Port Services privatisation ends in disappointment [1]
Tuesday, October 26, 2004 - 15:45. Updated on Thursday, May 8, 2014 - 14:08.
The Port Services Ltd., the sole handler of cargo at Nuku'alofa's Queen Salote Wharf since 1999, will cease operation on October 30, ending a five year privatisation venture that led to disappointment for investors, frustrated by the Port Authority's refusal to allow an increase in their tariffs.
Ross Chapman of the Port Services Ltd said that it was agreed last week during an Arbitration hearing for the Port Authority to buy out the remaining four and a half years of their 10-years contract, and all their equipment.
The Port Services was a Consortium of Joe Tu'ilatai Mataele's Stevedoring, Royco Amalgamated, and Pacific Finance and Investment Ltd that was formed in 1998. In 1999 they signed a ten-year contract with the Port Authority to be the sole handler of cargo at the Queen Salote Wharf.
Ross said that the suggestion by the Port Authority to buy them out followed an Arbitration hearing last week, trying to deal with some unresolved issues.
An issue of paramount importance to Port Services Ltd was the tariff. "We first applied for an increase in 2002, because about March 2002 we were already committed to new equipment, which we wanted. We knew that the pressure was going to be on our pricing because we have to fund all this equipment."
He said that an increase in tariff was not granted, despite the fact that since 1999 the Tongan Pa'anga had devalued by about 50% against the New Zealand Dollar, the cost of spare parts, equipment and the salaries had gone up, but "there has been no relief for us".
"I think in the best interest of the Port Authority they wanted to do it and that was it, and we are very disappointed.
"It is disappointing because it was government policy in 1999 to privatise this particular area of the port operation and I don't think the government, through the Port Authority allowed it to run its course. The Port Authority should have considered the policy at the time, more closely. It appears that they just want to take it back. I think they have a master plan."
The General Manager of the Board Authority Lupeti Vi, confirmed today that they will buy back the remainder of their contract with Port Services Ltd., and the Port Authority will take over the handling of cargo at Queen Salote Wharf on November 1, 2004.
The members of the Port Authority are: Chairperson Fekita 'Utoikamanu; Richard Prema, Sione Taumoepeau, Pohiva Tui'onetoa, 'Etuate Sakalia and Lupeti Vi.