There is a widely held notion that Governments are not good at running businesses. That’s why in most parts of the world; the Government leaves that to the private sector to do.
There are many reasons for this. One of them is bureaucratic ineptitude. Another is to avoid the Government getting into competition with the private sector that is supposed to be the engine for economic growth in any country.
In Samoa, we’ve seen several examples of why the notion that Governments are not good at running businesses holds true. All you have to do is drive up to Malifa to see a hotel that had been built by the Samoa Land Corporation a few years back.
It was obviously not working because after several years of trying, they soon realised it was not their strength so in the end, they needed to offload it. The property is now being run by a private company, which makes a lot of sense.
Now this week, another interesting development in terms of the Government getting into business unfolded. This time, the Samoa Shipping Corporation is looking at running a hotel at Mulifanua.
From the outset, the General Manager, Papali’i Willie Nansen, has emphasised the point that the hotel is to compliment the other services they provide for members of the travelling public.
“Let me make it clear this is not to compete with our local businesses, rather we want our wharf to provide the services for the convenience of our people,” he said.
Well that’s good to know. But Papali’i will find it difficult to win here. You see whatever way this will be spun, members of the business community who are already in the business of hotels will object, especially the ones at Mulifanua.
In yesterday’s Samoa Observer for instance, Owner of Transit Motel in Mulifanua, Pa’u Dr. Roy Ausage, attacked the plan as “ludicrous”.
“The statement by Samoa Shipping Corporation (S.S.C.) general manager, HC Papali’i Willie Nansen that the new bed-and-breakfast hotel is ‘not to compete with our local businesses’ is ludicrous,” he said.
“Contrary to HC Papali’i’s statement, the new bed and breakfast Hotel by S.S.C. will compete with the local businesses, unless the new facility provides free accommodation.”
“As long as the hotel charges users, it will compete with businesses around the area providing similar service.”
Pa’u has a point, a very legitimate one. We’re pretty sure other hoteliers will feel the same way. Many of them are struggling with the already low number of tourists. Some are barely able to stay afloat given the tough economic conditions of today and here we have the almighty Government making things even more difficult by becoming part of the competition.
“The Government provides ocean transportation service for our people because of the inability of the private companies to do so,” Pa’u continued.
“Similarly, the Samoa Shipping Corporation was established to provide ocean transportation service for the public. It was never set up in my opinion and without privy to the charter of S.S.C., to construct and operate a bed and breakfast hotel in Mulifanua for the traveling public. In this case, the Government of Samoa is competing with its own people and there is a clear violation of the tenets of democracy.”
By the way, the S.S.C’s remodeling project including the hotel will cost a cool $200,000 of taxpayers’ money. That’s money business people like Pa’u are not privileged to have, which makes this competition even more unfair.
Still Papali’i insists that this is the way forward.
“I mean we want to move forward like everyone else and the Mulifanua wharf is turning out to be exactly as we planned a one stop shop,” said Papali’i.
“We now have a branch of the bank, automated teller machine, stores and new restrooms. We’ve got the businesses that can cater for the needs and wants of tourists as well as waiting passengers.”
“The terminal renovations are a facelift which will further add value to our service and bring new businesses for convenience and comfort of the travelling public who will be visiting the domestic port 365 days a year.”
Well that’s fantastic but we are talking about the Samoa Shipping Corporation right? Maybe we should have a new Government body called Shipping and Hotel Corporation? The question remains, is it the best way to spend taxpayers money?
You tell us.
Have a great weekend Samoa, God bless!