June 30, 2010

Fiji Media Crackdown To Hurt Economy, Foreign Investment

Fiji Media Crackdown To Hurt Economy, Foreign Investment - Australian Minister

By Neil Sands - 
JUNE 29, 2010

Of DOW JONES NEWSWIRES

MELBOURNE (Dow Jones) A crackdown on foreign media ownership in Fiji will damage the island state's economy and deter foreign investment, Australian Foreign Minister Stephen Smith said Tuesday.

Smith condemned a Fijian decree imposed this week forcing all media outlets to be 90% locally owned within three months, saying it damaged both free speech and the country's economic prospects.

In comments that drew a sharp rebuke from Fiji's Attorney-General Aiyaz Sayed-Khaiyum, Smith said the foreign ownership cap could deter investment in Fiji.

"That will have very substantial and serious deleterious effects on Fiji's economy and adversely affect the prosperity of their people," Smith told Australian Broadcasting Corp.

He described the action by Fiji Prime Minister Voreqe Bainimarama as regrettable and said his regime "continues to take Fiji backwards."

Since Bainimarama came to power in a bloodless military coup in 2006 he has cracked down on press freedoms, censoring reports and expelling foreign reporters and media executives, as well as suspending the constitution and pushing back the deadline for promised elections to 2014.

Fiji's economy, heavily reliant on sugar exports and tourism, has experienced sluggish growth in recent years due to political tensions and lack of progress implementing economic reforms, according to a report released in December by the International Monetary Fund.

The report predicts a fall in foreign direct investment in Fiji to an estimated US$264 million in 2010 from US$415 million in 2006

Sayed-Khaiyum said Smith's remarks were inaccurate and Bainimarama's government had worked to liberalize the economy to make Fiji more attractive to investors.

"The people who know Fiji, the people who are investors or would-be investors in Fiji, know that the issue of the media is very, very separate to the private sector investment that takes place in other sectors," he told Sky News Australia. "To draw some type of correlation is completely misplaced."

News Corp.'s (NWS) Australian subsidiary News Ltd.(NWS.AU), which says it will have to dispose of its only Fijian newspaper The Fiji Times under the decree, has described the move as a blow to the country's fragile economy.

"This is an outrageous precedent that will make foreign investors in other industries very nervous about their involvement and support there," News Ltd. Chief Executive John Hartigan said in a statement Monday.

News Corp. owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.

The Fiji Times is the largest newspaper in the country by circulation and has long had a tense relationship with the Bainimarama regime. News Ltd. said Monday that reporters at the newspaper had faced physical intimidation from the military-led regime and two managing directors have been deported in the past two years.

Sayed-Khaiyum said Fiji wanted to ensure its media wasn't run by foreigners who had no interest in the country's future.

"The media organization needs to have a stake within the country itself," he said. "They need to be pro the country, I'm not saying pro-government, but pro the country."

New Zealand Prime Minister John Key said the way Fiji had set about controlling the media was heavy handed.

"We want to see democracy restored in Fiji because we want a full operating economic environment," he told reporters. "When you start banning media and telling organizations to sell their newspapers, to me it sounds like a step too far."

June 16, 2010

FEA seeks $1billion dollars

by Elenoa Baselala
Fiji Times - Wednesday, June 16, 2010
THE Fiji Electricity Authority needs more than $1.1billion to "strengthen" its existing transmissions and invest in future transmission networks.

Chief executive Hasmukh Patel said this was essential in order to transport electricity from the new sources of power generation to customers, and to successfully meet the ever-increasing demand for power.

He said last week that a realistic tariff based on the cost of production would enable FEA to do this.

"The power transmission and distribution networks that need to be strengthened or constructed have been identified and preliminary works have commenced," he said.

The power provider needs $375million for its capital expenditure on generation, $210m for the Independent Power Producers (IPP) and $520m for FEA transmission, distribution and retail.

"FEA plans to fund some of these schemes and expects the private sector and independent power producers to fund the remaining mainly power generation projects," Mr Patel said.

The FEA already has government guaranteed debts worth $400m, which was confirmed by Public Enterprises head Aiyaz Sayed-Khaiyum at the Fiji Institute of Accountants Congress last week.

At the same meeting, Reserve Bank of Fiji governor Sada Reddy voiced his concerns on the State's liabilities, particularly in bailing out some of the statutory companies whose debts the State had guaranteed.

In particular, Mr Reddy gave the example of the Housing Authority where close to $40m worth of debts were transferred to equity as the organisation could not service its debts.

Mr Patel said the FEA could not further increase its debt levels to fund the identified projects as existing cash inflow was insufficient to enable funding for these projects.

But if it does not do anything, the possible scenarios would be inability to meet increasing demand of electricity, high fuel bills due to reliance on diesel generation, power rationing and its inability to service its debts could result in the immediate repayment of the loans and exposing the government as the guarantor.

While tariff realignment was approved by the Commerce Commission two weeks ago, Mr Patel recommends a detailed tariff study to establish the realistic tariff levels that would enable the FEA to implement its development program, facilitate the entry of IPPs, ensure long-term financial sustainability and achieve financial returns.

June 10, 2010

Get Bauxite mine running: Illegal Fiji PM

Fiji Broadcasting Corporation - Thursday, June 10, 2010

Stakeholders involved in the proposed Bauxite mine initiative in Bua have been urged to speed up negotiations and get the mine up and running. 

Prime Minister Commodore Voreqe Bainimarama, at a visit to the bauxite mine area today, also urged landowners to go into a joint venture with the mining company so they can reap the benefits.

FBC News Roland Koroi with this report from Bua:

“Prime Minister Commodore Voreqe Bainimarama told landowners at Nawailevu that the main reason he is pushing for the opening of the bauxite mine was so that they could benefit. 

Bainimarama told those gathered at the proposed mining site that for far too long landowners of this country were not taken seriously and were not getting what they rightfully deserve in as far as far as their concerned. 

The Prime Minster was briefed by experts at the site before being taken on a short tour of the Naiviqiri Bay. The Naiviqiri bau is currently being looked at as the site for a wharf – for the loading of bauxite. Naiviqiri is about 5 minutes out of the mining site and it is also here that a quarry will be built to contribute towards the betterment of the road which is now just a track through reed patches on soapstone and red mud. 

It was here that Bainimarama told the Permanent Secretary for Lands Colonel Neumi Leweni that he wants work to begin as soon as possible. 

He has also advised NLTB representatives present at the site to speed up the process of sorting the land leases out and he has made it clear that he does not want anybody or anything to prevent or even delay the process of getting this project off the ground.”

Permanent Secretary for Lands Colonel Neumi Leweni told FBC News that outstanding issues with the mine will be sorted out soon.

“The Prime Minister has been briefed by the Company and mineral resources officers and directed that we discuss all the issues with NLTB on Tuesday to sort out all the issues that needs to be sorted out and the green light will be given.”



June 6, 2010

Fiji Inflation hits 9.4% in May: Bureau

Fiji Broadcasting Corporation - June 04, 2010 
Fiji’s average annual rate of inflation stood at 9.4 percent in May 2010, compared to the same month in 2009, the Bureau of Statistics said in figures released this week.

The Consumer Price Index (CPI) which covers price changes in urban areas (Suva, Lami, Nausori, Lautoka, Nadi, Ba and Labasa], has weights derived from the Household, Income and Expenditure Survey of 2002/2003.

The average CPI for the 12 months to May 2010 stood at 6.6 percent compared with the average for the 12 months to May 2009.

The Bureau said the CPI for the month of May 2010 registered an increase of 0.1 percent over
April 2010 (126.4) and stands at 126.5.

In price changes recorded over the previous month, food prices dropped 0.6 percent with lower prices recorded for cereals, fresh fish, fresh fruits, mineral water, yaqona, fats and oils, tea, milo, ovaltine, top dressings, confectionery and market items such as imported carrot, okra, egg plant, rourou, pumpkin, onion, potato, dalo, cassava and blue peas.

The transport category recorded an increase of 1.9 percent with higher prices recorded for new vehicles, petrol, diesel, new tyres and spare parts.

Alcoholic drinks and tobacco saw a drop of 0.1 percent with lower prices recorded for cigarettes.

The Bureau said the housing and clothing and footwear categories recorded some changes but these were “balanced out”.

June 2, 2010

Momi properties up for mortgagee sale

Fiji Live News - 02 June 2010

Abandoned Bure at Momi Bay Resort

The Fiji National Provident Fund is not the only entity to incur losses due to the collapse of the multimillion dollar Momi Bay Resort project as the Unit Trust of Fiji is now making efforts to recover its $12.5 million invested in the project.
The Unit Trust of Fiji has put up over 300 acres of freehold land on the site for mortgagee sale which was to be stage two and three of the development project.

Unit Trust with the Banaban Trust invested in stages two and three of the development at Momi, which would have included the construction of the Ritz Carlton Resort, the expansion of the golf course and residential lots.

Since the project hit financial problems, Unit Trust was directed by the Capital Markets Development Authority to initiate steps to recover the Momi loan which was not being serviced.

Now, Unit Trust has brought in real estate agents, Bayleys to sell off the property through a mortgagee sale.

Bayleys Director Philip Toogood said the final price of sale for the property will be determined by the market.

There is an audio file attached to this story. Please login to listen.

The Momi Bay Development project was to have cost around $225m and the Fiji National Provident Fund invested in the first stage of the development investing around $80 million.

An earlier attempt by the FNPF to auction the property fell short of the recovery amount with the highest bid being only $44 million.

The FNPF has since decided to cut its losses and has written off a total $55 million from the Momi Bay Resort project.

FEA in Danger of Insolvency: Reddy

Fiji’s Commerce Commission says the Fiji Electricity Authority (FEA) could become insolvent if tariff rates are not above the unit cost of generating electricity.


Announcing the realignment of electricity tariff rates yesterday, commission chairman Dr Mahendra Reddy said the position of FEA at this stage was quite a worrying factual reality.


“The implications from this scenario on Fiji at the micro and macro level are numerous as the consequences of such a scenario will be disastrous,” he said.


Reddy indicated that rising fuel costs and the increasing use of diesel generators to produce electricity will also severely impact Fiji’s foreign reserve position.


“Power shutdowns and rationing will affect the commercial and industrial sector and thus economic growth in Fiji,” he added.


Reddy said after receiving a submission by FEA to implement an average 8.82 cents per unit tariff increase, the commission proceeded to examine the submission on its own merit.


According to the commission’s analysis, Fiji’s electricity tariff rates are much lower than comparator economies such as American Samoa, Kiribati, Palau, PNG, Tuvalu, Tonga, New Zealand and Australia.


“The commission noted that the current tariff rates do not reflect the scarcity of the single most important input, water, that it utilised in electricity production,” he stated.


He also indicated that FEA’s effort to encourage conservation of electricity by users has not led to significant gains on electricity savings.


“The unproductive and luxury usage of electricity continues to take place in the domestic, commercial, institutions and church group and the street light user groups.”


Reddy said FEA’s heavy borrowings to build a new hydro dam and power plant at Nadarivatu in the interior of Viti Levu was taken into consideration.


The new tariff rate alignment will see high end domestic users paying 8.82 cents more while the commercial sector will have to pay between 2.2 cents to 11.8 cents more depending on their usage. 


Households that consume 130 kWh monthly will be paying 16.4 percent less.


The decision is phase one of the tariff alignment and the Commerce Commission has asked FEA to provide detailed information to undertake phase two of the alignment, expected to take place next year.