Heartbreak
Hotel
A failed resort has been a hard - and expensive - lesson for
Cook Islanders
Tom
Dusevic / Rarotonga
A
DOZEN VAST AND TRUNKLESS LEGS OF CONCRETE STAND in a boggy field.
A few cows are chomping a lush late lunch, while a forlorn nag
lazes away the afternoon. There is a buzz among the chickens,
for a visitor has ignored the KEEP OFF sign and is trampling
the manure to inspect the partly built pavilions of what was
to be a 200-room Sheraton Hotel. The Rarotonga sky darkens and
the resort's solar panels start cooling. In the 3,000 sunny
days they've soaked up, not one guest has turned on a tap; no
bus boy has washed a champagne flute. As a Polynesian Ozymandias
might declare, Look on my works, ye Mighty, and despair!
Before
the site was abandoned eight years ago, the resort at Vaimaanga
was to be the Cook Islands' largest hotel-and the first bearing
a luxury brand name. In 1987, a flamboyant Italian traveling
salesman got the ball rolling on the project. An Italian construction
firm was engaged to build it with financing from an Italian
government-owned bank and insurance company, while the Cook
Islands government, amid some secrecy, agreed to guarantee the
loan. Says one interested local "There was never a proper due
diligence processor or survey to ascertain the true cost of
construction. The builder made payment claims for work that
was not done and went bust, then another Italian construction
company was employed."
Within
a few years, the lion's share of $60 million disappeared down
a black hole carved out by the Mafia and other crooks, the project
was 80% complete when the insurance firm cut off funding to
the builders. Since then, Rarotongans have seen a steady flow
of foreign receivers, consultants, con men, lawyers, bankers
and developers trying to figure out what to do with the site.
The country's finances were crippled as the government's liability
ballooned to $122 million, and taxpayers are still saddled with
the interest bill. The issue of who owns the hotel has been
stuck in the courts for years.
While
citizens and legislators may harbor mixed feelings about the
impact a large resort could have on sleepy "Raro," they have
never stopped picking at this wound. Why wasn't, independent
financial advice sought, they ask. Should the government ever
be a property developer? Last month an exasperated Prime Minister
Terepai Maoate, whose Democratic Alliance Party inked the deal,
told Parliament: "I would just like the Opposition and government
to stop talking about the Sheraton project, because the more
we talk about it, the less there is to be done about it." Successive
governments have managed to renegotiate the nation's debt with
a string of foreign countries and agencies. Still, people wonder
whether this saga of greed, ignorance and incompetence could
be repeated. "I hope the politicians have learnt their lesson,"
says an official who asked not to be named.
For
a tiny country (pop. 14,600) which earns half of its income
from tourism, completing the project is vital. According to
Chris Wong, head of the national Tourism Corporation, the Cook
Islands need an international hotel in the 4-to-5-star category
that has conference facilities. Most hotels and holiday apartments
are so small, says Wong, that they can offer local residents
only lowly jobs as gardeners, housemaids and front office staff.
"Larger hotels offer broader career prospects," he says. Landowner
Pa Ariki, who is also president of the Cook's house of hereditary
chiefs, has won control of the Vaimaanga site and its buildings.
According to her lawyer Tim Arnold, she is now negotiating with
a high-profile New Zealand investor to complete the hotel. A
new deal may be only weeks away, Arnold says. On this idyllic
isle, hope, like the lone and level Pacific, stretches far way.
Time
Magazine, 17th September 2001
