Sunday, September 14, 2008

Mauritius seeks to use property development to galvanise it knowledge industries

The Indian ocean island State of Mauritius is hoping to galvanise $1-billion-a-year in foreign direct investment (FDI) over the next decade through the creation of an urban and knowledge industry hub, dubbed the Highlands project- a platform which they believe could enable the country's IT sector to expand from a $1,7-billion industry into a $17-billion over the next 12 years.

They are also convinced that it will help drive an upgrade of its education system and are targeting to raise tertiary enrollment by 64% over the same period.

CRISIL Risk & Infrastructure Solutions was appointed by the State Land Development Company (SLDC) of Mauritius as the transaction adviser to handle the procurement processes, and its public private partnership (PPP) director, Ramnath Iyer, tells Engineering News that the project, will increase the country's gross domestic product in real terms by 100%.

"There is an 85% literacy rate in Mauritius, 70% of the population is in theproductive age group, and there is a tertiary education enrolment rate of 35%. This rate is low because there are limited employment opportunities in the country and it is financially difficult to go abroad to pursue tertiary studies. Through this project, which will be a hub for knowledge-based industries, people will aspire to attain qualifications, and to work in this sector," he adds.

SLDC CEO Bhagwansing Dabeesing tells Engineering News that one of the main objectives of the project is to create employment.

Other aims include "pushing" Mauritius to become globally competitive, and establishing the country as a gateway to business opportunities in the Southern African Development Community (SADC) region. " We envisage Highlands as a regional icon and a development hub connecting with Asia, Africa and Europe," he says.

Dabeesing was in South Africa last week, on leg of a first roadshow to market the project to foreign investors and to invite proposals for a master developer for the project.

He says that South Africa was one of the ideal locations to begin the roadshow as a result of Mauritius's commitment to the SADC, and alsobecause of the two countries shared similar values.

Four other road shows will be conducted in India and Paris this month and in Dubai, and Singapore next month.

Iyer says that he expects most of the funding for the development to be sourced from the SADC region, and that the project will probably use professional expertise from South Africa.

The master developer will be established by March next year, and construction is expected to take off in the second half of 2009. The master developer's investment in the project in terms of master planning, land clearing, development of infrastructure and landscaping is estimated at about $138-million. The potential revenue from the sale of land over a seven year period is estimated at $1,26-billion.

The urban and knowledge industry development project is spread over 920 ha and is located close to the capital city of Port Louis. This development will include office space, hotels, resorts, residential accommodation, educational institutions, tourism, and recreational and entertainment facilities.

The government of Mauritius is expected to invest as much as the master developer's $138-million, which Iyer points out is towards hard costs, and excludes financing, marketing, and so on.

Dabeesing disclosed that as a result of traffic congestion in the country, a proposal has been put forward to relocate a number of government buildings to Highlands, which will see about 1200 to 1600 civil servants transferred to this area.

He added that it is envisaged that the master developer would integrate the concept of greenbuilding into the new development.