BORA BORA FERRY GRANTED FUEL TAX EXEMPTION

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‘King Tamatoa’ to operate among Leeward isles

PAPEÉTE, Tahiti (Tahitipresse, Feb. 25, 2010) - The Tong Sang government has approved a decree allowing the controversial King Tamatoa fast ferryboat to begin Leeward Islands rotations starting March 5 with no fuel taxes.

The decree accepted shipowner Bill Ravel's request for a yearly diesel fuel and oil quota for the 983-passenger vessel at a government-controlled fuel price of 60 French Pacific francs per liter. That is the equivalent of US$2.64 a gallon.

The fuel tax exemption will save the King Tamatoa 641.21 million French Pacific francs (US$7.5m/€5.4m) in taxes yearly, according to the government's decree.

[PIR editor’s note: The largest of the nine Leeware Islands include Raiatea, Bora Bora, Huahine and Tahaa.]

However, there was no immediate public reaction from Ravel or the SAS Raromatai Ferry company created to operate it.

"The King Tamatoa can begin its rotations as scheduled, starting March 5," French Polynesia President Gaston Tong Sang, previously a strong opponent of the project, announced during a Wednesday afternoon press conference.

The government's action came after an opposition political leader filed on Monday legislation that would exempt the just-arrived King Tamatoa from fuel taxes and grant it a 10-year profits tax exemption as long as the Leeward Islands rotations continued uninterrupted.

President Tong Sang referred during Wednesday's press conference to that proposal made by Jean-Christophe Bouissou, leader of the opposition group la Oa te Fenua in the French Polynesia Assembly.

"I am unable to grant the tax exemption; there's no such text," Tong Sang said. This was an apparent reference to Bouissou's legislative proposal for a 10-year profits tax exemption.

Tong Sang said Bouissou is still free to take his measure to the assembly for a vote.

Tahiti's president, with only a one-vote majority coalition in the assembly, is mayor of Bora Bora and has a strong political base in the Leeward Islands where there is big support for the fast ferry.

President Tong Sang and Bouissou agreed that the King Tamatoa, which can also carry 250 motor vehicles, should not be considered a cruise ship. Instead, Tong Sang told the press conference, it was previously granted a ship-owner's license that he can maintain. That license was granted by the previous Temaru government, but without any tax exemptions.

In passing, Tong Sang told the press conference that as far as the King Tamatoa having the same fuel fares as its direct competitor, Air Tahiti, the regularly scheduled inter-island airline pays 70 French Pacific francs per liter, while ship owners pay 60 French Pacific francs.

The Council of Ministers' decree adopted Wednesday allows the King Tamatoa to due a trial voyage before March 5. The decree allows the vessel a tax exemption for a maximum 13.7 million liters of diesel fuel and 18,212 liters of oil for the rest of 2010, beginning March 1.

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