Editor,
I would like to voice my concern at the government policy to give an exclusive licence to JAWS Shipping Ltd to service the Vava'u, Ha'apai and New Zealand route. In my opinion, this policy is a very selfish policy and it appears people who are behind this policy are aiming to fill their pockets, rather than deliver a quality service at a reasonable price to consumers.

This policy aims to create a monopoly in the market, which is not good for consumers (you and me). Since there will only be one operator, the price of service will be very high and service will be poor. Further, if the people of Ha'apai and Vava'u are unhappy with the service or price, too bad, there is no alternative supplier. The only option available is to ship their goods via Nuku'alofa, which can be very expensive.

I am amazed at the quality of decision making by the government, and a Prime Minister who should know better. I remember watching the Deputy Prime Minister make a statement that this exclusive policy will help competition. The only thing I can say about the Deputy Prime Minister's statement is that either he is forced to support this policy or does not know what he is talking about. It is not rocket science to figure out the impact of this policy on the people of Vava'u and Ha'apai. We don't have to look further to witness the impact of a monopoly in the market. Before Digicel (formerly known as Tonfon) came into business there was only one telecommunication provider in Tonga, the Tonga Telecommunication Ltd. I remember during those days, an overseas phone call cost about $3 to $5 pa'anga per minute. Today, it costs less than $1 paanga to call overseas. What was the cause of this? It was caused by something called "competition". Competition has transformed the lives of people in Tonga who could not afford the service previously. Tonga is enjoying a very low cost telecommunication services, whether it is mobile, landlines or internet usage. This experience was never possible without having another provider competing in the market. If the market was still operated by Tonga Telecommunication Ltd, we will still be paying higher fees. Competition also helps to improve service and provide jobs, income for families and revenue for government. Take a look at the new jobs provided by Digicel. That's the impact of competition.

What also amazed me, is the fact that the same people who are involved with the operation of JAWS Shipping Ltd are the same people who were involved in the operation of the Shoreline Ltd and Tonfon Ltd. The investment (buying shares) in this company may not be the best decision. Why invest in a business that does not look promising? Has the government done enough study to determine the viability of this investment? In my opinion, the proposed route Vavau, Ha'apai and New Zealand is not a viable route. I don't think there is huge volume of cargoe transported on this route because the size of the target market (Vava'u and Ha'apai) is very small. People who normally trade this route are mainly individuals who send goods for families and friends, and maybe sellers of agricultural products. Further, there are not a lot of importers and exporters, like Tongatapu, to guarantee frequent usage of the service.

The government is afraid that if they allow Reef Shipping to compete on the same route, the investment in JAWS Ltd will be a failure. JAWS might be able to resist competition in the short term but in the long term they will not survive. Reef Shipping is able to maintain the current service to Vavau because other ports help to subsidize the service. For example, the ship that docked in Vava'u also docked in Nuku'alofa. The bulk of the revenue made by Reef Shipping in my opinion is made on the trip to Nuku'alofa with little impact on their bottom line the cost of the extra trip to Vava'u.

With all the facts against such move, I am trying to come to terms with the reason for such a policy. However, the only reason I can think of is that there are people in government who stands to gain financially from this policy. I cannot understand why those in power support such policy when most of them were in power when the previous government granted licence to Tonfon to operate in Tonga. I remember before Tonfon came into existence they were vocal in supporting another competitor in the telecommunication market. One of the current ministers appeared on TV saying that such a move would provide better services at a reduced price, which in fact true, but what makes me angry is the fact that they are saying now that a monopoly is better for competition (Deputy Prime Minster's statement). It seems these leaders know the right thing to do, but instead do the opposite because that is what they are feeling obliged to do.

Leny Tukia

ltukia [at] live [dot] com [dot] au