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NUKU΄ALOFA, Tonga (Matangi Tonga, Oct. 22) - Tonga’s government this evening committed to a US$58 million concessional loan from China to help with the reconstruction of Nuku΄alofa's Central Business District, using a Chinese leading contractor.

It is understood that negotiations are continuing between China and Tonga for a sharing of jobs available from the reconstruction.

The Memorandum of the Framework for the RMB $440 million [US$58.7 million] loan from the government of the People's Republic of China, was signed in Nuku΄alofa at 5 p.m. by Tonga's Prime Minister Dr. Feleti Sevele for the Tongan government and Zhang Ye Sui, the Chinese Deputy Minister of Foreign Affairs for the Chinese government.

Sevele said that the Concessional Loan is from the Chinese government to the Tongan government, and that the government was very grateful to China for the Concessional Loan.

"The loan will be lent out to those, who are affected [by 16/11] and who are able to repay it and the government will ensure that it takes security of whatever building that goes up and also on the land."

He said the details of the loan will be worked out between China and Tonga's Ministry of Finance.

The signing of the loan from China took place at the new Convention Centre at Fasi that was funded by China and used for the first time by this week's Pacific Leaders Forum meeting.

Sevele did not discuss the extent to which the Chinese will be involved in the reconstruction but mentioned that discussions had begun with a Chinese lead contractor.

"It's normal for loans from donor countries to have the lead contractor from the lending country," he said.

"There will be some people from China, but we hope there will be a sharing of jobs available from the reconstruction between China and Tonga and that is being negotiated at the moment."

He added that the Wesleyan Church, owner of the Tungi Arcade site, was one organization that had decided to take advantage of the loan and were now negotiating the terms and conditions.

"We expect the construction from this loan, for those who want to avail themselves of it, they should be up and running by the end of the year or the beginning of next year," he said.

"The thing is Nuku΄alofa was burnt down or parts of it last year, the only donor who was ready at hand to lend on concessional terms was China," he said.

Feleti Sevele also pointed out that both Australia and New Zealand have given grants of several million pa'anga to help businesses rebuild.

"Yesterday, Helen Clark announced a grant of $4 million towards the reconstruction. Prior to that [Alexander] Downer in July gave us $5 million," he said.

Funds will also be available for infrastructure work and there is an agreement with the Asian Development Bank for funds for the reconstruction of roads sewage, and drainage within the urban areas including the CBD.

"If it is not sufficient we will look at borrowing from either this fund or other sources," he said.

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