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NUKUALOFA, Tonga (Matangi Tonga, May 25) – The Chairman of Shoreline Power, Tongan Crown Prince Tupouto'a, today offered to return Tonga's electric power operation to the government in return for a settlement of an amount to be assessed.

Shoreline took over power generation, distribution and transmission from the Tonga Electric Power Board seven years ago.

Soane Ramanlal, the Chief Executive Officer of the Shoreline Group of companies, said at a press confernce today that the unilateral decision of the Crown Prince to return the power operation to government was because of "the unprecedented escalation of antagonism against Shoreline's involvement in the generation and the distribution of power in the Kingdom."

Soane said that for Shoreline to hand back the power operation to government before the expiry date of its 20-year agreement (ten years, with an option of ten years renewal) with the Tonga Electric Power Board (TEPB), Shoreline expected Government to pay Shoreline for all the investment it had made on power stations in Tongatapu, 'Eua, Ha'apai and Vava'u.

Soane said that if government accepted the offer that has been made by the Crown Prince today, then Shoreline would like government to bring in reputable evaluators to assess the total investment that Shoreline has made during the past seven years, and their figures will be what Government has to pay Shoreline.

Soane did not want to put a figure on Shoreline's total investment; "Let's wait for the evaluators to complete their assessment," he said, but he said that to date Shoreline has made an investment of about 30 million Tongan Pa'anga (US$15.8 million) on power generators.

He said that they also had made substantial investment on distribution and transmission. He said that the settlement of loans that Shoreline has taken to buy these generators and other power generation activities must also be taken into account.

Soane said there was no time limit when government should respond to Shoreline's offer but, meanwhile, Shoreline will continue with the operation.

He said that as he was talking workmen were installing a new 8 million paanga (US$4.2 million) generator at the Nuku'alofa power station.

When Soane was asked about other possible solutions to the antagonism against Shoreline, such as a renegotiation of the agreement between Shoreline and the TEPB, he said that it was possible. He said that they paid TEPB a fixed amount every month for their licence, he did not want to reveal the amount, but with regard to the price of electricity he did not think there was a chance of it coming down because of the escalating price of oil in the world market.

Meanwhile, a protest march against Shoreline is set for tomorrow, despite attempts by the Prime Minister's Office this week to discourage protesters from marching on the same day as the opening of parliament. The public complaints against Shoreline had escalated this year with the revelations by a former employee that the executives were paid massive salaries, while power prices were increasing, and the public utility company carried large loan liabilities.

May 26, 2005

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