Citation: 1) When captive insurance management companies come to Mauritius, you will see that they will bring around 100 companies with them and when you take the totality of the demand of the companies that have expressed their intention to come to Mauritius, it makes approximately 10,000 jobs in a period of time.”
2 or use for accroche) “If we look at the Heritage City project integrally, it makes perfect logical sense that it is being driven by the minister who will take care of the governance aspect and ICT aspect, and of course, when you are constructing it, you have all the aspects related to the financial services.”
Accroche: “We are including the concept of a dancing fountain… we will also have a Bollywood entertainment park including other facilities such as restaurants and commercial activities.”
Axcel Cheney: How different is the Heritage City project from the Highlands project presented by Rama Sithanen, which remained a dream that was never realised?
The Heritage City project is very different for the simple reason that it is realistic and based on a solid financial arrangement. An enormous amount of work has been done by financial consultants. We have appointed BDO who has worked out its internal rate of return, return on equity and the indicators to show the viability and feasibility of the project in a precise time delay. This is one of the challenges that I undertook and I am focusing on the timing side. It means this is a project that should start and end during this same mandate. After the discussions we had with the prime minister, I agreed to take up the challenge. In three years, Heritage City will be here. It will be situated on the opposite side of Ebène. We are talking about a project of 140 hectares which converts into 336 acres and which will have five folds. The first fold is what we have heard: a new parliament, the Prime Minister's Office and iconic towers. Regarding the iconic towers, they will be like those in countries like Singapore and Dubai. They will be intelligent buildings with all facilities that will not only accommodate ministries but also the data-centres of the government. We are also integrating the concept of e-governance while developing a new place for the public service. It is all the archaic systems prevailing in the public service since independence that we are revisiting, focusing on the latest advancements in technology, cloud computing and so on. At the same time, we are making sure that there is a synergy among all the ministries through this new concept. The buildings will have 23 to 25 storeys, which will be very high. But certainly they can't be compared to the skyscrapers abroad. And then we have the concept of work, live and play. We will have some 1,000 apartments, 200 luxury villas, 400 town houses and 400 affordable housing. The aim is to offer the public officers working there the facilities to buy the houses and live close to their offices. Then we have all the commercial entertainment. We are including the concept of a dancing fountain, quite similar to the one in Dubai. They are trying to replicate a model for Mauritius. We will also have a Bollywood entertainment park including other facilities such as restaurants and commercial activities that we usually find in such places. It is an integrated model which joins all the other developments in that region.
Jean Paul Arouff: We have heard about billions of rupees being injected into the smart cities project. What are the conditions of financing of the Heritage City?
The model of Heritage City is a unique one because we are the clients ourselves. The government will be renting the buildings there. The cost that the government will pay in terms of square feet will be between Rs41 and Rs42 per square foot. This for us is a huge success in the financial arrangement because today we are paying much more than that in Ebène. We are talking about new iconic towers with modern infrastructure which will cost the government Rs41 per square foot when the project is realised. And then the amount will escalate by 10% during the next five to 10 years with another escalation of 10% afterwards, making it Rs46 in the following years. Now regarding the cost of the project, it will come to around US$820 million. US$200 million will represent the value of the land which the government has invested in Heritage City Ltd. The land belongs to the State Land Development Company and following a cabinet decision; it is now being transferred to the Heritage City Ltd. An amount of US$200 million will be in the form of equity, which will be the government's contribution to the project. The interesting part of this model is that we can already start selling the apartments, villas, town houses and affordable housing units once the project has started, which will also bring money into the project. This will cost around US$250 million but we are basing ourselves on some 75% of the financial arrangement, which amounts to some US$170 million. And then we are looking abroad for finance. We had a mission in Saudi Arabia. We have presented all the financial arrangements for the project to them. However, you also need to convince someone about the return and viability of the project. We told them if we obtain a loan of US$300 million at an interest rate of 2% with a moratorium of 10 years, which means we will be paying only the interest until 2026 and the overall amount over 30 years, that would be good for us. We have made a second proposition as we had the option of US$200 million as redeemable preference shares, which would not be taken in the calculation of the national debt.
Heritage City is 100% owned by the government of Mauritius. With the redeemable preference shares, the return will be around 6% according to our calculations. The government can buy back the shares once it starts making money, which allows the investor to get his interest and capital and to exit the project. Besides, the loan option of US$300 million, we have also proposed the option of US$425 million of redeemable preference shares, which will have no implication on national debt.
JPA: What are the commitments of the Saudis to invest in this project as they are already facing a budgetary situation there?
We have already presented to them the figures concerning the project. The internal rate of return of this project is situated between 14 and 16%. The return on equity is even more important. So we have a project in which the government will pay less in terms of rental, not for the time being but certainly ahead in time. We will have more modern buildings and the government will earn profits in the form of a return on equity. The investor will get a return of 2% if we go for option A – that is the loan and the redeemable preference shares. But there are also other benefits to the economy. We are so confident about our figures that we can guarantee the return.
Touria Prayag: You put forward a lot of figures but this is not the first time that you have given figures. If I recall correctly, not long ago, you talked about Rs10 billion which would be invested by Old Mutual after you passed a law in terrible haste. Can you tell us where this Rs10 billion has been invested ie. in which sector?
Absolutely. It is a project by Old Mutual to invest in the financial services sector. They have started to recruit people and they advertised inl’express I think…
TP: But how many people have they recruited?
They started the process… You know when a new company comes to Mauritius, it doesn’t become operational straightaway where it can take on 1,000 people in one go. Their project is to invest Rs10 billion in Mauritius throughout its duration…
TP: And how much money have they invested? How much of that Rs10 billion has entered Mauritius? How much employment has been created at the end of the day?
It’s not a simplistic situation where people come with Rs10 billion in their pocket to Mauritius, put it in front of us and says “I’ve invested Rs10 billion”. In the case of Old Mutual, their project is to invest Rs10 billion in Mauritius throughout its duration…
TP: How much has it invested in its first year?
I don’t have the figure in my head right now but I can explain how it works. It works over a period of time.
TP: Let me help you: You have passed, in a lot of haste by the way, a captive insurance legislation and you promised that you would use this to create 10,000 jobs. How did you arrive at this figure of 10,000 jobs?
(Still confident at this point) It’s easy. If you see all the applications at the Financial Services Commission (FSC) in terms of captive insurance and their intentions to come and set up in Mauritius, they give their figures in terms of how many jobs they will create vis-à-vis the level of activity they will bring. You have something called the captive insurance management companies, and when they come to Mauritius, you will see that they will bring around 100 companies with them and when you take the totality of the demand of the companies that have expressed their intention to come to Mauritius, it makes approximately 10,000 jobs in a period of time.
TP: How many workers does the whole insurance sector employ?
You are talking about domestic insurance…
TP: Yes but captive insurance employs even fewer people because they serve parent companies…
(Laughs but does not provide the figure) Noooo, where have you heard of five or six people in captive insurance?
TP: Don’t laugh. That won’t make your statement true.
(Still laughing) But you are saying something that is not true… You need to know what type of captive you are doing in Mauritius. It’s too simplistic what you are saying Touria. It’s not true at all.
(He goes into a whole debate about insurance but does not answer the question) [Ed – the whole sector employs 2,200 people] You have a very erroneous understanding of captive insurance. Later when the programme ends, we can sit down and I can give you a lecture on how captive insurance works. [Ed – after the interview, instead of the promised lecture, Bhadain’s press attaché in fact confirmed that there would not be 10,000 jobs and that in fact the minister had said only 1,500 – no comment]
JPA: During an interview here, the minister of finance said that the Heritage City project would be based on the formula: build, operate and transfer. Has there been a consensus on this in cabinet?
Certainly there is a consensus. Let me explain. First, the whole concept of Heritage City is not just a construction project as I have explained. It is a paradigm shift in terms of what is currently happening in the public sector and all the procedures, the process and the methodology that is applicable is changing to cater for the public services and where the public servants will work. It is for the new generation of public servants. We have the technological aspect, e-governance and in our mission to Estonia, we discussed how to put everything in place and they are coming to assist us to do this, but all the aspects of governance and technology fall under me. And after, certainly there is the project itself. So if we look at it integrally it makes perfect logical sense that it is being driven by the minister who will take care of the governance aspect and ICT aspect, and of course, when you are constructing it, you have all the aspects related to the financial services. I’ll give you an example: (to Touria) you are talking about insurance, but do you know how much a project like this will bring for the insurers in Mauritius? According to BDO, Rs230 million per year with insurance premiums. And I forgot to tell you earlier, there are also two business hotels in this project. So, there is a whole concept that is being put in place. And when you tell me that I just give numbers, I can assure you that I stay at the office for so long, sit, check everything and ask all the questions that you are asking me today.
TP: Alright, but let me tell you, the numbers that you are giving, there is no way there are 10,000 jobs in captive insurance. I am saying this publicly and if you have a report, make it public.
AC: Do you take up that challenge, Minister?
But, what Touria Prayag didn’t tell you is that, if you check the Hansards and look at the numbers I gave, you have to use it in the timeline that I gave as well. The way you’re saying 10,000, is as if I’m lying. It is based on a timeline. (To Touria) Are you telling me that I am giving numbers just to please people?
AC: Will cleaning the country be a priority of the government again this year?
Well, you know, if you don’t keep cleaning, you will keep getting dirt, and it will stay. Cleaning has to be continuous, whether it is for people in their home, for the country or for the government. It is not a process that stops. However, when we look at what has happened to this country during the last 10 years and the developments that have taken place until December 2014, and the paradigm shift that we’ve had in 2014, I think some people are still not getting it, but people – young people, everyone, on Facebook, on the internet, etc – have said that they do not want that system to continue and that they want to see change.
AC: It is the method that this government has been using to clean the country that is controversial. Let me ask you something: Is the private banker of Navin Ramgoolam – who used to work at the Bramer Bank and is now working with you – the one who feeds you all the information?
Of course not. How can you believe such insanity?
AC: OK, here is another one: Is it true that you have employed the previous assistant of the previous governor of the BOM without the position being advertised? Is that lady feeding you information on the previous governor?
Axcel, I am sorry to say but you are living in extraordinary paranoia. As a matter of fact, that lady is sitting behind you right now. You can ask her later. It is not right that you make allegations like these.
AC: So it’s true then?
How is it true?
AC: You recruited her without advertising the position?
How can you say that? There is a process within the ministry, as we were a new ministry, and we took people in an advisory capacity because when you go through the Public Service Commission, it takes a year or a year and a half to recruit people on a full-time basis. Cabinet took the decision that we need to resource ourselves and when we have taken people, we have advertised and we have taken people based on their competence, know-how, qualifications and what they will bring in terms of added value. To make cheap allegations like these…
AC: You want to change the system but you have taken people who were part of the previous system. I’ll give an example, Rakesh Gooljaury.
He does not work with me.
AC: He does not work with you but he had a meeting with ministers and you are aware of that.
Yes I am aware of that; I was there.
AC: Is there is a form of selective cleaning, then?
Let me tell you something. I see that you have become Navin Ramgoolam’s lawyer and Touria also. Let me tell you something. Everything that is being said about the selective process, everything that he has done over the last 10 years, has he not done it? Are you telling me today that when we use the term political vendetta, it has become a vulgar slogan that has become the defence of people who have abused the system, who have stolen from this country? Now people say this is a political vendetta, it means it is OK what he did?
TP: This is not what my colleague said.
You see when I talk of Navin Ramgoolam, Touria jumps.
TP: Stop this intimidation. These below-the-belt attacks are unbecoming of a minister of the republic and I will not stoop to answer them! My colleague asked a simple question. Give us an answer.
From what I know, as I don’t know everything, Rakesh Gooljaury is a witness in a case and he has given precise information on criminal acts that have happened, so he has that witness status.
TP: I would like to specify by the way that as far as the ‘cleaning’ is concerned, no one is defending Navin Ramgoolam. If you have something personal against him, you should sort it out with him. When we are saying selective ‘cleaning’, we mean just one side. The case of Gooljaury is flagrant: has he become a privileged witness without the office of the Director of Public Prosecutions (DPP) even knowing?
The DPP! Another one of your friends!
TP: You are stooping very low, Minister, with your personal attacks. It is not up to you to decide who is my friend and who is not.
Journalists come, they make their argument and they ask their questions. So I should be allowed to make my point as well.
TP: I am talking of the office of the DPP and asking if Gooljaury got the status of privileged witness through him or not?
(Continuing his personal attacks, unabashed) Are you friends with Urmila Boolell, yes or no? Yes or no? We’ll know how biased you are. Tell the population. Tell them how many times you meet, where you meet, what you do. Tell the population.
TP: I won’t stoop to your level to justify myself or the people that I know or that I don’t know. I am not talking about Urmila Boolell or her husband. I am talking about the office of the DPP and you keep going back to who my friends are, where we meet, what we eat or drink. That is too personal and unbecoming. We are here to have a civilized debate. I put the question again to you: Was Rakesh Gooljaury made a witness without the office of the DPP knowing?
Why don’t you ask the DPP?
TP: We have asked. He is not aware. He has not given the status.
He said that?
(Groping) He is giving you that kind of information? You are putting the DPP in an uncomfortable position.
TP: We are not here to accuse anyone. You have your sources. I am a journalist; I have mine. Tell me if Gooljaury has obtained the status of privileged witness from the office of the DPP.
I don’t know so I can’t tell you. The police investigation is being carried out according to what the police think is the best course of action.
TP: Is there an investigation into Gooljaury, who himself admitted that he had lied to the police?
Now you are substituting me for the DPP. You are asking me to say things that fall under the jurisdiction of the commissioner of police. You need to ask the commissioner of police who he is investigating.
AC: I suggest that we move on.
Just before we do, the observation that I would like to make to Touria is that when this government came into power in December 2014, one of the editions of Weekly in January came up with a statement of Urmila Boolell saying that there is a climate of terror.
TP: It’s her right to say what she wants in an interview! I asked you a question, Minister, and this has nothing to do with an interview we carried over a year ago.
All year, you have come up with different things in Weekly. Roshi Bhadain is this. Roshi Bhadain is that. Let’s tell the population why.
TP: You have the opportunity to answer the questions I am putting to you but you choose instead to dodge them and stoop to bringing down the debate to a personal level. It is not worthy of you.
(Continues his personal attacks) Do you have the right to say that (Ed- Rashid) Ahmine is right and the lawyer of Pravind Jugnauth is wrong? It’s in your editorial this morning. How can you say that Mr. Ahmine is right and Clare Montgomery is wrong.
TC: I said that his performance was good and I was not the only one.
But you are not a judge.
TP: I know. That is why I did not give any verdict.