Fiji Opposition: Infrastructure Loan From ADB ‘Deceptive’

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$100 million loan not included in recently passed budget

By Vuniwaqa Bola-Bari

SUVA, Fiji (Fijilive, Dec. 14, 2014) – Fiji's Opposition Shadow minister for Infrastructure Aseri Radrodro has labelled as deceptive the recent government agreed loan from the Asian Development Bank.

The loan was signed on Friday.

Radrodro in a statement said the loan was also worrying because it came at the back of passing of the national budget for 2015 which did not mention any US$100m loan from ADB, instead only featuring an F$3.5 million [US$1.8 million] under ADB newly proposed loans in the Budget estimates.

The repayment period of the loan is supposedly 20 years with the repayment of the loan to commence after five years from signing.

"The new loan agreement, the new revised figure for total overseas borrowings should reflect F$302.8 million [US$152.6 million] rather than the F$105.8 million [US$53.3 million] in the 2015 budget estimates," Radrodro said.

"These additional ADB US$100m loan when added to the current loan funding programme in the 2015 budget, equates to an additional 2.26per cent to the debt to GDP ratio." He added the new loan is also not reflected in the FRA budget estimates of 2015 which is currently showing that loans will be coming from Exim Bank of China.

"The way government continues to undertake its business indicates that it is contradicting itself from its usual claims of being a transparent and accountable government.

"To commit to a loan which they will not have to repay during their term in government shows a lack of responsibility on their part as they shift the commitment to future generations and the next government to undertake." He said this brings into reality the Opposition views expressed during the budget debate that the government budget titled "Turning Promises into Deeds is in fact Turning Promises into Debts".

"The Opposition walked out of Parliament during the debates knowing government was misleading the people of Fiji and here rightfully see that happening.

"Government surely had been discussing the loan with ADB well before the budget announcement but they failed to admit that in the budget estimates All that was provided in the loan funding programme were notes that stated, "The layout of the lending fund account has been revised to record loans that the Government will be committing in 2015 and the loan proceeds which are anticipated to be received in 2015 and post 2015," he said.

Radrodro said it was important for people to know that infrastructure development was the responsibility of any government, and whilst it’s always welcomed for the comfort of the people, it must not come at the expense of leaving our future generations in debt.

"No respectable government will leave huge debt levels for its future generation to repay." Radrodro has reiterated that government must ensure that costs are contained as much as possible domestically.

And this means the utilisation of local businesses for construction and procurement of services with the exception of course where local expertise or products are not available domestically.

He added this would have to be the issue with the new loan as well and that it was crucial to ensure minimal wastage to be effected, and maximum benefit and profits is retained within the national economy.

Minister for Finance Aiyaz Sayed-Khaiyum said that any money allocated to FRA is part and parcel of loan and revenue of government when he was queried if the loan was part of the $634m [US$320 million] allocation to FRA.

"Obviously any money that is allocated to FRA consists of all the sources whether they are from loan, external loans or internal revenue that is generated by government, it's part and parcel of the entire package that's been given to them.'

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