FLOSSE, CONTRACTOR SETTLE OVER UNFINISHED TAHITI HOTEL

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SUVA, Fiji (Oceania Flash, May 6) - French Polynesia's President
Gaston has agreed to pay CFP1.1 billion (US$1 million) to French builder
Bouygues for a hospital it did not complete.

Speaking at a press conference on Tuesday, Flosse told local
reporters that while in Paris last week, he had met Bouygues top officials and
come to the agreement with them in order to officially cancel a deal that had
been struck some three years ago.

The agreement, Flosse said, was in effect an undertaking from
both sides that they would not seek any further financial compensation or lodge
further complains.

Last month, Bouygues announced it was pulling out of the Taaone
hospital project, saying it had "had enough."

The hospital was the biggest project undertaken in French
Polynesia in decades.

Work on the project has been halted since the end of last year
after clashes and strikes occurred on the building site.

Three years ago, French Polynesia's cabinet selected Bouygues at
a special cabinet meeting to undertake construction for the CFP22 billion
(US$200 million) territorial hospital in Taaone-Pirae,in Pape'ete's suburbs.

Work was expected to be completed by mid-2003 for the five-story
building, with 562 beds available and a 1,200-car parking facility.

Funding for the project was to come from the assistance promised
by France after dismantling its nuclear testing facility, with the territory
sharing the cost.

But the sharing of the costs has since marred the project and
discrepancies between the initial forecasts and the actual costs of the project
(an increase of 30 percent) have further deteriorated relationship between the
territorial government and Bouygues, despite numerous attempts to iron out the
differences.

The row culminated end of last year, when legal action was
launched against Bouygues for the firing of 140 construction workers employed on
the project.

The firings triggered roadblocks at the capital Pape'ete's two
main entrances.

CSTP-FO Unions also set up pickets and held Bouygues management
and foremen.

May 7, 2003

Oceania Flash: E-mail/Courriel:padec@iname.com 

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