Public Enterprise Reform Continues In Tonga

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Restructuring sees more shared directors positions

NUKU‘ALOFA, Tonga (Matangi Tonga, Jan. 24, 2016) – Tonga’s Ministry of Public Enterprises has started to introduce more shared directors for public enterprises, with some directors holding positions on three boards, as part of a push to reform Public Enterprises that started in 2015 to be completed this year.

During the past two months three public enterprises, Tonga Power Ltd., Tonga Airports Ltd. and Tonga Assets Managers and Associates Ltd., handed government dividends totalling over $3.35 million pa’anga.

"The Ministry is satisfied with the outcome of the public enterprise reform and restructure so far," said Sione 'Akau'ola, the CEO of the Ministry of Public Enterprises on Friday, January 22.

"We started this week the shared directors process for the Transport Sector, and the divestment process under the Agricultural Sector.

"The Ministry plans to complete the shared directors process for the Transport Sector on March 30, and start the process of the PEs under the others in July," he told Matangi Tonga.

It is hoped that more efficient operation of public enterprises could contribute to government’s revenue growth and improve its fiscal position.

Many of Tonga's public enterprises have not lived up to public expectations in the past, and some became fiscal burdens on the national economy, despite providing essential public services. Some public enterprises were criticised for competing on an uneven playing field with the Private Sector.

Government has 15 Public Enterprises and under the reform programme they have been classified into five sectors, which will be managed by shared directors.

Two sectors that have been restructured and managed by shared directors since 2015 are the Utilities Sector and the Information and Communications Technology ICT Sector.

Five sectors for 15 Public Enterprises

1. Utilities Sector

with shared directors:

2. Communications and Technology ICT Sector

with shared directors:

3. Transport Sector (Directors to be announced)

4. Agriculture Sector (to be formed)

5. Other Sector (to be formed).

The remaining nine PEs to be grouped into Sectors with their current board of directors are:

Ports Authority Tonga

Friendly Islands Shipping Agency

Tonga Airports Ltd.

Tonga Market Corporation Ltd.

Tonga Forest Products Ltd.

Tonga Export Quality Management Ltd.

Tonga Development Bank

Tonga Cable Ltd.

Tonga Asset Managers and Associates Ltd.

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