in a growing industry and 200 acres of freehold presents a very stable asset,” he said.

Sir Manasupe learned from the management that the Pearl Resort has, since its acquisition by MRDC, out-performed expectations with an average hotel occupancy of 75% in its first 12 months of trading.

A few factors contributed to this, the primary one being a more aggressive marketing strategy in Asia with a particular focus on the diving and wedding segments.

The Pearl Resort is jointly owned by landowners from the Ok Tedi Mine area, and villagers from the Kutubu oil and gas project area in the Southern Highlands Province. MRDC manages their assets and investments.

PNG Today / Post Courier