The Tonga government has increased its subsidies to the shipping and air services between the two Niuas and, Vava'u and Tongatapu, for the rest of the 2006-07 financial year.

The Minister for Transport, Hon. Paul Karalus announced yesterday, December 6, that until the end of July 2007 the frequency of the routine service of the MV Olovaha from the two Niuas to Tongatapu via Vava'u will be increased from one sailing every eight weeks to one sailing every five weeks. The freight rate from the two Niuas to Vava'u and Tongatapu will also be reduced.

The first ship leaves for the Niuas next week under this new government arrangement and Niuas farmers are being urged to take advantage of the new cargo rates, and to start planting crops for markets in Vava'u and Tongatapu.

"My experience in the airline industry tells me that a greater frequency will generate additional cargo and passenger revenues for the MV Olovaha, such that sometime next year the northbound freight rates can also be reduced," the minister said.

From January 2007, the government will also subsidise the the air fares between the Niuas, Vava'u and Tongatapu. Government will be paying $100 pa'anga for each one-way fare between the Niuas and Vava'u and Tongatapu.

"This is designed to encourage greater passenger numbers to sustain the weekly services to each of the Niuas, such that a one way fare from Nuku'alofa to Niuatoputapu will reduce from $424 to $324 pa'anga and from Nuku'alofa to Niuafo'ou from $464 to $364 pa'anga," he said.

The Government's total annual subsidies for shipping will be $300,000 and $200,000 for air services.

The minister believed that the additional revenues developed through these measures would in time exceed the cost of the subsidies, he said, "and greatly reduce the disadvantages of living in the remote islands of Niuatoputapu and Niuafo'ou."