Shoreline: Asset & Liability [1]
Thursday, April 27, 2006 - 10:39. Updated on Tuesday, September 10, 2013 - 18:16.
Editor,
With the wretched economic climate in Tonga, the people can ill afford to ignore the malfeasance and graft typically exercised by those in power to potentially manipulate the terms of acquisition of Shoreline. Both Government and Shoreline should not exercise complete autonomy in this venture because the interest of the consumers is at stake. Therefore, the process and result need to exist in symbiosis with the community. Shoreline has not provided much financial, operational & maintenance details to suggest a compelling economic proposition thus this creates ample opportunity for critical errors exacerbated by various factors.
The chairman of Shoreline, Crown Prince Tupouto'a, commented on Shoreline's significant investment in modernization and upgrading the power generation and distribution. However, Tupouto'a does not talk in great detail on how the management of Shoreline has improved electric reliability, increased electric capacity in Tonga, energy and cost efficiency. Where is the value added and solutions to consumers' continuous complaints to excessive electricity cost? This lack of critical information implies that Shoreline's investment in power generation and distribution was (and is) a financial disaster. The consequences and burden of their costly apparatus falls inevitably on the people.
Total disregard
Shoreline aggressively upgraded an aging of power generation capacity by implementing approximately six (6) new Caterpillar generators upon taking ownership of the power company from Tonga Electric Power Board (TEPB). It has been described as being done with total disregard to design, function and cost. Caterpillar power generators are among the best and most efficient electric power generators and are widely specified on large scale projects in the US. However, like superior and luxury automobiles that are engineered and designed for specific use, road conditions, premium fuel and maintenance program by highly trained mechanics, they may not be suitable for the road conditions, bucolic lifestyle, environment, climate and technological advancement (or lack thereof) in Tonga.
Without going into too much detail on voltages and megawatts, Caterpillar generators are equipped with automatic transfer switches (ATS), uninterruptible power supply (UPS) and switchgear. These generators function as backup power generation and we have implemented them on major projects to support both critical and non-critical load. Once commissioned, it is powered up once a month and a full load test is performed once a year (by a qualified and certified engineer/technician) as part of the maintenance program. Major retrofit or repair of engines is highly uncommon but because Shoreline's incompetence, mishandling and improper use of these generators make the investment a financial catastrophe for Shoreline.
Caterpillar power generators are great but definitely not the best design and cost effective power resource for Tonga. This was provided to Government in a detailed report compiled by Asia Development Bank (ADB), TEPB in collaboration with the chief engineer from Fiji power generation in the early 90s. Tonga does not have the appropriate resources (specific type of fuel), climate, qualified engineers and proper routine maintenance to support these Caterpillar generators. Shoreline may have initially received large incentives (kickbacks, discounts, rebates) from Caterpillar, nevertheless Shoreline is now ill prepared (financially, physically and professionally) to do damage control hence leaving consumers with ridiculous monthly bills. Selling the company has become their only viable option. Bad investment, significant maintenance cost and high paid ineffectual executives are some of the contributing aspects to the exorbitant electricity bills. Current US experience in Iraq illustrates some of the same problems with power generation due to bad investment and incompetence which parallels Shoreline's predicament, challenges and costly realities.
Need data and facts
Government needs engineers and technicians as well as economists to evaluate Shoreline's electric power generation system and compile a detailed report on its existing condition, projected repair costs, fuel costs, routine maintenance & operating costs. Then they can provide recommendations to remedy the power resources for Tonga. Economists may analyze but they do not create, design nor solve problems. Engineers who have the ability to understand what society needs and can propose solutions to leverage those needs that are tailored to meet specific consumers' needs with energy management solutions and possibly recommend future renewable energy and power resources (i.e., solar, wind, biomass, geothermal, etc.) that have no CO2 emissions that contribute to global warming.
Shoreline should be held accountable for their action. Any and all costs to rectify Shoreline's bad investments, blunders, errors & omissions need to be the sole responsibility of Shoreline and not the people. Before Government can agree on any price, Government needs data and facts outlining the assets and liabilities of Shoreline and solicits competitive bids accordingly to avoid spending a major fortune in acquiring Shoreline then a whole lot more for maintaining the ill conceived existing power generation system.
Sevele's priority
Prime Minister Feleti Sevele recently held a meeting with professional Tongans in Fiji. The meeting, I was told, was frustrating, disappointing and nonproductive because Sevele demonstrated a great tendency toward evasiveness. I realize of course that it is easy to criticize someone and it would be cruel to accuse Sevele of lacking a deep affection for the people but what Tonga needs is leadership (a man like Sir Winston Churchill or a woman like Lady Margaret Thatcher) with the magic gift of genius, wisdom, great honor, supreme virtue of action, good and common sense to modernize the Government and stabilize the economy. It is highly suspected that Sevele's sole priority is to design a scheme to buy back Shoreline by July 2006. Sevele's action will soon indicate his political ambition, short and long term interests. According to Albert Einstein, there are only two things that are infinite, the universe and human stupidity and while we are not sure about the former, there is absolutely no doubt about the latter.
Until further evidence comes forward, the jury is still out on what is economically best for the nation. The only logical step is to ensure that any investment in the power plant serves the needs of the community. It must compel Government to assign a public utility commission comprised of engineers and consultants to go through a rational process of cost-benefit ratio review of Shoreline's assets and liabilities to prevent additional costly mistakes and blunders.
Caveat emptor!
Mele Payne Lynch
Mlpayne222 [at] aol [dot] com