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Airport opens up opportunities on St. Helena

See gallery. Tiny British colony open for business.

Investment on the island of St. Helena will be a hot topic in Cape Town next week, during a visit of Mark Capes, governor of St. Helena, neighbouring Ascension Island and Tristan da Cunha.

The island, situated in the middle of the Atlantic Ocean and more or less on the same degree of latitude as Luanda, is mainly accessible only by a four-day boat trip from Cape Town once a month.

Its days of isolation are however numbered.

South African construction group Basil Read is currently building St. Helena’s first ever airport and air access is expected to make all the difference.

The airport is expected to be ready in early 2016 and will open the island up for business. The St. Helena government is planning £24 million of infrastructure upgrades in the next few years in anticipation of air access. This includes electricity, water, sewage, a new wharf at Rupert’s Bay and better connectivity.

The key question now, is where flights to St. Helena will embark from. No decision has yet been taken whether flights will be from Johannesburg or Cape Town. However, the St. Helena airport will be operated by the same operator as Lanseria.

Governance, opportunites

St. Helena is a British overseas territory and English is the language spoken on the island. The currency is St. Helena Pound, which is interchangeable and on par with British Pound. St. Helena law applies, based on British Law.

About 80% of the land belongs to the island government. Freehold of up to two acres is available without any licence and bigger pockets on lease of up to 150 years.

The St. Helena government is determined to manage the island’s development in a sustainable way.

It offers several incentives including early tax breaks, zero customs duty, corporate tax and capital gains tax for seven years on investments over £1million and below £5million. For bigger investments the term is extended to ten years. Investments of more than £1million will attract a 50% discount on freight rates and those bigger than £5million also qualify for a 50% discount on passenger rates. St. Helena has no exchange control, sales tax or property tax and also no visa requirements.

Opportunities are mainly focussed on tourism, fishing and services, says Julian Morris, executive manager economic development of Enterprise St. Helena, the NGO established to promote economic growth and funded by the St. Helena government and the British government’s Department for International Development (DFID).

High value, low volume tourism is envisaged and a decision has been taken to cap the number of visitors per year at 30 000. See the graph below on who is expected to visit.

Extensive research has shown opportunities in especially heritage and culture tours. The island’s link to Napoleon is a huge point of interest. Bird watching, gaming, fishing and diving, and to a lesser extent astronomy are other niche tourism markets targeted.

On the fishing side, St. Helena has a 200 mile exclusive zone where it controls marine resources and tuna stocks are largely untouched. Fresh and frozen tuna provide opportunities as well as sports fishing, says Morris. The St. Helena government will next week be in serious talks with prospective hotel investors and parties interested in establishing a fish processing plant.

The island government is looking for hotel developers and discussions with the Mantis group and St. Helena Leisure Company on two five star hotels, one with a golf course, are at an advanced stage. At least one South African hotel group is interested in building a £8 million three or four star hotel. Investments are also sought in new boutique hotels.

Supply chain

Interested parties will also be able to get more information during an event hosted in Cape Town in conjunction with the Western Cape Destination Marketing, Investment and Trade Promotion Agency (Wesgro).

The supply chain and services to the fledgling economy need to be established and opportunities abound. Advertisements will go out for a hospitality trainer shortly, to up-skill islanders, also known as Saints. It will be a one-year contract.

The current supply line from the city, the RMS St. Helena, has significant economic value, says Nils Flaatten, CEO of Wesgro. The RMS will be decommissioned in 2016. Morris earlier said the RMS St. Helena alone, is worth £20 million for Cape Town per year. That includes island supplies, mostly purchased in Cape Town. Islanders also come to the Mother City for advanced medical treatment and the total value of the St. Helena to the Cape Town economy might be much more.

Flaatten says Wesgro is pro-actively fighting to retain all or a large portion of St. Helena’s business. “We have regular engagement with the St. Helena government and are assisting them with their interaction with investors”, he says.

A request for proposals will be issued next year for airline operators to service the route, he says. That process will determine the exact route.

• I visited St. Helena earlier this year as a guest of Basil Read. The island is extremely mountainous with narrow paths criss-crossing its 122 square kilometres. Jamestown is the business hub and can be compared with a small rural town in South Africa. There is one bank on the island, no ATMs, no estate agent signs, no vehicle dealerships.

Shops are few, since almost everything is imported – clothes, furniture, vehicles and even fresh fruit and vegetables. The geography is varied and includes barren parts with hardly any vegetation as well as rain forests. The 4 000-odd islanders are extremely friendly and seemed quite laid back. The tourism positioning “one of the world’s last remaining ‘undiscovered’ places” is exactly how I would describe St. Helena.

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