S'pore firm in controversial Vanuatu airport deal

A Singapore company which landed a deal to build an airport in Vanuatu has found itself caught up in controversy, after the US$350 million (S$437 million) project hit the skids.

A change in the government of the South Pacific country saw the plan ditched, prompting its local media to speculate that the Singapore-registered Vanuatu Trade Development would sue.

The Singapore firm, however, has denied this.

The bizarre series of events started after Vanuatu Trade Development landed the contract last year to build a new airport in Vanuatu and run it for 50 years.

The company is registered here as a general wholesale firm and has no apparent aviation background. This had raised eyebrows among several Vanuatu politicians, who waged a major protest.

This prompted the setting up of an ad hoc parliamentary committee to look into the matter.

But during the investigation, Vanuatu went through a change in government and last week, the new party reportedly decided to scrap the new airport project and focus instead on upgrading the country's existing one.

Vanuatu's media then reported that the Singapore firm is suing the government for about US$30 million for breach of contract.

But Mr David Mak, managing director of Vanuatu Trade Development - which operates out of United Square in Thomson Road - has stated that this is not true.

He told The Straits Times that while the firm has heard about a "potential" cancellation of the project, there has been no official word from Vanuatu's government. It has written to the government to seek clarification but has not received a response, he said.

Mr Mak declined to comment on what action his company would take in the event of the project being cancelled.

He was also tight-lipped when asked how Vanuatu Trade Development was planning to fulfil the airport project without an aviation or construction track record.

And he refused to say whether any work had been done on the airport in the year since the contract was awarded.

According to data from Singapore's Accounting and Corporate Regulatory Authority, Vanuatu Trade Development was set up in 2012 as a general wholesale trade firm. Mr Mak is listed as a director, along with businessman Cheo Tiong Choon, who is also a shareholder in Mewah Group, which specialises in edible oils and fats with refineries and processing facilities in Malaysia and Singapore.

The link had prompted speculation that the Vanuatu airport project was backed by Mewah, but a source in the oil firm told The Straits Times yesterday Mewah is not involved in any way.

With global air traffic, particularly in the Asia-Pacific region, poised for strong growth, countries are rushing to build new airports and upgrade existing ones. More than 350 new airports are expected to be built in the Asia-Pacific region over the next 10 years.

karam@sph.com.sg

This article was first published on August 07, 2014.
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