11:20 AM |
French Polynesia moves to sell controversial NZ student hostel
URL to article: http://pacific.scoop.co.nz/2010/03/french-polynesia-moves-to-sell-controversial-nz-student-hostel/
Pacific Scoop:
Report – By Patrick Decloitre in Pape'ete.
French Polynesia's government has announced a move to sell a controversial property investment – made under a previous administration – in Auckland that was initially designed to host Tahitian students and people recovering from medical treatment in New Zealand.
The so-called "Rocklands Lodge & Hostel" was initially purchased five years ago, under an administration led by pro-independence President Oscar Temaru.
The price mentioned at the time was about US$5.8 million.
But the last cabinet meeting, this week finally resolved to sell the property, which had not yet started functioning.
The move was said to have been motivated by a relative rebound on the real estate market in New Zealand, after several years of slump.
But it was already anticipated that the sale, if an interested party was found, would probably not attract more than US$3.7 million in the best case scenario heard by the Cabinet last week.
"Hence a loss of US$2 million," the Cabinet was briefed.
It was decided that no improvement would be carried out between now and the date of a possible sale and the property would therefore be sold on an as-is-where-is basis.
Three years ago, the government admitted that the Auckland building contained asbestos, which could hamper the sale price.
Earlier attempts to sell
The purchase of the Rocklands Hostel by the Temaru administration was scrutinised by a parliamentary committee in Tahiti, two years ago.
The committee found in its report that, among other things, the price paid was $1.5 to 2 million higher than the "normal" real estate market conditions at the time and that the payment of the goods and services tax (GST) should not have been charged, which was another ingredient to the hefty cost of the building.
The committee also found that generally speaking, the due diligence principle had not been applied.
The controversial property has been on and off the French Polynesian government's agenda over the past years, depending on who was in power.
The 170-room building (located at 187 Gillies Avenue, in Epsom, about ten minutes' drive from downtown Auckland), was said to provide "support to our countrymen overseas" in New Zealand, either for studies or for medical reasons.
The Temaru government also stressed at the time that the hostel could also eventually become French Polynesia's base for a permanent representation office, some sort of Consulate and a base for French Polynesia's students studying in New Zealand on scholarships.
A decision to sell the property was already made in August 2007, under a government headed by Gaston Tong Sang.
Tong Sang, who is now back in power, had at the time signed a decree authorising the government to dispose of the property and effectively seek expressions of interest for potential buyers on the international market.
Tong Sang also stressed at the time that one of the contemplated roles for the building – that of a de facto embassy – was "no longer a priority".
Another factor mentioned in the decision-making process was that a new hospital was currently under construction in the capital Pape'ete, which would lessen the need for medical evacuations to New Zealand.
Patrick Decloitre is editor of the Oceania Flash news service [2] and a contributor to Pacific Scoop.
Article printed from Pacific.scoop.co.nz: http://pacific.scoop.co.nz
URL to article: http://pacific.scoop.co.nz/2010/03/french-polynesia-moves-to-sell-controversial-nz-student-hostel/
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