Query over island sale process

The Overseas Investment Commission has been investigating why a tourism venture proposed eight years ago by the German buyer of Pepin Island, north of Nelson, has not happened.

The commission approved the island's sale in 1995 to German steel magnate Viola Hallman on the basis that she would develop three luxury tourist bungalows there.

Dr Hallman told the commission the tourism venture was intended to complement a farm on the island since the land was marginally economic for farming.

But the bungalows were never built and the commission has now been asked to explain why by Nelson resident Judith Lenart.

Nelson MP Nick Smith has also sought information on the Pepin Island sale approval process.

He was concerned about the commission's monitoring of overseas investors to ensure they did what they said they were going to do, he said.

He had sought information on 10 sales, including Pepin Island, and the sale of land on d'Urville Island to an American couple. The d'Urville case hit the headlines recently because of a dispute between the couple and some contractors involved in the development of their property.

Commission chief executive Stephen Dawe said the commission had asked for an explanation in the Pepin Island case as a result of the information requests.

It was told the tourism venture had not been deemed feasible because of the resource consent process, he said.

Instead, some existing buildings on the island had been upgraded, and were rented out to tourists.

Mr Dawe said the commission had accepted the venture had had to be modified but was still monitoring the case.

"No file ever closes. One of the monitoring processes we have depends on the general public and media drawing things to our attention," he said.

Miss Lenart said she was not satisfied with the commission's response to her questions.

When the commission considered proposals from overseas investors it had to be satisfied their purchases would serve the national interest, she said.

In this case, the primary reason given by Dr Hallman for buying Pepin Island was to develop farmstay tourism accommodation.

"From what I can see, they haven't kept their promise," she said.

Dr Hallman's farm manager on Pepin Island, Andrew Newton, said the resource consent issues relating to the bungalows included the fact that the only suitable site was in a flood zone.

He said she had instead decided to do up the two houses and two cottages on the island.

He lived in one of them, and the others were rented out.

- NZPA