Following Fiji Water’s decision to close its factory in the country, Prime Minister Commodore Voreqe Bainimarama has stated that if Fiji Water no longer wants to operate in Fiji, it must inform the Director of Lands and Yaqara Pastoral Company Limited from whom Fiji Water has leased the land.

Commodore Bainimarama said the government, following the cancellation of the leases, will call for international tenders from credible and reputable private sector companies to extract this valuable resource.

The Prime Minister said as usual Fiji Water has adopted tactics that demonstrate that it does not care about Fiji or Fijians.

He said Fiji Water has made statements about supposed instability in Fiji and know it is not true, yet do so because they simply do not want to pay the new Water Resource Tax.

Fiji Water yesterday announced the closure of its factory in Fiji stating the increase in the Water Resource Tax announced in the 2011 National Budget is untenable and as a consequence, Fiji Water is left with no choice but to close its facility in Fiji.

In a statement from their headquarters in Los Angeles, Fiji Water President and Chief Operating Officer John Cochran said they are saddened that they have been forced to make this business decision.           
Fiji Water currently pays one third of a cent for a litre of water as Water Resource Tax.

The government announced in the budget that companies extracting more than 3.5 million litres of natural water in a month will have to pay 15 cents per litre as Water Resource Tax.

Fiji Water falls in this category.

Commodore Bainimarama said the Fiji Government remains firmly committed to both international and local investment in Fiji.

The Prime Minister said Fiji Water has had a corporate tax holiday since its inception until only two years ago, it has paid less than a million dollars in total corporate tax and only in the past two years, it received approximately $FJ4 5 million in VAT refund annually given it is export driven, despite being a premium boutique water product, it declares the selling price of a carton of water at $US4 when at the same time other relatively unknown brands from Fiji like Aqua Pacific declare their selling price to the US market at $US10 a carton.

Commodore Bainimarama said Fiji Water sells its water to a US sister company and therefore is engaged in transfer pricing.
 
The Prime Minister said that the positive feedback from the recent Fiji Australia, Australia Fiji, NZ Fiji and Fiji NZ business council meetings on the Budget, and the new investment inflows and interest, is indicative of the affirmation of, and confidence in Fiji and the Fijian economy by the private sector.

Meanwhile, Cochran has also announced that Fiji Water is putting on hold several large construction contracts in Fiji, including the renovation of Drauniivi Primary School, a $300,000 project and the resurfacing of the Naikabula Yard worth $1.6 million.

Fiji Water said it will also be forced to cancel all contracted engineering and support services as well as their purchasing of cartons from Golden Manufacturers.

It said all ongoing purchases from local suppliers will have to be cancelled.


Story by: Vijay Narayan