Iceland warms to Chinese tycoon's Arctic hotel plan

PUBLISHED : Saturday, 05 May, 2012, 12:00am
UPDATED : Saturday, 05 May, 2012, 12:00am


A Chinese tycoon appears closer to realising his dream of building a luxury resort near the Arctic after coming to terms with Iceland's government over the leasing arrangement for a frozen chunk of land.

Huang Nubo had tried to buy 300 square kilometres in the remote northeastern area of Grimsstadir in November, but legal restrictions on foreign ownership of land and local protests scuppered the project.

A spokeswoman for Huang's company, Zhongkun Investment Group, said it expected to reach a leasing deal with the Icelandic government next month.

The size of the plot, the length of the lease and its cost, measures to protect the environment and local hiring had been finalised, said Yao Chen , Huang's assistant and spokeswoman. 'We look forward to a signing ceremony in June,' she said.

Iceland's national radio RUV reported on Wednesday that Huang had agreed a lease for 70 per cent of the 300 square kilometres for 40 years. The luxury resort project - which will include the hotel, a golf course and outdoor facilities - calls for an investment of US$160 million and will create between 400 and 600 jobs. The resort would target wealthy Chinese tourists, the report said.

But Yao declined to confirm the numbers, saying details were subject to changes amid negotiations. 'After rejecting our offer to buy the land last year the Icelandic government has been approaching us non-stop with alternative options such as leasing. In fact, e-mails have been exchanged every week,' she said.

The company was surprised by the RUV report as the parties involved had agreed to keep the terms secret until the official signing.

After his initial offer was rejected last year, Huang blamed an anti-Chinese prejudice among Western governments. Xinhua even ran a commentary on its website, calling the incident an injustice and a collective effort by the West to demonise China.

The company said at the time that it would consider other options and that Finland, Sweden and Denmark had expressed interest.

Huang could not be reached for comment yesterday. But he told China National Radio on Thursday that the company would lease the entire site for 99 years and the total investment would be greater than reported.

'Icelandic law only allowed land [to be leased to foreign entities] for three years. For our project, its parliament passed a new law raising the limit to 99 years,' Huang said.

Over five years, the company plans to spend US$200 million to build a 100-room hotel offering golf, horse-riding and hot-air ballooning.