NRA asset, but are the responsibility of the developer to build.
The same thing usually applies to Fiji Electricity Authority reticulation within the development.
FEA will take control of the reticulation immediately and charge owners for the power they use and will return the construction cost to the developer after a period of seven years,
Another area of concern and rising cost is the need to use a number of different contractors to complete the development.
The civil engineering for a land development is usually a very significant part of the total cost and in many cases exceeds the initial purchase price of the land.
In almost every case the developer will need to appoint a number of different contractors who own and operate the heavy equipment that is used to fill and reshape the land.
A sudden, large upturn in activity in land development will cause an increase in the rates charged by contractors for their work.
This is further exacerbated by the increased demand for fill material and the increase in labour cost because of the demand for more workers as the total number of developments increases.
Risks in commercial funding
Almost every development in Fiji is financed by commercial funding and this is another area where the developer is at risk.
Funding is becoming expensive as demand from developers increases, the funding providers are becoming very risk averse against a possible over supply in the market and impose very rigid conditions, including rigid timelines.
Because of these issues, particularly the interest component of the financing, it is important to the developers bottom line that the development is completed to deadline (and if at all possible before deadline) to keep the financing costs as low as possible.
There is constant pressure on the developer, and through to the contractors, to continue to perform against tight deadlines.
Delays in the provision of mandatory approvals and delivery of material on site can causes a run-on effect and delays in completion, so developers must be constantly on guard to minimise impact delays could have.
Not for amateurs
Land development is not (as it was often in the past) an area where amateurs can play around in their spare time and end up with a reasonable profit.
It is also certainly not an area for the faint hearted to consider because, while the rewards for the successful operators can be attractive, the potential for losses is always just a moment of carelessness away.
But it is equally sure that if Fiji is to continue to grow the tourism industry and the overall economy it can only do so on the backs of the developers.
It is for this reason that Government is committed to assisting those who are prepared to get stuck into the land development business and open up new land and new resources.
Some time ago the A-G floated a concept to closely link the approving departments and monitor delivery.
This was a worthwhile idea and would help the main issue developers face.
Development activity must increase now if the future of tourism growth is to be ensured.
This article was authored by John Ross and originally published in the Fiji Sun on February 10, 2018.