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Tonga needs $USD70 million to host 2019 Pacific Games

Nuku'alofa, Tonga


Ever since Tonga won the bid to host the 2019 Pacific Games in September 2012, I have read a lot more negative publicity and criticisms from the general public rather than positive support towards the Games. As the Administrator of Tonga’s 2019 Bid, I wish to provide the following information in an effort to put things in proper perspective.

Because of the current economic constraints experienced throughout the world (Tonga included), it is important that Tonga stages an event of such magnitude to attract investors and to build a nation’s pride and integrity. A cost benefit analysis showed that the benefit of the Games would far outweigh the cost involved. The Tongan bid had an overall budget of 70 million USD but in essence, it will only cost the tax payers of Tonga less than one tenth (1/10th) of such a budget. 50 million USD has been earmarked for capital and infrastructure development and 20 million USD for operational cost.

Let’s start with the 50 million USD of capital investment. Tonga will be offering 26 sports and will therefore need facilities to cover 12 compulsory sports - athletics, basketball, football (soccer), golf, rugby 7s, swimming, table tennis, tennis, va’a, volleyball, beach volleyball, and weightlifting. In addition there are 14 optional sports namely, archery, baseball, body building, boxing, cricket, hockey, Judo, lawn bowls, netball, power lifting, rugby league 7’s, surfing, taekwando and triathlon. While it may seem quite burdensome at first, this is not the case. Tonga already has the ‘Atele Indoor Stadium and Teufaiva stadium. Tonga also has an international soccer academy at Loto Tonga. What Tonga then needs is an additional indoor stadium, a new track and field stadium of international standard (not Teufaiva), new cricket field, baseball field, new 18 hole golf course, and a new lawn bowls green. However, having read the progress reports provided to the PGA General Assembly, it seems almost certain that the Japanese government have committed to the rebuilding and renovation of Tonga College which will include 1000 beds dormitory, new recreational center with additional tennis and netball courts. The same also applies to the second phase of the Tonga High School re development plan to be funded by the Chinese government and will include a new track and field of international standard with more tennis and netball courts. These two development programs will greatly bring down the estimated capital cost of the Games from the 50 million USD estimate. Moreover, the 50 Million USD does not include covering for the cost of an 18 hole golf course which was envisaged would be a separate initiative of the Organizing Committee and the Tonga Golf Club.

To stock take the venues, the additional indoor stadium will share with the ‘Atele Indoor the hosting of indoor sports; basketball, table tennis, volleyball, weightlifting, body building, boxing, judo, power lifting, and taekwando. The THS and ‘Atele venue will host athletics, tennis and netball. Teufaiva will host the opening and closing ceremonies as well as rugby union and rugby league 7’s. Soccer will be hosted at the Loto Tonga Soccer Center. The progress report also

mentions the possibilities of assistance from the Japanese and Korean governments for the acquisition of facilities for judo and taekwando as part of their cultural assistance in the promotion of their national sports. Should this be possible, it can only add to the legacy of the Games.

We are therefore left with the following sports; swimming, va’a, beach volleyball, archery, baseball, cricket, hockey, surfing, and triathlon. Va’a (i.e. outrigger canoe/fautasi), beach volleyball, surfing and triathlon will all be conducted in the water fronts and in the ocean and will not require too much of a cost for their venues. As for swimming, the tentative plan, is to build a 25 meter swimming pool with facilities for training purposes only and for local competition. This is so that Tonga can maintain such a swimming facility in the longer period rather than to build a 20 million USD aquarium that we cannot maintain. As for the Games in 2019, the plan is to import a portable Olympic size swimming pool from Japan that is worth 5 million USD with all its amenities including underwater cameras, mini grandstand, and official score board etc, etc. Once the Games is over, the pool can be dismantled and returned to Japan. The only sports left are archery, baseball, cricket and hockey which only need playing fields that have been earmarked to be situated at Loto Tonga alongside the football complex. All Tonga needs for these field sports are mini grandstands and the fields to be upgrade to an acceptable standard. Archery and baseball can be hosted in one field and the same for cricket and hockey sharing another field over a period of two weeks.

Considering that the Japanese and Chinese governments seem committed to Tonga College and THS, the remaining balance of the 50 million USD will only be required to cover for one additional indoor stadium, two playing fields and mini grandstand at Loto Tonga, 25 meter swimming pool and facilities, and proper administrative and social facilities for water sports (va’a, beach volleyball, surfing and triathlon). I believe that the government will only need a total of 30 million USD to cover for these facilities and which can be forwarded for donor funding and without any cost to tax payers.

I now deal with the 20 million estimates for operational cost. This include the running of the 2019 secretariat as and when it is operational, hiring of the Olympic size swimming pool from Japan, cost of broadcasting rights for the Games (approx. 900K USD), assistance to national sports federations, and the renovation and upgrade of schools. Allot of this cost will be compromised with projected income as we progress towards 2019. As an example, the Secretariat of the 2019 Games can enter into (with the approval of the Organizing Committee), a series of partnership with prospective sponsors for exclusive rights of the 2019 Games in terms of branding and franchises. One such example is, the Secretariat could tender out exclusivity for mobile phone operators as the official supplier of the 2019 Pacific Games in Tonga. A minimum bid of 2 million TOP is the bench mark and supposing the winning bid is 3 or

4 million TOP. The winning bidder will have six years to pay 3 or 4 million TOP to the 2019 Organizing Committee while at the same time earn 10 million (conservative estimate) in the same period for the sale of mobile phone credits (i.e. for every one dollar credit bought, 10 cents goes to the Pacific Games). No doubt this will be a prime opportunity for any mobile operator to generate revenue by being the official mobile operator exclusively for the 2019 Games. The same exclusive franchise can be developed for other products such as the official airline, the official garment supplier, the official transport suppliers etc, etc. This is just an conservative example but is one of the many opportunities the Organizing Committee will have, to create unprecedented revenue streams through branding and franchising.

As for broadcasting rights, the PGC have charged a fee of 900K USD to Tonga. This is a minimal charge but once the local organizing committee has acquired the broadcasting rights, the PGC will work in close consultation for the sale of these rights to regional television operators. Having discussed at length with officials from the PGC in Uvea last year, it is estimated that Tonga can benefit almost three times the cost. The sale of the broadcasting rights can be made to television operators such as Sky TV for the eastern Pacific and SBS and US based television companies for the northern Pacific. Such television operators can purchase the broadcasting rights at a combined minimum of three million USD from the Tonga Organizing Committee. They can then on-sale it to local television stations throughout the region to recover their cost as well earning a comfortable interest. Considering the above revenue stream, it will most probably compromise 60 percent of the operational cost of the Games. Other revenue streams includes per diem by participating countries which is estimated at three million USD.

The 20 million USD estimate of operational cost also includes a contribution of 10 million TOP (5 million USD) from the Tongan government. However, about six million TOP will be attributed to exemption of duty, taxes and CT. Only two million will be in actual cash for the start-up of the secretariat and assistance to the renovation of schools. So in real terms, the Government is most likely required to commit only 3 - 4 million TOP from tax payers towards the 2019 Games. The operational estimate includes rebuilding of new toilet facilities with proper showers for schools in the Nuku’alofa area so as to accommodate participating countries. Once the Games are over, the schools get to keep these new facilities at no cost to them and will be part of the legacy which the Games will leave behind. So in all fairness, these are factors that need to be revealed for the purposes of discussions and debates concerning the 2019 Games.

All of the above information was provided during the bidding process but the real work is now with the Audit and Governance Authority (the Authority) which is the supreme governing body of the 2019 Pacific Games. Tonga will need to look to its neighbors to understand that time is the most important factor. The Authority will need to set up the Organizing Committee as soon as possible and the Organizing Committee needs to start work now in drawing up the road map

to 2019. They must give ample time to prospective investors to build on its investment to 2019 and allow them enough time (minimum 5 years) for a positive return from their investment. Next month will complete one year since Tonga was awarded the 2019 Games in September 2012. We cannot afford to wait until the dates draw nearer to start working. This is the mistake other countries have taken. A good example is the fact that PNG was awarded in 2009, the rights to host the 2015 Pacific Games. Their budget for the 2015 Games in 2009 was just over 100 million USD. However, the 2015 Bill for the Pacific Games was only just passed in the House late last year. They now only have a year to go before 2015 and their revised budget have sky rocketed to 700 million USD since investors find it difficult within the time given to make a positive turn over in just over a year’s investment. I hope we learn from the mistakes of our neighbors and act now, it’s not too much work if we all put our minds and energy together in making it happen.

‘Ahongalu Fusimalohi