Editor

It is very important to accept the fact that Shorelines has made a big different to the reliability of power generation and distribution. We should also understand the fact that we cannot control the oil price and the price of oil has been sky high by more than 200% during the last 2 decades and to be reasonable, the rates of tariff increase is acceptable.

As mentioned on our earlier discussions, there are two main factors that determine not only the tariff rate but including the entire cash flow of this kind of ventures (power generation & distribution). The first one is oil price and the second one is the power demand. Nobody denies the adverse impacts of the black 16 November and I certainly agreed that the unexpected decreased of the power demands in Nuku...’alofa has certainly affected the Shorelines cash flow. A simple sensitivity analysis on this matter can easily reveal the impact of oil price and power demand on the Shorelines cash flow. This leaves the Shorelines, I suppose with a few options, i) decrease administrative expenses ii) lay off some of its administrative and technical staffs, iii) loan some money to maintain its services, iv) declare bankruptcy v) insurance claim for the black November 16, vi) sell out the business etc. etc.. Again, the above options remain the discretion of the Shorelines under the company & business acts.

The sensitivity of the Shorelines cash flow to this dramatic decrease in power demand is for real and I believe certainly that the time intervention of the Government of Tonga is a very crucial decision for the whole of Tonga. We must understand the function of power electricity in the business industries and economic development. The adverse effects of a one day power cut will be so deteriorated to the country and that is an alarm signal for all of us to be reasonable when we discuss the Shoreline issue. The government is doing its best to recover the damages in Nuku...’alofa and its decision to lend 2 million pa...’anga to fuel Shorelines is the best decision at this point of time. There is nothing to do with His Majesty and I believe that the government and the TEPB assess carefully the Shorelines matter and decided to intervene urgently to mitigate and minimize any further economic crisis from power cut.

We need to be sensible and due to the lack of understanding on the Shorelines situation, some of us could easily say that the 2 million pa...’anga loaned to the Shoreline was a Royal Command. It was fueled to meet the high salaries of the Shorelines staffs etc. etc....….. this is the kind of shameful public information that miss leads the poor people of Tonga. Selling out Shorelines shares can be considered as medium term for the government and the Shorelines to decide and of course there should be concrete terms in-place to meet the objectives of power supply for the business and economic development of Tonga. Meanwhile, let us wait and see if Tonga could recover its economy.

...‘Ofa atu,

David Tapiaka

dtapiaka [at] yahoo [dot] co [dot] nz