You are here


No wonder the cost of electricity is so high!

Nuku'alofa, Tonga

Dear Editor,

The letter of HRH Prince Tupouto'a on the subject of the high power costs, is informative and historical but purposely refrains from providing any sensible explanation. It did not address the issues, which have and are causing the public outcry over the costs of electricity nor did it attempt to alleviate the general concerns and plight of people who are so adversely affected.

It is not good enough to say that the cost of diesel fuel has increased and therefore the cost of electricity must also increase. Electricity consumers are not totally ignorant on the subject of price increases and the causes thereof. Such simplistic reasoning, borders on the line of being insensitive to the needs, expectations and aspirations of people.

Instead of referring to historical background on global oil prices, these are some of the local issues which require consideration and attention:

1. It is not the cost of diesel fuel that should be stated for public information but the cost of generation of a unit of electricity and the transparency and the accountability of the Shoreline Management.

2. In 1999 the cost of production by Shoreline of 1 unit of kilowatt was 17 cents based on a diesel price of 78 cents per litre. This price took into account the costs of diesel fuel, labour, machinery and others. Shoreline also agreed to accept a further 4 cents per unit to cover profits.

3. Taxes relating to imports of diesel oil were removed and Shoreline, because of its bulk purchases received a special and lower price than the normal retail price. These concessions (except discount on bulk purchases) were not available to Tonga Electric Power Board during all relevant times it generated, distributed and sold power to the public.

4. If the price of diesel oil increased by 50% or 100%, it does not follow that the production costs will increase by the same percentage. The fuel factor in the production cost per unit will increase proportionately whilst the other cost factors remain constant. A price increase of 50% may mean a production cost increase of 10% only. If you apply the converse argument (for demonstration purposes only) namely a price increase of 100% for diesel to equate a 100% increase in production costs it will only increase the cost of electricity to 34 cents. The increase of the profit margin for Shoreline is unknown but estimated to have increased during 1999-2004 by over 500%.

5. People are staggering from the huge and unreasonable salary figures for the 2 directors and 1 executive officer of Shoreline. It is reported that Sefo Manilala receives $500,000 per annum, Soane Manilala $470,000 and Emeline Tuita $370,000 - a total of $1,340,000 ($1.34 million). Compare this with the salary payment of $96,000 for the 3 top executives of Tonga Electric Power Board and the inevitable words are expressed ...…."No wonder the cost of electricity is so high!"...…. These are the highest salary payments in the Kingdom. A month...’s salary for any one of them is greater than the Prime Minister...’s basic salary for a whole year.

6. The operation of Tonga Electric Power Board and its assets (value in excess of $24,000,000) were transferred to Shoreline (subject to payment of T.E.P.B. bank debt of $4 million) on the assurance from Shoreline that it will provide electricity for the people of this country more efficiently and at a cheaper rate. National resources and assets are not transferred to private businesses for the enrichment of a few people.

7. The Government payments of between $3.5 million and $4.5 million from peoples taxes to Shoreline to cover outstanding accounts with the oil companies are regarded as unfair handouts. It is reported that the reason why the oil bills were not paid in the first place was because the funds set aside for oil were diverted for the personal use of two of the directors ...– refer to reports and investigation by media.

8. The recent application for a 13 cents increase in the price of electricity was not supported by any audited accounts to show the loss or profit position of the company and justification for its request. It is alleged that a meeting between the Chairman of Shoreline and T.E.P.B. was held at Hong Kong in October 2004 and as a result an agreement was reached on the price increase.

9. In November/December the "Kelea" weekly newspaper published a list of non-paying electricity consumers ...– people who use electricity without having to pay for it. The argument advanced under this article is that the poor are paying for the electricity of the rich. Shoreline is a private company and entitled to make its own decisions but it cannot escape the validity of the argument that the paying consumers are bearing the cost of electricity for the non-paying consumers. It is an unfair situation and creating animosity amongst people.

10. Illegal activities relating to duty free imports under the Development Licence of the Shoreline Group, involving the Manilalas and the Hardware firm on Railway Rd, is causing considerable anger to a lot of people. Appropriate answers and actions should be taken. Public perception of the above issues and others not mentioned here are bad indeed and need to be addressed if Shoreline is to regain any public credibility.

Shoreline is a private company but unfortunately a lot of people perceive it as a public utility and expect accountability from it. They regard HRH Prince Tupouto'a as a public person (properly and rightly so). His involvement in Shoreline renders that company subject to close public scrutiny. It is the price that one pays for being Royal and for dealing with a public resource. HRH should look at the above issues and deal with them rather than talking about the causes for the global increase in oil prices and unethical political candidates.

Clive Edwards.
3rd January 2005.

Footnote: - electric power and its supply to the public is a matter of national importance. Its impact on the economy and homes of people is real and considerable. A long term commitment and investment on the production of electricity power requires urgent action to ensure stability, growth and the development of this country.


Questions for Clive Edwards - Want-to-know:
Thank you Mr. Edwards for your letter of January 3. If I may ask, whilst in Government what did you do to help the people, when you saw those going-ons that you outlined in your letter? Presumably, many of these were in their developmental stages at the time of your tenure? And why are you bringing these matters to the public's attention at this time? What is your agenda? Respectfully, Want-to-know (Name supplied)

Don't hide like a coward behind anonymity - Clive Edwards:
I refer to the unsigned letter dated 10 January 2005, wherein I was asked questions. It's not my normal practice to answer questions from a person who has not had the courtesy of disclosing his name or identity. If you want to join the public debate over the costs of electricity then make yourself known and be counted. Don'’t hide like a coward behind your anonymity, only Bin Laden and his terrorists associates are well known for that type of behaviour.

In reading your questions it is abundantly clear that you have not read my letter properly or you have deliberately ignored it. You are not interested in the issues but want to be personal. You have gone outside the boundary of fairness in framing your questions and because of your political motives I shall waive my normal practice of not giving answers to questions from a ……. “Want-to-be”……. and provide the following answers:-

i. Whilst I was in government I worked very hard to maintain law and order in this country and to promote the general welfare of the people as a whole. It is too numerous for me to record in this letter what I did in government and the benefits which you are now able to enjoy today. At the same time I and others spoke out against corruption and wrong doing in government, which has resulted in our removal from office.

ii. The public outcry issue is over the increase of electricity charge of 11 cents per unit. The increase occurred in November 2004 some 3 months after I left government. HRH Tupouto'a did not write on this issue until 28 December 2004 and I replied on 3 January 2005. What is the relevance of my time in government over this current issue? The other points I raised in my letter have only become public knowledge in the last month and it was not known before then. I would say without hesitation that most of the government ministers would not be aware of these things, because they are matters of a private company not government.

iii. Shoreline Power is a private company over which government has no direct control. By raising the issues referred to in my letter I had hoped to appeal to the sense of justice and fairness of those who are in charge over this private company to remedy the situation. What they are doing is wrong and needs correction - don'’t you think so? HRH Tupouto'a raised this issue on 28 December 2004 and you ask me why have I raised this issue to the public's attention at this time? When do you think I should raise it? …– two years after the event? Don't be so naive!

iv. You have asked me about my agenda. The answer is simple. I am a paying electricity consumer and I have a vital interest over the question of how I am being charged for electricity. If you don'’t understand that point then don't reveal yourself too much. Respectively, Clive Edwards

We both want people to make informed decisions - Sione A. Taufa:

In reply to Mr. Edwards’s letter of January 12. It appears the questions rattled you a little, judging by the way you signed the letter “respectively”, calling a constituent or one of the people whom you vie to represent in parliament a “‘coward”’ and likening him to Mr. Osama Bin Laden.

Sir, you are a candidate for MP, and as such you must answer questions not only regarding your technical qualifications, but also questions regarding your character, which determines the mores that drives your leadership principles and styles. These are critical information that voters need to know in order to make educated decisions, when selecting our future leaders. Someone who would always put the constituents’ interests over and above his own, and continues to do the "‘right-thing"’ for the people who voted for him. Someone who has the technical skills, integrity, credibility, and wherewithal to work well with the different factions in parliament, and get things done. Someone we can be proud of.

Mr. Edwards you have excellent technical skills, not only because you worked for Government, but you are an attorney. You would be a tremendous asset, and be effective as counsel for the MPs who would be elected by the people to parliament. You would be an invaluable resource for these MPs. For instance, if Shoreline proposes to raise the rate of electricity you would be there to ensure the Company is using the proper formula, check up on their figures and research whether the reasons given for the proposed rate increase is valid. After you checked their work then you can write a report and outline your recommendations to the MPs, or whoever needed the information. Of course, your portfolio would not just be restricted to electricity rate increases, but any other matters you wish to help on. And with you doing this everyone wins. Because, for your services, you will probably get paid more than the MPs; for the MPs, and because of your counsel, they would likely have a better chance of accomplishing something meaningful for the people; and for the people we can see some progress.

There is a concern as to whether you would be effective as an MP for the people, because it is questionable whether you are in the race for the right reason(s). Here is the perception:

A star rugby player is angry and hurt because he was cut by his team. He therefore seeks revenge by trying to get on with the opposing team. In so doing, he brings the playbook of his former team, without them knowing about it, and share it with the new team. The opposing team should not recruit this player because he has his own agenda, and it does not include the wellbeing of the team, …because he is so focused in avenging his anger against his former team. In addition, who would want someone with a questionable integrity, who ups and leaves with his former team’s playbook and shares all the plays with the opposing team. It is difficult to trust this player, because he is only interested in himself.

Professionals with impeccable characters are a pre-requisite to holding public office. Mr. Edwards, whilst most do not condone what Mr. Osama Bin Laden did, does, plans to do, or stands for, we should probably respect the man and leave him out of our dialog. Furthermore, if questions are asked, it does not make any difference WHO asks the questions. The identity of the individual does not determine whether the question(s) should be asked, and whether they should be answered.

It behooves you to answer these questions because they are germane to your aspiration to return to parliament. We both want the same thing; and that is, for the people to make informed and educated decisions on who they vote to represent them in parliament for the next several years. Your answers to these and future questions would help the voters, and who knows, could even get you elected. Wish you well in your campaign.

Respectfully, Sione A. Taufa, Honolulu, Hawaii.

(Editor: metaphorical perceptions abridged for length)

Response to Sione Taufa - Clive Edwards:
Some years ago, I knew ‘Etika Tonga and was familiar with his style. He was not concerned with the issues but always concentrated on personal attacks, ridiculing and putting people down. That style is very similar to the letters written under the pseudonyms of “want-to-know” and "Sione Taufa". I have concluded rightly or wrongly that they are the one and same person as ‘Etika Tonga. I have noted Sione Taufa’s high ideals and advice, but suggest that he practice what he preaches before expecting others to accept them. …

Yours faithfully, Clive Edwards.