From the House, an English translation summary from the Tongan vernacular, by Pesi Fonua.

Highlights from Evening session, Thursday June 26:

- The saga of Shoreline and the Tonga Electric Power Board continues as the Chairman of the TEPB at the time, Clive Edwards, blames Ramsay Dalgety for rewriting the original agreement for the Shoreline to take over the electricity utility, after the government decided to Public Tender for the bankrupt TEPB.

- The Vote of the Ministry of Finance, which included the $26 million that will go toward the buying back of the electric power utility from Shoreline was passed with the understanding that the money would not be spent until "further talking" between Ministers and the PRs.

Tonga Legislative Assembly, Minute No. 14. Evening session, Thursday June 26, 2008.

Roll Call. The clerk told the Speaker that the Niua PR would not be in the House, and the rest of the members he believed were coming late.

Samiu Vaipulu proposed for the clerk to read the Extraordinary Gazette No. 6, an Ordinance for the implementation of Excise Duties on certain goods.

He called for votes and it was carried 18-0.

The Gazette No. 6 had its second reading.

Somebody moved for the Gazette to be tabled into committee and the Speaker dissolved the Legislature into the Whole House Committee.

'Akilisi proposed for the House to debate on the Gazette for an hour then they should switch to his petition, because Clive Edwards and 'Isileli Pulu were in the House.

Income Tax amendment

In the Whole House Committee Samiu Vaipulu took his Chair. He said that for the evening session they would debate on the Vote of the Minister of Finance and Revenue Collection, Vote No 22. But they would start with related legislations and Extraordinary Gazette No. 6. They started with an amendment to the Income Tax Act.

There was a long discussion because most of the members did not have a copy of the proposed amendment or a copy of the Principal Act.

The Minister of Justice said that copies were attached to the Bill when it was tabled to parliament, and it should have been photocopied and distributed. If they had not got copies then they should access the internet through the computers in their offices, because all the Bills and Acts were on the Tonga-law website.

Petition

'Akilisi suggested that they should debate on Petition No. 3, while 'Isileli Pulu and Clive Edwards were in the House.

Dr Viliami Tangi, did not think it was proper for the House to change its working agenda for the convenience of two members, when they did not know when they would be in the House. ['Isileli Pulu is on trial in court accused of crimes related to 16/11, and Clive Edwards is his legal counsel].

'Akilisi reminded the House that the petition was from the people, and they should not disregard the concern of the people.

Chairman proposed for the proceeding to continue until to get to the Financial Appropriation, which is related to the Petition then they debate on the petition.

He proposed that they debate on both Vote No. 6 and No. 22.

The Minister of Finance gave a summary on Vote No. 6 of his ministry, and Vote No. 22 of the Revenue Collection Department. He briefed them on where the government was collecting its revenue and where it was spent.

Post Office privatised

He told the House that on July 1 the Post Office would cease to be a government department and would then operate as a private company.

Clive Edwards wanted to know how government was going to spend the $9.3 million Contingency Fund.

Afu'alo explained that by the law the Contingency Fund was 5% of the government total expenditure, and it had been set aside in case of an emergency. He said that the Contingency Fund replaced the Special Warrant.

Shoreline

Clive queried a $26 million for the buying of shares.

Afu'alo told the Clive that they had already debated this issue, and it was toward buying back the electricity utility from Shoreline.

Clive wondered why it was classified as Equity Purchase.

Afu'alo Matoto said it was just a professional classification by the people who drafted the budget.

'Isileli Pulu wondered if the $26 million from the sale of government's shares in Westpac was shown in the $80 million government revenue.

Afu'alo said that expected amount from the sales of government shares was included in the $80 million.

'Akilisi, with regards to the $26 million toward the purchasing of the power utility from Shoreline, said that the petition was very clear on why they should not give Shoreline the $26 million. Firstly, the evaluation report of Price Waterhouse had not been tabled into the House and, secondly, there had been no annual reports from the Tonga Electric Power Board for four years before the power utility was taken over by Shoreline.

Afu'alo did not think 'Akilisi had good reasons, because when the issued was debated by the House then they could have stopped the debate, and got the reports.

Chairman of TEPB

The Prime Minister repeated what he told the House the week before about what was said during a debate in 2001 on the electricity issue. He reminded the members that Clive Edwards, as the Minister of Police, at the time, was the Chairman of the Tonga Electric Power Board and presented a report from the TEPB from 1998 to 2000. Clive had then said that the TEPB was bankrupt, and that was the reason why the government decided to Public Tender the electricity utility. If they wanted to stop it then they should have stopped it then. "If it was not for Shoreline no one knows where we would have ended up."

Clive Edwards explained that there was an advertisement, calling for bidders to take over the running of the electric power utility. A deal was nearly sealed with a company from Salt Lake City, USA, with some Tongan interests, but they pulled out in the last minute, and Shoreline was in line to take over.

Pay for new equipment

He said that the agreement that was signed in 2002 was that the power utility was to be given to Shoreline, and when it would be returned, government would have to pay what Shoreline has spent on equipment and improving the service.

He said after 2002, the Deputy Prime Minister was relieved from the board, so were other Cabinet Ministers and other people, and then Ramsay Dalgety was made the Chair and the Chief Executive of the Board.

New agreeement

A new agreement was drafted, they deleted the returning of the utility to government, and put price tags on things that were given to Shoreline for free. The Cabinet then sent the Deputy Prime Minister, Minister of Finance and the Minister of Justice, and Clive Edwards to find out what was going on. There were meetings, but the value of the utility was set by Dalgety and Shoreline, he said.

Clive explained the reason why the power utility was valued was in order to secure a loan of $3.5 million from Westpac Bank of Tonga, on top of a $1 million overdraft to pay for the redundancy of former TEPB employees. Shoreline took over the whole utility in 2003 but they did not repay the TEPB loan from the Asian Development Bank.

With regards to TEPB/ADB loan, the Tonga government borrowed $12 million from ADB to buy new diesel generators. The ADB bought second hand generators, and after a little while they broke down, the Board then decided to sue the ADB for $12 million. There was an uproar and the Minister of Finance then Tutoatasi Fakafanua was trying to stop the board, in case ADB would stop the financial assistance to Tonga. The deal then was for the board to drop the case and government would repay the $11.5 million loan outstanding. Because Shoreline had taken over completely the distribution and the generation of electricity it was paying the Board a small amount to its administration, Cllive Edwards said

Imported vehicles

After a tea break the Committee resumed debating the Extraordinary Gazette on the new duty on imported vehicles.

Teisina proposed that there should be a different formula other then the new CC formula to calculate duty on vehicles for say growers, or such other groupings.

The Minister of Finance explained that the purpose for introducing the new method of calculating duty on vehicles based on CC is to avoid the problem of corruption. To introduce a separate formula for groups would allow room for corruption.

Foreign interests

Clive Edwards expressed his concern about foreign interests taking over big businesses in Tonga. With regards to power generation he said that it a profitable business, and if it was sold to a foreign company, profits would go overseas.

Dr Viliami Tangi, wondered if Clive could comment on the quality of electricity when the power generation was with the TEPB, comparing to when Shoreline took over.

Clive said they have better equipment now and less stoppages, compared with before. The one factor that was talked about a lot in those days was that when the Crown Prince became King, the power generation would be returned to government. He has become the king. He said it is better to stay where it is than to go overseas.

Afu'alo Matoto said that the government had no intention of selling the power generation business overseas. It would sell shares overseas, but not the business.

'Akilisi insisted on saying that the take over by Shoreline was illegal.

Nothing illegal

'Afu'alo reminded that they had just heard what Clive, the chairman of the TEPB at the time said and there was nothing illegal.

'Akilisi proposed that they take the $26 million off the Vote so that they could vote.

Minister of Finance said that they should pass the Vote in total.

Mental block

Clive suggested that it was important for a clear understanding of the situation. He suggested for the $26 million to remain in the budget they were voting on, but before the $26 million was used there should be further talk.

Dr Viliami Tangi, said that 'Akilisi had a mental block. First he demanded the evaluation by Price Waterhouse, the Minister provided the report, he then said he would not accept the report. He did not think 'Akilisi knew what negotiation meant.

Clive said that a first glance at the report, the total value of the assets that were given to Shoreline was $64.6 million. It depreciated to $30 million. The second item it mentioned was the infrastructure, but that was not sold. He again proposed that it was important for further talks to clarify these issues.

$26 million would not be spent

The PM proposed for the House to pass the vote but the $26 million would not be spent until further talk between the Minister of Justice, the Minister of Finance and some PRs.

The Chairman called for vote on Vote No. 22 and the Ordinance No. 6 2008. It was carried 15-5. Against were 'Akilisi Pohiva, 'Isileli Pulu, Clive Edwards, 'Etuate Lavulavu, and 'Uliti Uata.

The House closed at 11.20 pm, but will open of Monday 9.30 am on June 30.