HUGE DEVELOPMENT PROJECT IN PALAU ABANDONED

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SAIPAN, CNMI (Marianas Variety, August 3) – UK Investments Holdings Ltd. has shelved its Nautilus City project in Peleliu, citing the unacceptable conditions offered by the Foreign Investment Board.

"The various foreign investment impediments in the (foreign investment approval certificate) issued by the (board) to UKIHL and the refusal of the (board) to reply to several formal letters of inquiries made by UKIHL on April 21, May 26 and July 17 have made it impossible for our company to proceed with the Nautilus City project in Peleliu state," said UKIHL director Peter Moran.

UKIHL is duly registered to do business in Palau. It wanted to bring world class development to Palau, including five star hotel accommodations, golf, controlled gaming, marina hub, residential and condominium properties for long-term visa holders, entertainment, restaurants, landscaped gardens and a shopping mall.

On the invitation of Gov. Jackson Ngiraingas, UKIHL chose Peleliu as its project site.

Along with establishing a national airline for Palau, UKIHL said it was also committed to build a brand new international airport for in Peleliu.

[PIR editor’s note: Peleliu is one of two island states on the southwest tip of the main archipelago. It has an area of about 5 square miles and a 2004 census population of about 700.]

According to UKIHL, the current Airai airport is limited in size and length and its triple Black Star rating would require a huge investment of over $100 million as was estimated by Japanese contractors in 1992.

"To attract larger sized planes and instill confidence in high end tourists a second airport is mandatory since Palau should not have to shut down the main airport for several years in order to make upgrades necessary to meet FAA regulations," said Moran.

Moran said he has been coming to Palau for more than 15 years and has made many friends here.

"We have not given up on doing business with us. Our company will shelve the Nautilus City project in Peleliu state. However, we will continue our discussions with Palauans who are seriously committed to improve the economic well being of the nation and with landowners who desire our commercial partnership. We will look very favorable at states that possess the opportunity to site an international airport," Moran said.

He added that UKIHL has expended a great deal of funds to date — for legal fees, architectural, designs, travel, and associated expenses.

Moreover, he said, the company’s chairman has the ability and reputation to obtain approvals for diplomatic and trade ties with Malaysia as requested by President Tommy Remengesau Jr.

"Our company is extremely disappointed of the time invested and the loss of the jump start we had with Palau. While waiting for the right conditions in Palau, neighboring nations have also seen the importance of implementing similar projects elsewhere. We just have to be patient and wait for policies of this or the next administration to be more foreign investor friendly. However, Palau is fast losing the competitive advantage UKIHL offered Palau," Moran said.

"Palau needs to have a self contained world class tourism facility if it wants high-end visitors who are environmental friendly. Our aim was to provide that facility and to bring it to Palau. Moreover, our company was invited by high government officials to do that and that prompted us to come to Palau. We are here also to support the economic objectives of the nation. We have no interest in local politics, just plain good business sense for all concerned," Moran said.

August 3, 2006

Marianas Variety: www.mvariety.com

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