Ningbo entrepreneur tells of difficulties in developing uninhabited islands

An excavator working on the latest development on Dayangyu Island on Aug 7. PHOTO BY SHI XIAOFENG / CHINA DAILY

Almost three years ago, Yang Weihua successfully bid for the 50-year rights to an uninhabited island in Zhejiang province.

With her 20 million yuan ($3.26 million) bid, Yang became the first tenant in an inaugural batch of 176 uninhabited islands that the country approved in a novel move to attract domestic and foreign investment for development in 2011.

Yang, the general manager of Ningbo Gaobao Investment Co, remembered she could hardly contain her excitement when she won the rights to Dayangyu Island.

But the buzz she felt from "owning" such an unprecedented piece of property is fizzling out, just when construction on it rolls out.

"You think having an island means cruising on a yacht, sipping cocktails on your private beach and lounging in a villa with an ocean view? Thats what happens in Hollywood movies," Yang said.

"For me, I never imagined that developing an island could be this difficult."

Yang bid for Dayangyu on Nov 11, 2011, in an open auction. It was not until March 2013 that she received the certificate of her rights to the island, which meant she could finally start construction on it.

"Getting approval for development plans from all levels of government departments took such a long time. I guess the country does not have standard regulations on island development yet," she said.

Dayangyu is in Xiangshan county of Ningbo. It covers an area of 265,000 square meters with a coastline of about 3,000 meters. It combines three uplands and two natural beaches.

Its shortest distance from the mainland is 300 meters.

Under Xiangshan regulations, only 25 percent of Dayangyu can be used for buildings. The rest of its land must be kept in its original condition.

Yang planned to build a yacht club and boutique hotel with 500 million yuan.

When construction began on May 25, Yang realized that 500 million yuan might not be enough.

"The islands natural features can not only slow down building, it can also add to costs," she said.

Although the island is close to the mainland, ships are still needed to ferry workers and construction materials.

"We have to wait for suitable tide condition to transport materials. Items like bricks might be broken or damaged by the time they get to the island," she said.

The construction was scheduled to be complete by the end of next year, but Yang said she is not sure if that is possible.

July to September is typhoon season. Facing the East China Sea, Xiangshan can bear the brunt of the storms.

When typhoons hit, all construction must stop and workers have to seek shelter on the mainland.

"It is all up to nature," Yang said.

Staying afloat

Keeping the development afloat after it is completed is another issue.

In 2004, Chen Xiaoxian, general manager of Dongtou Huyu Oceanic Resource Development Co, signed a lease with Dongtou county to develop its Zhuyu island in Wenzhou.

Chen invested 30 million yuan in the island to build a vacation spot. Most of the investment was for infrastructure construction. But the development operated for only half a year and the income could barely cover annual maintenance costs.

When her five-year lease ran out, Chen called it quits. She said that Chinese tourists were not ready for island-style vacations.

"Developing an island is not for everyone. Only those with big dreams and large amounts of cash - at least 100 million yuan - can handle it," she said.

Government dilemma

China has more than 6,900 islands that are larger than 500 sq m and 90 percent of them are uninhabited.

Among the first batch of 176 uninhabited islands approved for private development, 31 are in Zhejiang. But of those, only Dayangyu Island has been leased out.

Developing these islands can also be a challenge for local governments. On the one hand, they want to attract investment to the islands. One the other hand, their strict rules toward such development scare investors away.

Yu Mingquan, deputy director of the Xiangshan ocean and fisheries bureau, said that although the county has the largest number of uninhabited islands in the province, only two of them have their ownerships leased out.

"I receive phone calls every day on queries about purchasing island ownerships. But very few of them have clear ideas of what they want to do with the island," he said.

Yu said that the county has strict regulations on developing these islands.

"The owners should have clear plans about developing the islands, and those in turn must meet our plan for the whole area. We will not approve ownership if someone merely wants to have an island and build something of their own," he said.

If an island is leased out but does not develop in three years, the local government has the right to take it back, Yu said.

"We are not offering the islands for personal use. Our hope is to use private capital to develop these islands, but they have to keep the original shape of the islands," he said.

Protection is the top priority for the uninhabited islands, Yu said. Only investors with a well-balanced protection and development plan can be considered for the leases, he said.

Cui Wanglai, a professor with Zhejiang Ocean University who studies the development of uninhabited islands, said that apart from natural factors, the biggest problem for private investors developing these islands is poor access.

"Dayangyu Island was taken because it is only several hundred meters away from the mainland. Electricity, telecommunication cables and clean water pipelines can be easily connected. But some islands are thousands of meters away, which make costs much higher," he said.

Currently, most uninhabited islands in China lack basic facilities, including docks, electricity, water and telecommunication cables. Setting up these facilities on the islands can cost up

LINK:	http://en.nbwh.gov.cn/art/2014/8/20/art_1325_58586.html...
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