Tourism industry in shutdown as new wharf fails to deliver

Australians have been forced to abandon new tourism businesses in Vanuatu over a Chinese bank loan was afflicted with “mistakes’’.

Matthew Woon has had to halt building his Vanuatu beach club. Picture: Britta Campion

Australians have abandoned tourism businesses in Vanuatu after a cruise ship wharf built with a Chinese bank loan was afflicted with “mistakes and miscalculations”.

Sydney businessman Matthew Woon, who lives in Vanuatu with his son, said he had to shut down the tourism side of his Lapita Plantation business and close his newly built beach club because of the setback.

“I built a beautiful beach club. Lucky for me, I own the land so the outlay for me was only a couple of hundred thousand Australian dollars and the land cost about $800,000,” Mr Woon told The Australian. “But the Vanuatu people who have bought new buses, who have got loans from the bank for them, and we’re talking $60-70,000, they aren’t going to be able to make the repayments.”

In 2014, China EXIM Bank loaned Vanuatu $US87 million ($107m) to build a new wharf at ­Luganville on the northern island, Espiritu Santo.

Lapita Beach Club in Vanuatu. Source: Supplied

In a recent article, the Vanuatu Business Review asserted “mistakes and miscalculations” with the wharf, which officially was delivered last year, were causing huge losses and accused Shanghai Construction Group of failing to follow through on many key promises.

Tourism operators were told only 12 ships would dock at the wharf this year, down from more than 30 last year. “To add insult to injury, many stakeholders are concerned the new wharf’s bollards are simply not numerous enough, do not have the proper load-bearing capacity and are not positioned properly to allow the larger cruise ships to berth at all,” the newspaper reported.

“Each cruise ship arrival in Luganville represents a massive infusion of spending relative to the size of the town. For now ... the massive port facility will remain a quiet, empty shell, to be used only a dozen or so times in 2018.”

David Cross, managing director of Santos Adventures, said he was told the number of ships arriving would be light in 2019, and might pick up in 2020.

Writing in the Vanuatu Daily Post, Dan McGarry said locals should question projects such as the wharf. “The Santo Wharf ­Project is a striking example, where failure to consult and co-ordinate with local and industry stakeholders resulted in a drastic ­reduction in cruise ship arrivals for 2018,” he wrote.

Mr Woon said he was not opposed to funds from countries such as China flowing into the country but said they needed proper oversight. He said local mismanagement was as much to blame as those involved in construction.

“You have got a lot of Australian investors who have gone over and set up businesses to cater to this emerging tourism market that all of a sudden at the end of last year we find out is no longer there,” he said.