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Reducing power tariff is the issue

Auckland, New Zealand

Dear Editor

The Shoreline issue becomes bolder and bolder as the night goes by and I believe this remains a crucial issue to discuss with its impact on the overall development of Tonga. On my earlier articles, I insisted on the importance of information for the decision makers. Let me give the public some ideas on the issue and I hope this will help enlightening also the government, TEPB and the Politicians. For the people and the public, it is about time to be selective and understand more thoroughly the information we receive daily from media.

Let me refresh Sailosi Finau’s article on 20 May 2005, showing that the Shoreline generates 33GWH per annum. If I could make a simple calculation on this annual power generation, obviously the annual gross earning of the Shoreline is 33x109WH/year x 0.001 x 0.45 seniti tariff and that gives a gross earning of TOP$14,850,000 (14.85 million pa’anga). If tariff goes up to 50 seniti, Shoreline earns 16.5 million pa…‚anga, if goes up again to 56 seniti, Shoreline earns 18.48 million pa…‚anga, if tariff lowers to 40 seniti then Shoreline earns 13.2 million pa…‚anga, estimated gross earning per annum.

Let me give estimates on fuel or diesoline expenditure. Based on NZ Power Generation, 1 litre of diesoline can generate average of 4 to 6 KWH and assuming the efficiency of the Hi Tech generators that the Shoreline installed would improve the power efficiency to 6 -10 KWH per 1 litre of diesoline. On my backward calculation, Shoreline would have used 5.5 million litres of diesoline to generate 33GWh per year and if you work this out on 1 pa’anga per litre tax free of diesoline, the Shoreline must have paid at least 5.5 million pa…‚anga for the diesoline and that is about 40% of the total expenditure. The remaining gross earning (after fuel) of the Shoreline per year would be 9.35 million pa…‚anga (at 45 seniti tariff), 11 million pa…‚anga (at 50 seniti tariff), 12.98 million pa…‚anga (at 56 seniti tariff) and 7.7 million pa…‚anga (at 40 to cover other expenditures include salary, administration, power distributions, loan repayment, TEPB monthly fees, subsidy to Vava’u and ‘Eua etc. etc. and dividends of the Shareholders include other investments if they wish.

The issue upon Shoreline my fellow citizens is TARIFF and you can see from the above information, the financial feasibility of the operation is no way a problem to meet the high salary packages of the Shoreline Staffs even if the tariff goes down to 40 or 35 seniti. I congratulate our Politicians for releasing salaries of the Shoreline Staff but that information is way incomplete and you must do your homework further if you are interested enough to help us people. The issue here is to negotiate with the Shoreline to reduce the TARIFF and I am glad that Shoreline reduced the tariff to 45 seniti now, but I am looking forward for more negotiations to keep pushing the TARIFF to go down again let say by another 30 to 50 percents. I did urge the government and the Politicians before to do their HOME WORK. The existing hi tech power generators now, should help lowering the TARIFF BREAKEVEN POINT and if the TEPB and government and Politicians do their home work, the negotiation with the Shoreline should lower the TARIFF with a system or mechanism in place in government or TEPB to adjust tariff accordingly to the fluctuations of oil prices. This negotiation will also influence the management and salary packages of Shoreline. However, if the people and government are happy with 35 to 40 seniti per KWH and the Shoreline ended up with 5 to 8 million pa’anga net profits from its own efforts to improve hi tech etc., well it’s business and good luck and I hope that everyone should try to get a job from the Shoreline. It is important! to estimate the salary packages of the Shoreline staffs according to its high business turn over as indicated above.

‘Ofa atu,

Henry Alexanda Tonga

Auckland, New Zealand

henry_alexanda [at] yahoo [dot] com