Yihai Smart City: Chronicle of a Multi-Billion Dollar Failure
Title: Yihai Smart City: Chronicle of a Multi-Billion Dollar Failure
Content: The arrest of developer Li Hai on suspicion of money laundering casts a definitive shadow over Yihai Smart City. Nine years after its launch, this multi-billion Mauritian mega-project, plagued by design flaws and controversies, has ground to a halt.
Following the arrest by the Financial Crimes Commission (FCC) of Chinese businessman Li Hai, president and main shareholder of Yihai Investment Ltd (Mauritius), Yihai Smart City faces yet another setback. This apprehension, driven by suspicions of dubious financial transfers and money laundering, comes as one of the most ambitious smart cities in Mauritius has been struggling with a series of structural, administrative, and judicial difficulties for nearly a decade.
Located in Domaine Les Pailles, the project occupies around 97 acres (40 hectares) of land acquired in 2017 from the State Investment Corporation (SIC), which is wholly owned by the state. It aimed to combine upscale housing (apartments, duplexes, villas), offices, retail spaces, a hotel, a conference center, and extensive green spaces while preserving certain historical buildings within the domain. The primary target audience was predominantly Chinese.
The announced total investment fluctuated, according to different periods and promotional documents, between 12 and 21 billion Mauritian rupees.
The initial timeline planned for development in three phases, with the first phase (1A) focused on constructing prototype villas and basic infrastructure. A Smart City certificate was issued by the Economic Development Board in October 2019, and an official launch ceremony took place on July 11, 2021, attended by then Minister of Commerce, Mahen Seeruttun.
However, as early as 2016, the project had been marred by a significant controversy. The former Minister of Good Governance, Roshi Bhadain, publicly denounced "dark areas" in the land allocation process by Yihai Investment Ltd. The ministry then referred the case to the Independent Commission Against Corruption (Icac) under articles 43 and 44 of the Prevention of Corruption Act, resulting in a temporary halt to the project. Although work resumed after obtaining a letter of intent and then the Smart City license, this investigation has permanently tarnished the project's reputation.
"Manifest Errors of Design"
Nine years later, progress remains far below promises. Instead of the promised luxury villas and apartments, the site is still a vast construction zone. Sales have not picked up, and promotional efforts are nearly at a standstill. The last update on the smart city's Facebook page dates back to April 7, 2025.
On May 17, the Deputy Prime Minister Paul Bérenger, accompanied by several government members and Landscope Mauritius (which manages the neighboring industrial park), observed a degraded site. He noted "manifest errors of design": a block of apartments and four unsold luxury villas located immediately near the Swami Vivekananda conference center, where loud concerts are regularly held.
"Certain business decisions by the developer are, to say the least, puzzling," he highlighted, referring to perceived excessive prices and unsuccessful tenders. The government, which holds a 49% stake via SIC (51% owned by the Chinese group), announced that it would decide on the future of the apartments and the overall project after reviewing a technical report.
On-site images reveal a few completed villas, some unfinished foundations and structures, but none of the main commercial or hotel avenues operational.
Li Hai's arrest on Wednesday, followed by his release on bail, adds another layer of uncertainty. The provisional charges involve fund movements deemed suspicious by the FCC, and an investigation is ongoing. This event rekindles questions about the governance of the project and the developer's ability to successfully carry out such a large-scale development.
Yihai Smart City remains theoretically listed among the 19 projects certified under the Smart City Scheme. While the government considers potential corrective measures or partial takeovers, Domaine Les Pailles continues to await the promised smart city nearly ten years ago.