Shoreline looks for cheaper fuel supply for Tonga power [1]
Monday, February 7, 2005 - 16:14. Updated on Saturday, May 3, 2014 - 17:28.
by Pesi Fonua
Following concern in Tonga in recent weeks over the rising cost of electricity, the Prince Regent, Crown Prince Tupouto'a told Matangi Tonga Online that his power supply company, Shoreline, has now made it a top priority to reduce its fuel costs for power generation.
This year Shoreline plans to establish its own storage facility for marine diesel.
"Marine Diesel is 25% cheaper than automotive diesel [the only fuel that is imported by the two fuel suppliers to Tonga at the moment] and it will definitely reduce the price of electricity," said Crown Prince Tupouto'a on January 31.
However, he said that the minimum quantity that Shoreline can import is a million gallons, and because it is the same kind of diesel fuel that is used by domestic ferries, he was hoping that the Tonga Electric Power Board, now a regulatory body, could become involved and handle the sale of marine diesel to ship owners.
The Crown Prince said that a feasibility study had been carried out by a Chinese company and the estimated cost to build a storage plant, including pipelines from the wharf to the plant will be around $9 million pa'anga.
The investment in a storage facility will be done in addition to the multi-million upgrading that Shoreline has currently underway.
In June 2004 Tonga's Shoreline Group of Companies received USD$17 million for power and communications, through what it calls a new technical co-operation program with the People's Republic of China. About $8 million pa'anga of that will go into purchasing a new generator to meet Tonga's increasing demand for electric power, and about $1.5 million a year into a major upgrading of distribution. Shoreline inherited a hodgepodge of lines and connections and wants to establish a higher standard of delivery to help reduce the current loss of power due to ineffective connections.
Royalty in Business
When Tonga privatised its power generation three years ago, the Crown Prince's company Shoreline in February 2002 took over the assets of the Tonga Electric Power Board, and the responsibility for power generation, and its distribution.
But the involvement of the Crown Prince in the business of power generation was negatively received by the public, criticism that has been boosted in the run-up to Tonga's March 17 General Election.
Candidates who are campaigning for seats in parliament have put a spotlight on the high rates that are now charged for power along with the outrageously high salaries that are paid to a few Shoreline executives.
Tupouto'a did not want to comment on the level of the salaries, reputedly in the $300,000 to $500,000 per annum range. He merely rebutted the criticism by saying, "yes, if you pay peanuts you get monkeys. This is a very highly technical business and we need competent management, which unfortunately the old power boards did not have".
He pointed out that electricity consumption in Tonga had been rising at around 16% per annum since 1998, and the fastest growing areas are Nuku'alofa and Vava'u. In order for Shoreline to meet the demand at peak time, they have brought in two new generators, one is a mobile unit, which can be transported to anywhere in Tonga in the case of an emergency, and the other to enable the whole of Tongatapu to have enough electricity at peak times.
He said that Shoreline had an on-going investment in power distribution of around $15 million. "We are trying to set it up so that if there is a black out it would only affect a certain area, Hihifo or Vaheloto, but not the whole of Tongatapu."
Tupouto'a had a personal interest in power supply for a number of years before he decided in 1998 that his company Shoreline would bid for the generation of electricity for Tongatapu. He said that at the time he thought that it was the best thing to do for power generation.
"All I can do is to tell the truth and give you the facts. I also think there is a lot of jealousy. I am not a politician and I am not running for an office but it is easy [for some people] to manipulate the ignorant public."
With regards to concern by people over his involvement in business, the Crown Prince can see no good reason why he should not be in business. "Everybody in this country is in business. It just so happens that most of them grow taro, and I am in power generation instead of growing taro."
He said he had no objection to the call by some candidates for the coming election that government should take back the power generation business from Shoreline.
"All what we are trying to do is to create something that we can be proud of. But if politicians want to take the power back I'll not stand on their way, and they can take the power back. All my companies have a price tag. Yes, buy it back $35 million. No objection, I mean we will be out of debt, it will be a good feeling, for the first time since 1998, that I actually have some money," he said.
He added that if it went back to government the survival of the power supply would, "be out of my hands, but if it remains as my responsibility it will not collapse."