Government has learned nothing from the past in its handling of Lulutai Twin Otter purchase

KANIVA COMMENT: The government’s purchase of a De Havilland Twin Otter has stirred up concerns among Parliamentarians about the level of transparency surrounding the deal.

Unfortunately, Tongans do not have to look very far to find  examples of previous governments not being completely open about major purchases. Sometimes, as in the case of the MV Niuvakai, the purchase has led to a major financial disaster.

Unfortunately, the government of Prime Minister Hu’akvameiliku does not seem to have learned any lessons from the past.

As we have said repeatedly, governments must not just do the right thing, they must be seen to do it. If they do not,  people may lose faith in the government if it cannot reassure them that it is acting properly.

If they do not, then people may fear that financial disasters like the one surrounding the purchase of the MV Niuvakai may be in danger of occurring again.

In the end the story of the government’s dealings over the MV Niuvakai came to light, but by then it was too late.

Readers will remember that the Tongan government bought the Niuvākai, then called the St Therese, in February 2014.

In 2019 the Ombudsman reported that a New Zealand-based marine surveyor had identified 17 deficiencies in the MV Niuvākai before Tonga’s national shipping line paid three times what the 34 year- old vessel was worth.

Former Ombudsman ‘Aisea H. Taumoepeau said that in February 2014, Pacific Royale Shipping sold the vessel  to the Friendly Island Shipping Agency for TP$1.5 million/NZ$936,500. 

The Ombudsman said FISA’s board had failed to conduct a proper evaluation of the vessel.

The vessel was bought because it was thought it could carry Tongan produce for sale in Fiji and Samoa.

However, there were not enough goods to export and the MV Niuvakai became a financial liability.

The vessel was unable to lift the 20 foot (six metre) containers typically used for shipping with its deck crane and was deemed to be unprofitable on voyages lasting more than three days.

The purchase of the 35 year old ship was surrounded by controversy, not least because it was surrounded by financial complications.

In March 2014 Kaniva News published details of an e-mail by former Finance Minister Lisiate ‘Akolo which revealed that the Tongan government had urged a potential buyer of the former St Theresa to help pay the owners’ loan with their bank in New Zealand.

The vessel was owned by the Ramanlal brothers, who were close friends of the late King George V.

‘Akolo asked Mosese Uele, director of EZI World Cargo in Auckland, to pay  10-15 percent in advance for the Ramanlals, as part of a settlement payment to their bank.

However, ‘Akolo later admitted the ship could only make a profit if it was restricted to voyages of three days.

Calculations based on the cost of fuel, operational costs and cargo carrying capacity meant it could only profitably sail to neighbouring countries like Fiji, Samoa and American Samoa, Niue and Wallis and Futuna.

The Friendly Islands Shipping agency created a new company called Tonga Exports Shipping Agency Limited (TESAL) to operate the MV Niuvakai.

FISA’s former CEO, Vaka Utapola Vi, told Kaniva News in 2014 that FISA only bought the former St Theresa because the price of  other ships they looked at, including one in the Caribbean, were  either too high or because it would have cost too much to bring them to Tonga.

When he was told a company in Auckland had turned down an offer to purchase the ship because it would lose money on voyages lasting longer than three days, Vi said FISA had tested the ship and he had recommended it.

The MV Niuvakai had had a troubled history since being bought by FISA.

In 2015 it was anchored in Vava’u for a month because of a mechanical failure.

It later became stranded on a reef.

All of this might have been avoided if the purchase of the MV Niuvakai had been open to public scrutiny and Parliamentary debate.

The current government would be wise to be fully open with every aspect of the purchase of Lulutai’s new aircraft. That way it will avoid what it doubtless regards as unwanted – but in our view completely understandable – speculation about the purchase of the aircraft and the government’s financial dealings.

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