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TONGA PEOPLE’S REPS. REVERSE COURSE ON SHORELINE Buying back power company won’t benefit people of Tonga

By Pesi Fonua

NUKU΄ALOFA, Tonga (Matangi Tonga, June 23, 2008) - In an abrupt about-turn in a three-year long confrontation with government, challenging the privatization of Tonga’s power generation facility, two People’s Representatives have told parliament that now they don’t want the power generation to come back to the public ownership by government.

Out of the blue on Monday June 16 ‘Uliti Uata, a People’s Representative for Ha’apai, told the House that the buying back of the power generation and distribution facilities from Shoreline rendered "no benefit to the people of Tonga."

‘Isileli Pulu, a People’s Representative for Tongatapu, in the same instance said that they "did not want the power generation back" only the power distribution facility, which he claimed was illegally transferred from the Tonga Electric Power Board to Shoreline Power.

In the new government budget for 2008 to 2009, 25 million pa’anga [US$12 million] has been allocated toward buying the Shoreline Power’s generation and distribution facility.

The about-turn by ‘Uliti Uata and ‘Isileli Pulu in the House last week appalled the Prime Minister and left other MPs shaking their heads in disbelief.

In 2005 there were main street demonstrations and a petition to the king in protest over the privatization of the power supply. The People’s Representatives’ collective and long standing criticism of the acquisition by Shoreline Power of Tonga’s national power generation and distribution led to demands for the government to buy back the power facility; and last year the House voted for legislation that will bring the power facility back into public ownership.

‘Isileli blamed the Prime Minister for discouraging himself and other PRs from suing Shoreline. He said the fact that the Prime Minister abstained from voting in 2004 on the power issue had caused problems.

‘Isileli was referring to a case that was eventually brought by other people who won an undisclosed private settlement in 2005.

The Prime Minister, Honorable Dr. Feleti Sevele denied ‘Isileli’s allegation, and was appalled the sudden change of mind by the PRs. He said that a five-member Cabinet committee had met twice with the PRs and agreed that government should buy back the electric power facility from Shoreline Power. Shoreline had also agreed to the sale.

He told the House that during the past two to three years, government had been working toward buying back the power from Shoreline. Last year a Bill for Electricity was passed by the House, and in the new government budget for 2008 to 2009, 25 million pa’anga had been allocated toward buying the Shoreline Power’s generation and distribution facility.

The Minister of Finance, Afu’alo Matoto told the House recently that the 25 million pa’anga will come from the sale of the government’s shares with Westpac Bank of Tonga. The government holds 40 percent of shares in Westpac Bank of Tonga.

The total value of the Shoreline Power electricity generation and distribution facility was valued at US$26 million by Pricewaterhouse, when an initial sales deal was negotiated between the Tonga government, Shoreline and Northpower of New Zealand. Northpower was going to take over the running of the power facility but dropped out after the riots of November 16 destroyed the Shoreline offices.

Last week’s about-turn is not the first to be made by People’s Representatives on the power issue, in a debacle of deals largely hidden from the public view.

In 2005, after challenging the privatization of the power supply a group of 25 people including parliamentarians and members of the People’s Democratic Party (PDP) won an undisclosed deal in out of court settlement, in a legal action presented by Clive Edwards.

The terms of the out of court settlement and who benefited have never been revealed.

On March 14, 2005, the Matangi Tonga Online ran a story that in a protest march led by three candidates for the General Parliamentary Election, Semisi Tapueluelu, ‘Alani Taione and Filini Sikuea, about 50 demonstrators marched down the main street of Nuku’alofa, protesting about the privatization of Tonga’s electricity supply.

After presenting their petition to the King, the demonstrators then marched to the Supreme Court where Clive Edwards one of the legal counsel representing the 25 plaintiffs filed a writ against the Tonga Electric Power Board and Shoreline Power.

The plaintiffs claimed that the Tonga Electric Power Board did not have the legal right to lease its power generation facility to Shoreline Power. At the time Clive Edwards said that the TEPB was given the right to generate electricity but not to lease to anybody else and he argued that because the action taken by the TEPB was illegal, the power generation should be returned to the TEPB.

But by May 18, 2006 the president of the People’s Democratic Party, Teisina Fuko revealed that Shoreline Power and the Tonga Electric Power Board were negotiating with the PDP counsel for a settlement out of court. (Clive Edwards had by that time won a seat in the House in the May 5, 2005 ByElection.)

Teisina told the Matangi Tonga at the time that the reason why they agreed to negotiate for a settlement out of court was because Government feared that if the PDP insisted on a court hearing, "Shoreline might feel threatened and pull out all its power investments such as power generators and transformers and sell it to some company overseas and because Government clearly has no money at present to buy back the power, the people might be left with no power for a long period of time.

"We believe this is the most reasonable and right thing to do for the people of Tonga, and we are definitely not betraying the people by backing out, we feel this is the right thing at this point and because it is a legal matter we are limited only to the point of law," he said at the time. (See: Shoreline negotiating out of court settlement)

To this day the public do not know what was the settlement. Matangi Tonga Online was told by the court in 2005 that with out of court settlements only the legal counsel know the details.

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