Why negotiations failed – Su’a tells

A businessman who won At he bid to turn the Samoa Land Corporation’s (S.L.C) Office complex into a hotel has broken his silence over why the negotiations have failed.

And according to Su’a Tanielu Su’a, who operates the Samoa Tradition Resort, the government’s decision to re-tender the complex stemmed from the failure between the parties to agree on the value of the property.

According to Su’a, the government wanted to sell the three-storey-building for $4.5 million. The businessman said he hired a structural engineer and a team to value the property and the valuation came to about $2.2 million.

With a four year depreciation, he said the final value came down to about $1.7m to $1.8million.

Su’a revealed this when he was contacted for a comment yesterday after S.L.C, through the Ministry of Public Enterprises, issued a statement during the weekend, announcing Cabinet’sdecision to re-advertise the tender for the two-acre property and office facilities. Su’a said he was unaware about Cabinet’s decision.

“To look at the real value, there was no way that the building can fetch that much,” he said.“So, from a business perspective, that’s not viable. $4.5 million on a building like that, that’s just too much.”

The government’s statement had said that the negotiations to lease the S.L.C Office complex have reached a deadlock. And to that extent, Cabinet has approved to re-advertise the tender for the two-acre property and office facilities.

Su’a told the Samoa Observer that he had discussed the decision to tender the property for the third time around, with the S.L.C. Minister, Lautafi Selafi Purcell, two weeks ago.

“I said well, if that’s the Government’s decision, so be it. I did my best in trying to express my interest in terms of turning that into a commercially viable operation and from a business perspective that’s what I did. “I don’t know, maybe Government has something in mind.”

Su’a, who submitted proposals for the first and second tenders and won both rounds, said he has put a lot of resources into preparing documents and had started employing extra workers to train for the implementation of the hotel plans.

Asked whether he would apply for the third tender, he laughed.

“We’ll just focus on Samoa Tradition Resort for now and we’ll see what happens. I guess the message is we don’t qualify.

“I’m not sure whether it’s wise to do it for a third time... or maybe I’m not seeing something the government is seeing. Perhaps the company is not the right entity to take over the property.”

But he said, the S.L.C. office complex is going to be a business venture and for a local business, “we don’t have millions of dollars”.

They look at the viability of a venture and assess their own capability and hire people who can inform them of the decisions they need to make.

“And we made very informed decisions in taking and approaching the Government tender. It’s not that we orbitally just jumped in.”

Su’a admits he did not expect the government would choose to tender the property again. He wanted to exhaust all the options from government and that included Cabinet.

“And I was thinking if Cabinet would not agree to sell it then we would go with the lease. That’s the kind of decision I expected from Cabinet...”

But Su’a accepts that that is the nature of negotiation and like anything else, when all options are exhausted and the decision making process in government is yet toreach the top.

“That’s how I see the negotiation process. But then the top just terminated it.”

It’s been almost five years since the Samoa Tradition Resort was in business.

The owners, Endeavour Investment Ltd planned to take the same model across to the proposed complex and put up a sports hotel, upgrade the operation and the standard of the golf course. The Samoa Tradition Resort initially started with two three bedroom apartments. Today there are forty rooms with two new Samoan presidential suites in completion.

And with its traditional designs and architect, the resort lives to its name.

As the former Director General of the Pacific Islands Forum Fisheries Agency, Su’a travelled a lot and was often disappointed that his experiences of the countries visited were limited to the hotel and meeting venues.

The only places that really left an impression on him were in a Spanish village and Indonesia, in a rural hotel where everything was authentically Indonesian.

“You know, I said to myself, when I go back home, I will build accommodation that also promotes Samoan tradition. And if a traveller comes and stays, he or she will always go back and remember, because it has all the Samoan architect, designs, throughout the whole accommodation. That’s how it started.”

Meanwhile, work continues as normal.

“We’re just going forward with what we’re doing. We’re not just going to sit here and wish we had done a better job with government in terms of the negotiations. We believe what we proposed for government is a better way forward for the property.”

Last week, the government said that through the S.L.C Board of Directors, it took on board the investor’s business plan and has exhausted all options available to accommodate the business proposals.

“These things happen, it is normal in business transactions,” S.L.C Minister, LautafiSelafi Purcell said.

“While every effort is made by government to encourage and assist local business like E.I.L, we have to ensure government assets are protected.

“The new tender will include specific details, requirements will be very clear on what is on offer and what can be negotiated and what can’t. The tender document will be made very clear to parties involved.

“This will minimize a repeat of events highlighted during the last tender process negotiations.”