Hopes raised for lease of former Desico factory
A ‘local company’ has won the tender to lease the ‘abandoned multimillion tala’ former Desico Samoa factory at Vaitele.
This was confirmed by a senior officer of the National Provident Fund who spoke to the Samoa Observer on the condition of anonymity, yesterday.
“That’s the only information I can give out this time, but I think the best person for you to talk to is our Chief Executive Officer.” the source said.
An attempt to get an official comment from the Chief Executive Officer of the National Provident Fund, Pauli Prince Suhren, was unsuccessful.
An initial investment of ST$3.7 million by N.P.F. in 2005 was the beginning of a series of failed ventures over 12 years at the property.
At the time of the opening, then Minister of Finance, Misa Telefoni, said the production plant leased by Desico Samoa from the N.P.F. was an investment for contributors and the coconut industry.
After the company folded, the Chief Executive Officer of the Fund at the time, Papali’i Panoa, was asked about the wasted millions that had gone into the deserted production plant, saying the project was done out of “good intentions”.
“The project was based on a feasibility study done by a local consultant group and the World Bank,” he said.
He also claimed that some of the millions N.P.F. had invested, could be recovered by the sale of the three acres of land and buildings.
This has not happened.
In an interview with the present Minister of Finance, Sili Epa Tuioti, earlier this year, he appeared to caution and even criticise decisions made by N.P.F.
He said, “It is important that the N.P.F. be quite diligent in their decision-making in deciding who to lend to.
“You know Desico Samoa is understood to be an N.P.F. owned company, so the question really, is, should N.P.F. be in the business of operating or making investments and things that it doesn’t have the skills and the expertise to manage? “
“Obviously, I think whether it’s the Development Bank or N.P.F., we should not be spending money on those projects unless we’re absolutely sure that there’s no risk, and that we will be able to get that money back and that it will generate profits that will enable us again to make sure that our contributors to the fund will receive benefits for that investment.
“It’s important for the fund to ensure that it undertakes a very robust risk analysis, whatever the project is that they want to be part of.
“Obviously, they want to make sure and decide whether based on that due diligence, (whether they) just lend the money to somebody who’s going to run that business on the clear understanding that business is going to make money and will be able to do it, and only participate or be part of the ownership of the company.
“If they are absolutely sure, that’s going to add value to the government, it’s the government that’s going to be doing well, to be profitable.
“Not only that they’ll get their money back, but that they will also get money on their equity so the dividend will help our people.
“So they need to be very selective if there are people in the private sector who can do it, (then) allow them to do it while N.P.F. should back off.”