No. 31 of 2009 PARLIAMENTARY DEBATES (HANSARD) FIRST SESSION TUESDAY 24 NOVEMBER 2009 2 CONTENTS PAPER LAID QUESTIONS (Oral) MOTION BILLS (Public) The Appropriation (2010) Bill (No. XXI of 2009) 2R The Mauritius Blood Service Bill (No. XXII of 2009) ADJOURNMENT QUESTIONS (Written) 3 MAURITIUS Fourth National Assembly --------------- FIRST SESSION --------- Debate No. 31 of 2009 Sitting of Tuesday 24 November 2009 The Assembly met in the Assembly House, Port Louis at 11.30 a.m. The National Anthem was played (Mr Speaker in the Chair) PAPER LAID The Ag. Prime Minister: Sir, the Paper has been laid on the Table – Prime Minister’s Office - Certificate of Urgency in respect of The Mauritius Blood Service Bill (No. XXII of 2009) 4 ORAL ANSWER TO QUESTION LAND BASED OCEANIC INDUSTRY PROJECT The Leader of the Opposition (Mr P. Bérenger) (By Private Notice) asked Dr. the Acting Prime Minister, Minister of Renewable Energy and Public Utilities whether, in regard to the Land Based Oceanic Industry Project, he will state – (a) if any legislation will be introduced in relation thereto; (b) the number of phases thereof; (c) if the strategic partner has now been chosen and, if so, on what terms and conditions; (d) the outcome of the calls for equity participation and for expressions of interest in the Green Data Centre; (e) the mode of financing the infrastructure, and (f) the sums disbursed as at to date thereon by the Board of Investment, the State Investment Corporation and Government. The Ag. Prime Minister (Dr. R. Beebeejaun): Mr Speaker Sir, the Land Based Oceanic Industry Project conceived in 2005 is based on the commercial exploitation of very deep ocean water currents with valuable characteristics including a constant six degrees cold temperature enriched in mineral and nutrients. In 2005, a Task Force was established by Government under the chairmanship of the Director, Mauritius Research Council to carry out a pre- feasibility study on the establishment of a deep sea desalination mineral water facility. The Task Force included the representatives of the Ministries responsible for fisheries, agro industry, public utilities and finance, the Mauritius Oceanography Institute, the Board of Investment and two co-opted members, namely Mr Mohamed Vayid and Dr. B. K. Baguant. 5 It benefited from the advice of Professor Patrick Takahashi of the Hawaiian Natural Energy Institute and Mr Mike Smart, Project Manager of Petzetakis of South Africa, a firm specialised in seawater pipe laying. Dr. A. Suddhoo, Director of Mauritius Research Council, Mr Mohamed Vayid and Dr. Aubeeluck, representative of the Ministry of Finance and Economic Empowerment made a trip to Hawaii and visited Makai Ocean Engineering, the National Energy Laboratory of Hawaii and the Water Bottling Plant and other installations and submitted its report in December 2005. The Recommendations of the Task Force were as follows - (i) Mauritius may be positioned at a vantage point to exploit deep sea water; (ii) an initial amount Rs10 m. be provided for technical studies and market surveys; (iii) oceanographic surveys be carried out with a view to determine the purity and mineral value of the water; (iv) a new entity be created to encompass different activities and a regulatory body be set up to supervise, monitor and control standards; (v) a campaign be carried out to launch and attract investors, and (vi) a public company be created with an authorised capital of Rs500 m. Mr Speaker, Sir, in January 2006, the Mauritius Research Council contracted Makai Ocean Engineering of Hawaii to work out a conceptual design and economic assessment and recommend the best site for the installation of the intake pipe, taking into account the marine and land based characteristics. Twelve potential sites were identified and after detailed technical and financial analysis, three sites were retained, namely Flic en Flac, Les Salines and Belle Mare. Based on the technical and financial analysis of the three sites and bathymetry tests, Flic en Flac was recommended as the best site. One of the determining criteria was the shortest distance from the coast to reach water at 1000 meters depth and the lowest seawater capital development costs. 6 The Government is most grateful to the Government of India for providing assistance of the Indian Navy in bathymetry and water sampling. Such an exercise would have been extremely costly to the Government of Mauritius. Mr Speaker, Sir, in October 2006, a company under the name of Mauritius Land Based Oceanic Park Limited (MLOPL) was set up with the State Investment Corporation as the main shareholder, with an open shareholding to accommodate investors in the project. The MLOPL would eventually have exclusive concessionary rights to pump water and distribute same to downstream operators. Mr Speaker, Sir, I now come to part (a) of the question regarding legislation, I am informed that the Prime Minister’s Office is working with the Attorney- General’s Office on the appropriate legal framework for the implementation of the project. However, the basic legislative framework is to be found in the Maritime Zones Act 2005. Given the nature and magnitude of the project, the final legislative framework specific to this project is being finalised by the Attorney General’s Office, given that specific concession will have to be given to the Mauritius Land Based Oceanic Park Ltd. As regards the number of phases, a site of 120 hectares belonging to Médine Sugar Estate has been identified for the implementation of the project. The first phase consists of 10 hectares to exploit the coldness of the sea water at a depth of 1000 meters for air conditioning of a data centre of 10,000 square metres. Local and international data centre operators would have the opportunity to lease and operate IT infrastructure from Mauritius or building their own data centre. Out of the 10,000 square meters identified for green data centre, a demand for 6,000 square meters has already been identified by the Board of Investment. The lead partner will bring in the balance. The subsequent phases of the project will comprise green and eco-friendly activities in relation to aquaculture, renewable energy development, pharmaceutical products and desalination plant for bottled mineral water of high quality. In 2007, a consortium of legal, financial and technical advisers Gide Loyrette Nouel was recruited as Transaction Adviser after international bidding for a total price of USD985,000 to develop necessary project documents and assist in identifying potential bidders. A flexible project structure had been identified with an upstream strategic partner investing in pumping and related infrastructure to 7 supply deep sea water to downstream operators. The final report of the transaction adviser was obtained in August 2008. After a two stage of bidding process to appoint a strategic partner for the project, no reasonably acceptable proposals were received. The contract of the transaction adviser was terminated and only $644,250 were paid. Expression of Interest 2009 An expression of interest for equity and strategic participation for a revised project oriented on Green Data Centre was launched on 07 July 2009. At the closing date of 31 July, expressions of interest were received from seven parties out of which three were responsive as follows - (a) Bhumishq Group – Mauritius; (b) Immobilier et Conseil Ltée – Mauritius, and (c) Thompson Chalon and Associates, a consortium of South Africa, USA investors. Following an Investor Conference held on 29 August 2009, and after examination of the offers, the Mauritius Land Based Oceanic Park Ltd agreed that - (i) Thompson Chalon and Associates meets the requirements as the potential lead partner, and (ii) Bhumishq Group and Immobilier Conseil have manifested keen interest to participate in downstream operations. Thompson Chalon and Associates have been selected on the basis of its vision of the park, the time frame for implementation of the project, the financial capability and the ability to secure operators for 10,000 square meters of green data centres. A Memorandum of Understanding has been signed between MLOPL and Thompson Chalon and Associates on 13 November 2009. The purpose of the MoU is to provide a framework of partnership between MLOPL and the strategic partner. The MoU is valid until end January 2010, by which time financial closure should have been achieved. The strategic partner has undertaken to obtain commitment from data centre operators and other downstream players to carry out business in the context of the project. 8 Mr Speaker, Sir, concerning the financing of the project - (i) it is estimated that phase I of the project comprising pumping of water onto land for cooling 10,000 square meters of data centre would require an investment of around $60 m.; (ii) based on the forthcoming Master Plan and Feasibility Study on the investment for phase I, currently being undertaken by the lead strategic partner, the appropriate mix of equity and debt financing will be determined; (iii) the strategic partner has agreed to participate in the shareholding of MLOPL up to 75%. The remaining 25% equity will be held by the SIC together with SIT and the DBM. An initial equity participation of $10 m. is being committed out of which the lead partner will inject $7.5 m., and (iv) as regards offsite infrastructure comprising provision of electricity, water, access road and drainage, Government has already made a token provision of Rs10 m. in the Budget 2010. The final cost would be assessed in the context of the ongoing Master Plan and Feasibility Study. The House may wish to note that the Agence Française de Développement has agreed to provide technical assistance for the preparation of a Cahier des Charges for the promoter to comply with under the Convention de Financement which I signed recently.