TIANLI PROJECT
(No. B/440) Mr E. Guimbeau (First Member for Curepipe & Midlands) asked the
Vice-Prime Minister, Minister of Finance & Economic Empowerment whether, in regard to the
Tianli project, he will state where matters stand.
The Vice-Prime Minister, Minister of Finance & Economic Empowerment (Dr. R
Sithanen): Mr Deputy Speaker, Sir, with your permission, I will reply to PQs B/440 and B/465
together.
As the House is aware, in March 2007, Government and the Tianli Enterprise Group
signed a Framework Agreement for the setting up of the Mauritius Tianli Economic and Trade
Cooperation Zone over 211 hectares of land over a period of five years. As per the Agreement,
the project promoter has the responsibility to construct onsite infrastructure and buildings
whereas Government, on the other hand, has the responsibility to develop the required offsite
infrastructure, namely access roads and other utilities.
The detailed Project Master Plan for the Mauritius Tianli Economic and Trade
Cooperation was approved by Government in March 2008. At that time, the Tianli Group had
secured around 30 investors to invest in this zone in Mauritius. The project implementation was
initially scheduled to start last year. However, it has been delayed, as the clearance from the
Chinese authorities on the detailed engineering design was being awaited. Added to that, the
global financial crisis has also prevented Tianli from securing additional investors to implement
the project rapidly.
Mr Deputy Speaker, Sir, the visit of His Excellency, Mr Hu Jintao, President of the
People’s Republic of China to Mauritius in February this year has given a new impetus to the
project. It will now be financed by three main shareholders as opposed to one; the China Africa
Development Fund, the Shanxi Government through a special investment vehicle, and the Tianli
Group of Companies.
I understand that the Provincial Government of Shanxi has been requested to ensure
swift implementation of the project. There is also now confirmation from the Chinese side that
construction works will, in all likelihood, start in the third quarter of this year, namely by
September 2009.
I wish to further inform the House that BOI has been entrusted with the task of
facilitating and monitoring the project implementation. It is closely following up with the project
promoters to ensure that the new deadline is met, and the project is effectively started in the 3rd
quarter of 2009.
Mr Guimbeau: Mr Deputy Speaker, Sir, as regards the Framework Agreement, in reply
to a PNQ of the Leader of Opposition on 10 June 2008, the hon. Minister stated that he would
have no problem to request the Chinese to have the agreement made public. I would like to ask
the hon. Minister if he made that request to the Chinese.
Dr. Sithanen: I do not think that the Chinese side are very keen to make this public.
Mr Guimbeau: Mr Deputy Speaker, Sir, the same project was done in Zambia, and it
was signed and made public. So, why is it that in Mauritius we cannot have the agreement made
public?
Dr. Sithanen: Because we have signed an agreement where there are clauses of
confidentiality, and we have to respect the clauses of confidentiality. This is one of the biggest
projects that this country will ever know. We have to respect what our Chinese friends also have
requested us.
Mr Guimbeau: Will the Tianli Project be granted exemption of VAT and, if so, can the
Vice-Prime Minister give an estimate?
Dr. Sithanen: It is primarily for exports, and I’m sure the hon. Member would know that
when you are exporting there is no VAT.
Mr Soodhun: Can the hon. Vice-Prime Minister indicate whether there is any
modification of the plan?
Dr. Sithanen: Yes, there has been a modification. In fact, this has been an ongoing
process. They have to review it, based on what the market can demand and what they would be
able also to sell to Africa.
Mr Guimbeau: Mr Deputy Speaker, Sir, as regards the off-site infrastructure, which
adds up to Rs750 m. paid by Mauritius, can the hon. Minister state how much has been spent so
far?
Dr. Sithanen: I do not have the exact figure. Mr Deputy Speaker, Sir, let me explain to
the hon. Member.
(Interruptions)
It is good that we know the context. The Chinese are going to invest 700 million dollars, and if
we multiply this by 34, we get about Rs22 billion. They are going to create about 30,000 jobs
directly. They will export annually about 300 million dollars. There are countries in Africa that
are queuing up, lining up in order to get the Chinese to come. You have to do something also to
get this investment, Mr Deputy Speaker, Sir. I do not understand where the hon. Member is
coming to. There are countries in Africa that have sent their Prime Minister, their Minister of
Finance to China to beg the Chinese to have this Trade and Economic Corporation Zone in their
country. This is one of the most important projects that will come our way.
Mr Guimbeau: Mr Deputy Speaker, Sir, we all agree with what the Vice-Prime Minister
is saying. But, all we are asking for is transparency in that project, which is one of the biggest
projects as he has just stated. Now, as far as the State land is concerned, the hon. Vice-Prime
Minister stated it was leased at a concessionary rate. Can we know what is the rate?
Dr. Sithanen: Mr Deputy Speaker, Sir, let me again explain for the enlightenment of my
hon. friend. In some countries like Botswana, they are willing even to pay the salaries of the
workers that will work in that zone, and they did not get this zone. We do not have oil; Nigeria
got it because of oil. We do not have copper; Zambia got it because of copper. There are other
countries that are giving zero corporate tax. We refused to give zero corporate tax. But, as I
said, – I have said this anecdote – we are not the only beautiful girl in town. You need to make
sure that you compete and offer a conducive environment to attract people to come and do
business in this country. We have had to make some concessions, Mr Deputy Speaker, Sir. I
think that, in Zambia, they are not paying any corporate tax. Here, they will have to pay 15%
corporate tax. Mr Deputy Speaker, Sir, you need to have some unique selling propositions in
order to attract investors to this country. You can’t just pray God, and hope that investors will
come.
Mr Soodhun: The Vice-Prime Minister mentioned that there are changes. We would
like to know what are the major changes.
Dr. Sithanen: Mr Deputy Speaker, Sir, it was primarily light engineering, Freeport,
logistics and now they have broadened it to include what they would call a warehousing facility
where they will showcase what China can do in Mauritius for Africa. Then, they have decided
to add also business services and training institutes.
Mr Guimbeau: Mr Deputy Speaker, Sir, we all agree with what the Vice-Prime Minister
has said, but he has not answered my question. What is the rate per arpent for the State land?
As we are taxpayers, we would like to know the rate per arpent. Can he also indicate what type
of lease it is? Is it a commercial, agricultural or industrial lease?
Dr. Sithanen: Mr Deputy Speaker, Sir, let me repeat to the hon. Member: this is the
largest single investment that this country has known and we have had to make concessions. Let
it start! They want to kill the project before it starts. This is the intention of the hon. Member.
They always do this; they want to kill the project.
Mr Guimbeau: Mr Deputy Speaker, Sir, I have a last question. Can the Vice-Prime
Minister tell the House then if it is still Rs50 an arpent for a 500-arpent?
Dr. Sithanen: I do not know; I don’t have the exact figure.

Sitting tuesday 12 May 2009

(No. B/440)

Mr E. Guimbeau (First Member for Curepipe & Midlands) asked the Vice-Prime Minister, Minister of Finance & Economic Empowerment whether, in regard to theTianli project, he will state where matters stand.

The Vice-Prime Minister, Minister of Finance & Economic Empowerment (Dr. R Sithanen): Mr Deputy Speaker, Sir, with your permission, I will reply to PQs B/440 and B/465together.

As the House is aware, in March 2007, Government and the Tianli Enterprise Groupsigned a Framework Agreement for the setting up of the Mauritius Tianli Economic and Trade Cooperation Zone over 211 hectares of land over a period of five years. As per the Agreement, the project promoter has the responsibility to construct onsite infrastructure and buildingswhereas Government, on the other hand, has the responsibility to develop the required offsiteinfrastructure, namely access roads and other utilities.

The detailed Project Master Plan for the Mauritius Tianli Economic and Trade Cooperation was approved by Government in March 2008. At that time, the Tianli Group had secured around 30 investors to invest in this zone in Mauritius. The project implementation was initially scheduled to start last year. However, it has been delayed, as the clearance from the Chinese authorities on the detailed engineering design was being awaited. Added to that, the global financial crisis has also prevented Tianli from securing additional investors to implement the project rapidly.

Mr Deputy Speaker, Sir, the visit of His Excellency, Mr Hu Jintao, President of the People’s Republic of China to Mauritius in February this year has given a new impetus to the project. It will now be financed by three main shareholders as opposed to one; the China Africa Development Fund, the Shanxi Government through a special investment vehicle, and the Tianli Group of Companies.

I understand that the Provincial Government of Shanxi has been requested to ensure swift implementation of the project. There is also now confirmation from the Chinese side that construction works will, in all likelihood, start in the third quarter of this year, namely bySeptember 2009.

I wish to further inform the House that BOI has been entrusted with the task of facilitating and monitoring the project implementation. It is closely following up with the project promoters to ensure that the new deadline is met, and the project is effectively started in the 3rd quarter of 2009.

Mr Guimbeau: Mr Deputy Speaker, Sir, as regards the Framework Agreement, in reply to a PNQ of the Leader of Opposition on 10 June 2008, the hon. Minister stated that he would have no problem to request the Chinese to have the agreement made public. I would like to ask the hon. Minister if he made that request to the Chinese.

Dr. Sithanen: I do not think that the Chinese side are very keen to make this public.

Mr Guimbeau: Mr Deputy Speaker, Sir, the same project was done in Zambia, and it was signed and made public. So, why is it that in Mauritius we cannot have the agreement made public?

Dr. Sithanen: Because we have signed an agreement where there are clauses of confidentiality, and we have to respect the clauses of confidentiality. This is one of the biggest projects that this country will ever know. We have to respect what our Chinese friends also have requested us.

Mr Guimbeau: Will the Tianli Project be granted exemption of VAT and, if so, can the Vice-Prime Minister give an estimate?

Dr. Sithanen: It is primarily for exports, and I’m sure the hon. Member would know that when you are exporting there is no VAT.

Mr Soodhun: Can the hon. Vice-Prime Minister indicate whether there is any modification of the plan?

Dr. Sithanen: Yes, there has been a modification. In fact, this has been an ongoing process. They have to review it, based on what the market can demand and what they would be able also to sell to Africa.

Mr Guimbeau: Mr Deputy Speaker, Sir, as regards the off-site infrastructure, which adds up to Rs750 m. paid by Mauritius, can the hon. Minister state how much has been spent so far?

Dr. Sithanen: I do not have the exact figure. Mr Deputy Speaker, Sir, let me explain to the hon. Member.

(Interruptions)

It is good that we know the context. The Chinese are going to invest 700 million dollars, and if we multiply this by 34, we get about Rs22 billion. They are going to create about 30,000 jobs directly. They will export annually about 300 million dollars. There are countries in Africa that are queuing up, lining up in order to get the Chinese to come. You have to do something also to get this investment, Mr Deputy Speaker, Sir. I do not understand where the hon. Member is coming to. There are countries in Africa that have sent their Prime Minister, their Minister of Finance to China to beg the Chinese to have this Trade and Economic Corporation Zone in their country. This is one of the most important projects that will come our way.

Mr Guimbeau: Mr Deputy Speaker, Sir, we all agree with what the Vice-Prime Minister is saying. But, all we are asking for is transparency in that project, which is one of the biggest projects as he has just stated. Now, as far as the State land is concerned, the hon. Vice-Prime Minister stated it was leased at a concessionary rate. Can we know what is the rate?

Dr. Sithanen: Mr Deputy Speaker, Sir, let me again explain for the enlightenment of my hon. friend. In some countries like Botswana, they are willing even to pay the salaries of the workers that will work in that zone, and they did not get this zone. We do not have oil; Nigeria got it because of oil. We do not have copper; Zambia got it because of copper. There are other countries that are giving zero corporate tax. We refused to give zero corporate tax. But, as I said, – I have said this anecdote – we are not the only beautiful girl in town. You need to make sure that you compete and offer a conducive environment to attract people to come and do business in this country. We have had to make some concessions, Mr Deputy Speaker, Sir. I think that, in Zambia, they are not paying any corporate tax. Here, they will have to pay 15% corporate tax. Mr Deputy Speaker, Sir, you need to have some unique selling propositions in order to attract investors to this country. You can’t just pray God, and hope that investors will come.

Mr Soodhun: The Vice-Prime Minister mentioned that there are changes. We would like to know what are the major changes.

Dr. Sithanen: Mr Deputy Speaker, Sir, it was primarily light engineering, Freeport, logistics and now they have broadened it to include what they would call a warehousing facility where they will showcase what China can do in Mauritius for Africa. Then, they have decided to add also business services and training institutes.

Mr Guimbeau: Mr Deputy Speaker, Sir, we all agree with what the Vice-Prime Minister has said, but he has not answered my question. What is the rate per arpent for the State land?

As we are taxpayers, we would like to know the rate per arpent. Can he also indicate what type of lease it is? Is it a commercial, agricultural or industrial lease?

Dr. Sithanen: Mr Deputy Speaker, Sir, let me repeat to the hon. Member: this is the largest single investment that this country has known and we have had to make concessions. Let it start! They want to kill the project before it starts. This is the intention of the hon. Member.

They always do this; they want to kill the project.

Mr Guimbeau: Mr Deputy Speaker, Sir, I have a last question. Can the Vice-Prime Minister tell the House then if it is still Rs50 an arpent for a 500-arpent?

Dr. Sithanen: I do not know; I don’t have the exact figure.