Analysis

Khan’s Death A Loss For The Nation

The country has not only lost a remarkable lawyer and chief executive, but a financial management whiz.
30 Jun 2020 13:08
Khan’s Death A Loss For The Nation
Prime Minister Voreqe Bainimarama with the late Faiz Khan at the Nadi International Airport

Faiz Khan’s death is not only a loss for the Fiji Airports Limited and the Fiji Pine Group comprising Fiji Pine Limited, Tropik Wood Industries Limited and Tropik Wood Products Limited.

His death is a loss for the entire nation. The country has not only lost a remarkable lawyer and chief executive, but a financial management whiz. His business acumen saw loss making companies begin to churn out millions in profit, year after year.

Additionally, he served the Fiji Revenue and Customs Service as a Board Director (until 2019) and as a Commissioner and Proceedings Officer of the Fiji Human Rights and Anti-Discrimination Commission.

He served as a Board Director for Airports Council International Asia- Pacific since 2018.

Fiji Airports:

Fiji Airports (FA)went through a major transformation over the last seven years.

Mr Khan was the chief executive officer at the time of his death and had been the former Executive Chairman and played an instrumental role in restructuring the Fiji Airports business by making the organisation profitable and sustainable.

Through his visionary leadership, Fiji Airports had grown profits from $8 million to $80 million. Dividends paid to the Government totalled $175 million over the past six years. Previously dividends were either not paid or paid at token value of $1 million. No other company in Fiji has declared such dividends to its shareholder, particularly no State Owned Enterprise.

Fiji Airports had grown 10 fold under Mr Khan’s trailblazing leadership.

The Nadi Airport Terminal Upgrade was successfully completed, arguably one of the most complicated projects to be carried out in Fiji. The Nadi Airport Terminal Upgrade was successfully completed on April 2017, after 2 years and 8 months of construction. The Nadi Airport Upgrades were completed at a cost of $129 million. An independent study determined that a similar project of this magnitude would have cost $289 million in Australia. This massive savings was done through his foresight and vision.

Nadi Airport is now an icon for the entire Pacific. The Skytrax World Airport Awards recognised Nadi Airport as the sixth most improved airport in the world in 2018. Nadi Airport is an integral part of our economy being the main international airport and Fiji’s gateway to the world.

Following the successful delivery of the Nadi Airport Terminal Upgrades, his focus turned to Nausori Airport- the domestic hub of Fiji.

On September 19, 2018 Prime Minister Voreqe Bainimarama carried out the ground breaking ceremony for the Nausori Runway Upgrade and Extension Project. This major project is expected to be completed by 2021. Phase two will involve the construction of a new terminal for Nausori Airport.

Under his leadership, Rotuma Runway Upgrade was completed. There are no business cases for these projects but they are being undertaken to support government’s vision to improve air connectivity between the mainland and the rest of Fiji.

The Rotuma Runway Project was in the doldrums for the last 40 years designed and shelved a number of times due to challenges with its isolation and resulting cost factors. The last time it was shelved some 15 years ago a budget of $22 million plus variations was prepared for the runway alone.

Fiji Airports has delivered this project for $12.8 million with a bigger scope which included cost of new runway, consultants, fencing, fire tender, fire building etc. This achievement was in line with Mr Khan’s philosophy of prudent cost management of operating and capital expenditure.

While Nadi Airport and Fiji Airports have been recognised both locally and globally for the transformation that has taken place, Mr Khan had been responsible for shaping the success at Fiji Airports as a true leader and mentor to his people.

Under his leadership, Fiji Airports had become a successful and exemplary state owned entity. He has led the evolution at Fiji Airports since taking over the leadership reigns in 2013- record breaking financial performances and delivering complicated airport infrastructure developments that benefit all Fijians.

Yet when anyone would ask him what was the reason for his success, he always gave credit to a locally based team, empowering, improving and growing their performances. His belief was in grooming young leaders for the future of Fiji Airports.

Mr Khan’s leadership style was based on empowering the team at Fiji Airports through continuous growth and improvement. He had four habits that he stated as being instrumental in the transformation of the organization.

1- Budgetary mindset versus stretching the dollar for value

Early on during his tenure, the budgetary mindset was abandoned and adopted the approach to test every dollar that was spent. Such an approach came through taking more risks, sleepless nights and hard work but it has potential to yield unprecedented results, due to greater sense of ownership.

2- Proactively driving progress

He built a pursuit of proactively driving progress. It allowed the team to put aside the 8 to 5 type mentality that existed in the past and to focus on how to make things better. ‘Drive Progress’ was the slogan that was reminded to his people every day as it sat on the screen savers of their personal computers. It is now part of their KPI.

3- Win/Win Outcomes

Carrying out successful exercise of not just negotiating numbers during revenue restructure but understanding and recreating business models where there was something in it for everyone – a state of balance between the tenants (at the airport), the airlines and them as the landlord (FA) were all happy because of the win/win outcomes.

4- Beginning with the end in mind

Six years ago he knew what the organisation wanted to achieve at the end of the restructure- to build world class infrastructure. Fiji Airports needed money to support their network of airports in Nausori and Outer Islands that were non-profit making; yet served an integral part of their shareholder Government’s vision for connectivity and betterment of our people living in isolated smaller islands.

Mr Khan’s leadership had enabled Fiji Airports team to become a lean and mean machine. He had taken out the shackles of hierarchy that existed in the past to create an environment for open door communication. This allowed effective communication through the ‘top-bottom’ and ‘bottom-top’ approaches.

Fiji Pine Group:

Mr Khan was Executive Chairman of Fiji Pine Group comprising Fiji Pine Limited, Tropik Wood Industries Limited and Tropik Wood Products Limited since 2011.

Mr Khan graduated from Bond University, Australia in 1999 with BComm (Acct/Fin); LLB. He had past experience in his family logistics and transport business. He also had vast experience in legal practice having practiced full or part-time as a barrister and solicitor since 2000.

Mr Khan during his tenure as Executive Chairman turned around the Pine Industry from a state of bankruptcy to a financially sound organisation recording record profitability levels and bringing back substantiality of the industry.

In his tenure over the last 7 years:

Pine Industry has been transformed and has resulted in record profits. Around 10 years ago in 2008 Fiji Pine’s financial position was so bad that it used to borrow from money-lenders every Friday to pay wages to its employees.

Pine Industry paid debt of $50m. These debts included European Investment Bank loan borrowed in 1986 plus debt to local financial institutions like FDB, Westpac and FNPF. Today the Fiji Pine and Tropik for all intents and purposes is debt free, with the only debt being the interest free Government debt balance amounting to $7m borrowed between 1990 to 2001, that Fiji Pine is now repaying. The loans have not been re-financed. They have been paid off from operational cash generations.

Fiji Pine has rebuilt trust with the landowners. The renewal of 26,575.90 hectares of expiring leases in the last 7 years is testimony to the rebuilding of that trust. For more than a decade prior to 2011 landowners refused to renew their expiring leases.

In return Fiji Pine repaid the trust by giving returns and bonuses to landowners. Until 2012 landowners did not receive any returns from the operations and profitability of Fiji Pine and Tropik.

2013 was the first year when landowners received this return with a humble sum of $347,440. This is what Mr Khan’s leadership led to.

In 2018, the return to landowners increased to a whopping $7 million. Lease rental has been increased from $4/hectare in late 90’s to $13/hectare now. Stumpage has been increased from 3 per cent in late 90’s to 12 per cent now.

Fiji Pine has replanted 14,764 hectares of land with pine. By doing so Mr Khan was re-building the future of our landowners and their future generations. Prior to that no replanting was done for over a decade.

Fiji Pine and Tropik are the only entities in the Pacific Islands that are Forest Stewardship Council (FSC) certified for its sustainable and best forestry practices. This is international recognition by an independent body.

Fiji Pine’s factory capital with its subsidiaries in Tropik Wood Industries Ltd and Tropik Wood Products Ltd are “state-of-the art”.

The old and obsolete factory machinery has been entirely replaced. There are factories in Australia and New Zealand that do not have such facilities.

These Fiji Pine factories are free of encumbrances.

All together $60m of upgrade of new factory such as the state-of-the-art sawmill line in Drasa was built with operational cash flows generated without a single cent of borrowing.

Tropik continued to upgrade its factory capital with a 5-year plan led by Mr Khan, without borrowing.

This is the legacy of a strong visionary leader, who at the prime age of 43 had achieved a lot more than many who only sit behind keyboards and run their mouths. Mr Khan touched lives, he changed lives. His legacy lives on. We salute a true son of Fiji who would have earned a lot more overseas but gave it all up to give back to his country.

Feedback: jyotip@fijisun.com.fj



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