Glenny Savy was interviewed by Raj Meetarbhan (Editor-in-Chief of Today in Seychelles), an interview which is now available to read on our website...
RM: Your Financial Report lists the principal activity of IDC as follows : management of outlying islands, transportation, construction , tourism and private investments. Really, what is your core business?
GS: To understand this, you have to understand the raison d'être of IDC. After independence, government did not own any islands. They were all privately owned except for Aldabra, Farquhar and Desroches which formed part of the ex-BIOT group. These were reverted to Seychelles after independence. All the other islands were owned by individuals, some foreign, some locals.
Were the ex-BIOT islands privately owned before the British took them over?
Yes. The British acquired them or had their lease cancelled. When they were retroceded to Seychelles, Government entrusted the management of these islands to the then Ministry of Agriculture. These islands had an economic potential but the ministry was not the best vehicle to develop them. That gave the idea to government to create a parastatal, the IDC, with a mandate to manage those islands, make them economically viable and ensure their environmental sustainability. Turtle meat and coconut were their only products then. The copra market was on the verge of collapsing anyway. Under the circumstance, IDC came into existence.
RM: Which year was that?
GS: IDC was created in April 1980. So when the private island owners found themselves in financial difficulty, their islands came up for sale. When I joined IDC, early 1982, we owned four or five islands. A couple of islands were purchased by government before I joined.
As a young economist, I drew up, together with Mr. Belmont, the first development plan for the outer islands. I encouraged government to buy more islands because I knew they had tremendous potential. I argued that the State will better protect the environment than private owners. These islands were not expensive, I said, and some wealthy individuals will buy them if the State did not. Furthermore, private ownership would compromise public access to the outer islands, I pointed out.
RM: Were the islands offered for sale or acquired against the will of the owners?
GS: There is only one island that was acquired in this way : Alphonse. All the others were purchased.
RM: From voluntary sellers?
GS: Yes, most of the owners were approaching us themselves. They said they were not making money out of their island.
RM: Why is Alphonse an exception?
GS: Alphonse is an island that belonged to the Teemooljee group. There were complaints from the staff on Alphonse that the boat service was not regular and that supplies were not transported from Mahé for a long time. On one occasion, we had to divert one of our boats to give assistance to people who were sick on Alphonse. The island manager communicated with a passing yacht over HF radio and his complaint transmitted to IDC. I was on Providence when I received the call. I went there and saw a dozen of miserable people, with two kids in very bad shape. I rushed them to one of our islands and from there to Mahé. The next thing I know is that government took the decision to acquire Alphonse. There was a level of neglect which was unacceptable.
RM: In all other cases, owners decided of their own will to sell the islands?
GS: I stand by that. If anyone says that government obliged them to sell their island I would like to see them.
RM: So there is a big misconception because many people think that the islands were seized by force?
GS: I am happy that you have asked me the question. You could just have listened to stories and believe them. We need to ask for information to know the truth. The other day I was on Farquhar with the select committee of the National Assembly. They did not expect to see the reality that they saw. We do not know what is going on because we do not ask. Some say there is a lack of transparency at IDC. I disagree. I respect all legal obligations and file reports and accounts. I provide information to PEMC . I am answerable to my Board. When there is a project, we go through all the processes, we apply for licences, we apply for EIA's , we give all details.
RM: Let us come back to the history of the Outer islands. So, on your advice, government buys the islands. Such purchases were market-based with a willing buyer and a willing seller, you say?
GS: Some negotiations went fast, some took years to complete. In the case of Silhouette, for example, I was very much involved because the French owners contacted me personally. The place was run down. They offered it for 5 million francs, at that time equivalent to about SCR 7- 8 million. It was in 1983. I told government it was a give-away, un cadeau. If we did not buy it, some rich individual would. Government did not want to spend money on an island where there were 40 people who produced nothing. They said it was a loss-making proposition. Eventually we got our way and bought it. We then started to work on development plans for all the outer islands.
RM: At this point, how many islands does IDC own?
GS: The 14 islands are : Assumption, Cosmoledo, Astove, Farquhar, St Pierre, Providence (made up of two islands), Alphonse group (made up of three islands), Desnoeuf, Marie Louise, Poivre, Desroches, Platte , Remire and Silhouette. As for Coetivy, it belongs to government. We only manage it. We used to own Coetivy. We ceded it to SMB for its prawn project. Initially we agreed with SMB upon a joint venture. After one year, we disagreed on an investment decision. We left the island. Some years later, SMB wound up its prawn operation and left as well. It is a sort of no man's land there.
RM: Ok, the outer islands were all loss making entities when IDC took them over. How did the turnaround come about?
GS: We improved agriculture and we were already thinking about tourism. By the mid-1980s this became a serious proposition, although many were skeptical about tourism activities. We had to convince investors that 200 km away from Mahé you can make money at a time when Praslin and La Digue were already a gold mine. I tried to encourage people to invest in a hotel on an outer island! Finally, I convinced my own board. IDC itself started with a small 10-room hotel on Silhouette and a 20- room one on Desroches. Built by IDC staff, they were in operation by 1987. We had no experience in the hotel industry but had to prove to the market that there is a potential out there. I got the idea when I went to Maldives for a conference. I saw how island hotels were beginning to mushroom there. We have better assets, bigger islands and a richer environment and marine life. I took the risk with Silhouette and Desroches. No one was interested to manage these hotels even for peanuts. We created a small company ourselves to manage the hotels, the Island Resorts. The company did so well that two years later, private groups started showing interest for our hotels. We leased the Silhouette hotel to an Italian group and the Desroches hotel to TSS. The hotels were very profitable by then and people realised that tourism on outer islands was a niche market. Today you have a 100-room Hilton Seychelles Labriz Resort & Spa owned by a Maldivian group on Silhouette. Desroches changed hands a few times. The new owners also own Four Seasons. They are spending 42 milllion dollars to renovate Desroches to Four Seasons standard. The lease allows them to go up to 60 rooms. In 2000, IDC built Alphonse Resort, a 30-room facility.
Tourism was envisaged from the beginning as a medium to long term strategy. We realised that if tourism were to become profitable, we needed to build infrastructure. Roads, telecommunications, airfield, potable water, sewage, we have been doing all that . There is an airfield everywhere except in Cosmoledo where it will be built by the end of next year. We had desalination plants on all outer islands before Mahé knew what it is about. For the last five years, we got no money from government. Over the years from 1980 to 2011, we received grants totaling only SCR77 million from governement.
RM: And, what is your net profit today?
GS: About SCR 25 million. In addition to our success in tourism, we developed competence in Building.
RM: Hence my question about your Core business. Are you specialists in all sectors?
GS: Let me go back in time. Initially we survived on agriculture. Crops cultivation and livestock rearing were improved. I introduced the raising of chickens from day-old chicks into Seychelles. Day old chicks from Mauritius were sent to our Coetivy poultry farm and we supplied the market -except the SMB.
RM: Why not the SMB?
GS: We were selling a quality product. Poultry on our farms were fed with fresh products. We sold to cold storage companies and hotels. Our products taste better. A company with a trader's tunnel vision cannot understand that. It would buy cheap chicken from EU subsidised farmers in France instead of encouraging a local producer. When finally government forced IDC to sell to SMB, I closed down the farms. I am not a trader. I produce.
From there onwards, we stopped large scale farming and produce poultry for the outer islands only. Also, I did not want to engage in something that would compete with small producers on Mahé. I am turning to specialised agriculture. On Desroches, we are growing grenadine and figs, that we supply to the hotels. We target niche markets. I must add that lack of manpower slowed down our agricultural development plan. So you see, we have to diversify. We built airports, buildings, hotels, sewage treatment, electricity and water production units. We had to engage in all sectors because no contractor on Mahé would go and work and an outer land.
RM: Sometimes you are accused of squeezing out the private operators?
GS: Have I ?
RM: Yes, you have. When you are bidding for contracts on Mahé in the construction sector, for example...
GS: Ah, it bothers a few people! Let me explain how we ended up on Mahé. Four years ago, the Ministry of Land Use and Housing (MLUH ) awarded a contract by tender to a local Chinese contractor to renovate the offices of their department of Survey . The Chinese did nothing and subcontracted it to us to complete because no other company wanted to do the job for the sum contracted. Our workmanship was so good that the ministry contracted us to renovate the rest of the ministry's building. We got the skills , so we undertake selected projects on Mahé to earn money needed for structural developments on the outer islands.
RM: By doing so, you are squeezing local entrepreneurs...
GS: If you tell me we are competing against Vijay Construction or Laxmanbhai, I say yes. If you tell me that local builders are penalised, I say absolutely not . Most, if not all, of the projects we undertake would not go to the small contractors. We set up a separate company, Green Island Construction Company (GICC) for construction activities because IDC get duty rebates on fuel so we said when we do work on Mahé we cannot use this facility. One of GICC's objectives is to help government rebuild its infrastructures. We did that with Independence House, with the hospital, etc. We went to help and sorted out problems there.
RM: Do you get these contracts after a proper Tender process?
GS: At the hospital, we obtained the first one after a tender process. Then, when other works came up, as we were on site , we were awarded the contract. We obtained the authorisation of the tender board. We never bypassed any regulation. We do everything according to law.
RM: You never obtained any favour?
GS: It could not be a favour for me in any case, because I do not own IDC. You have probably heard that I own GICC, I presume. Our success on Mahé is only due to our principle : You pay what you sign, you get on the date agreed or earlier. In this country the builders , especially the big ones, have a reputation of starting at a given price and finishing at a much higher one. One contract for a school was awarded for SCR 33million but eventually cost government SCR 45million. Sometimes the price is high and the workmanship is shoddy. These builders make money on variations. For us, the motto is : Quality on time.
RM: Yet, in a modern economy, state companies have no business constructing buildings...
GS: Ask the private builders why they never propose Public Private Partnerships (PPP) like we did. We are the only one who has done it. In Seychelles, the developers/ builders do not want to take risks. It is the same problem with our banks. PPP is a win-win situation. Consider what we did for MLUH on what was formerly their parking area. We told them that their staff do not have to be spread in several buildings and that they can have a one stop shop without spending one rupee more than they are doing now. Give us the parking area, we will design, finance and build the one stop shop they need. Over a period of ten years, you pay us a rent and the building is yours after these ten years. At the back of independence House, we excised the land used as car park. We created an investment company called Green Tree to whom government leased the land for twenty five years. We borrow the money, we build the property then we transfer it to government after ten years. Governement will get a new infrastructure without spending more money than it would spend on rent. Why does somebody else not do it instead of harping on our projects? There are so many buildings to renovate. Green Island is a development and construction company. We don't invest in lands. We have recently developed with government the Perseverance condominium. There was a market for middle class earners. We asked government to make the land available and we have built apartments for the young professionals. We will sell some luxury apartments and inject the surplus money in the seven other blocks. It is a cross subsidy that will help young professionals own a house. People get upset because we are giving first time buyers from middle income earners the opportunity to buy a house?
RM: Coming back to the Outer islands. Can you confirm that anyone can have access to any of the islands?
GS: Please ask the person who has not obtained access to one of the IDC islands to give me his name and to tell me when it did happen. If you want to go to Silhouette, it will cost you Rs 200 on the boat that Labriz operates. To help people further, we have built small guest houses and allow Seychellois to use these for SCR 500 on Silhouette, Desroches and Farquhar and Platte island. On Alphonse, guest house accommodation will be available in the next couple of months. All our islands are accessible. However, I can talk about incidents concerning people who try to go to private islands and are denied access. It is easy to make allegations. The next time somebody says Savy hides things, tell him what information I did not provide him with.
RM: Some people say you have created an empire within an empire.
GS: I am not the beneficiary of the empire if they want to call it an empire. The people of Seychelles own the asset I manage.
RM: Yet your position makes you a very influential man?
GS: What influence? If you tell me that I am respected because of the way I manage things, then I will accept. We employ a team of 1000 people composing 13 divisions with a manager in each division. The problem is that in Seychelles when somebody does something wrong, we transfer him somewhere else. We put the problem somewhere else. I do not do that. If you do something incorrect because you lack the training or experience, I organise for your training. If I find that you are malicious or a crook, a thief or a drunkard then you are out. That's all.
RM: There is a perception that you are more powerful than a minister. How far is that true?
GS: Not true at all. The problem is a simple one: because I happen to be Albert René's stepson- through no choice of mine- people have always felt that way. It is also because of my character in the sense that when I do something I do it right. When I fail, I am brave enough to pick up the pieces and organise myself. Life experiences are made up of failures before you have successes. I have known failures. Very often, people put in their minds that if they have a problem with Albert René, they will have a problem with me because I am his stepson.
RM: Does that relationship help you in your business?
GS: If you ask my stepfather about my relationship with him, he will explain to you how it was a very healthy one. When we disagreed, we disagreed. There are many things we disagreed upon. But, then, we agreed to disagree and we moved on.
RM: My point is that your family status is likely to give you an advantage when you discuss with a minister or a business man?
GS: How can you hold that against me? Did you choose whom your father is or your mother is?
RM: I am just asking if this relationship helps.
GS: Well let's put it this way : I am very friendly with some very influential people in the world, is that a problem?
RM: Yes, it becomes a problem when it gives you an unfair advantage over others.
GS: I think I have achieved what I have achieved through my competence, my knowledge, my hard work. If you go and speak to all my staff they will tell you how many hours I put in a day's work.
RM: You just said you have experienced some failures as well. Which ones?
GS: As Chairman of Fishing Authority, one of my ambitions was to own a Seychellois purse seiner fleet. It did not work.
RM: At IDC, any project that did not go through?
GS: Yes, we had challenges. We granted land leases to some developers that did not materialise despite extensions in time. We finally realised that some people asked for land just for the sake of speculation. We cancel the leases in these cases. Those who sued us lost their cases in Court.
RM: The construction of villas on some of the Outer islands has raised a few eyebrows among environmentalists...
GS: In 2007, we started building villas. Around 40 on Desroches, 15 on Alphonse and on Poivre respectively. Private developers lease the land from us, design the house and sells them. IDC is normally the building contractor for the villa. We earn income from transportation, electricity, water and sewage services as well as maintenance of the villas. No there is no danger to environment. Our Villas can only be used for personal and private use, unlike those in Eden Village. And then, a person who invest in a villa in an outer island rather than in Eden village is necessarily a nature lover who will respect the environment. We are not talking here of the tourist who travels by Tata on Mahé.
RM: So it is not in contradiction with your principle of sustainability?
GS: No it is another form of tourism. A high yield form. A villa sells for a price that varies from between 1 million and 8 million dollars. On every sale govt takes home 10 percent. We at IDC earn an average of 4000 to 5000 dollars per villa per month for services that we sell. Occupancy is less than 30 days per year. The Villas owners are people who are very environmental conscious, otherwise they would buy a villa in Eden island. They will comply with our environment norms.
RM: How do you ensure that the Platte island project will do no harm to the environment?
GS: We own 20 per cent of the company and will be able to keep an eye on everything. The Board meets regularly and IDC can monitor the project. We are conscious that Platte is so fragile environmentally. Environment is the only thing we sell. There is no casinos, no restaurants. Only the sea, the birds, the tortoises. If you don't keep that, in five years there will be nothing to sell. People are beginning to understand. If you make the same mistake as in Mahé, Praslin and La Digue, there will be big problems ahead.
RM: You don't want the Outer islands to follow the Beau Vallon model, do you?
GS: I will tell you something. I grew up on these outer islands. Both my grand fathers were owners and managers of outer islands. My father was an owner of an Outer island. When I was at university, I said I shall return to my country and work for the Outer islands.
If I had wanted to, when I came back from university, I could have taken over the islands privately owned by my father. I allowed government to buy them and worked for government to retain them because I firmly believe Outer islands should belong to the people of seychelles, not to private individuals. I could have kept these islands for myself and do what I do today, but for my profit. I didn't. The Outer islands should belong to the people of Seychelles.