Opposition Leader Sēmisi Sika has accused the Tu’i’onetoa government of designing the tendering process for its roading project so the contracts would be given to three of its friends.
Hon.Sika made the accusation in Parliament after the Minister for Finance said the government would guarantee loans from the Tonga Development Bank to three private companies which won the bid of outsourcing road works from government.
Hon. Tevita Lavemaau said the government had supported the loans (“poupou pe pule’anga ia ki ai.”)
The Opposition MPs were concerned that if these companies failed to pay back their loans the taxpayers would suffer because the government was the main shareholder of the Development Bank.
Former borrowers fail to reimburse
There was a mixed response from the government, with the Minister of Finance saying these were secured loans and the companies’ assets and equipment were pledged as collateral.
The need for a guarantor was just something to add on top so the bank could sleep well, Hon. Lavemaau said.
He said there was a precedent and the government had guaranteed loans by private companies before.
However the Minister said companies which borrowed from the government to rebuild their businesses after the Nuku’alofa 2006 blaze failed to reimburse the government.
“These companies could not pay back their loans,” he told the House.
One of those businesses was the Tungi Colonnade and the Minister said the construction was faulty and the revenue collected from renting out of the building could not cover the costs.
He said the government was now paying for all those costs.
Call for transparency
The democrats implied they knew the identities of the three companies, but wanted confirmation from government before they would discuss their background and histories in the House.
The government did not disclose the identities.
MP Mateni Tapueluelu said there were companies which could implement the work without having to borrow from the bank.
He said the people were uneasy about the scheme.
“We wanted to make sure the people feel secure as the government is there in that bank,” Hon. Tapueluelu said.
The Prime Minister told Kaniva News in a previous interview that Cabinet had made a deal with three quarry owners for the project, two of whom were Cabinet Ministers Lord Ma’afu and Lord Nuku. He did not name the third owner.
Two Tendering processes
Hon. Sika told the House the three companies made higher bids than those who were supposed to win the tender before the government cancelled it.
He said the three companies then made a deal with the government to bring down their prices to TP$70 per truck of rock before the tender was re-processed.
This time the three companies were successful and won the bid.
“Why wasn’t the $70 price discussed with all the tenders, but only with these three?” Sika asked.
He said the other tenders may have offered a cheaper deal.
He said the intention of the roading project was to benefit the government’s friends and not because of a duty to build the country’s road.
Responding, Minister of Trade and Economic Development Samiu Vaipulu said this was the government’s own way of doing tenders.
He likened it to what Late Democratic Leader ‘Akilisi Pōhiva allegedly did when he was Prime Minister.
Hon. Vaipulu said these three companies won it and they wanted to apply for a loan to secure equipment for the work.
The Prime Minister told Parliament the loans for the government’s Roading Project had been criticised and described as wrong, illegal and something the government should not do.
In return, the Prime Minister said he wanted to give the House some questions to answer.
“For whom are these roads being built?” he asked.
“For the elderly of the country. For the children of the country. The growers of the country. Men and women. Yes for everyone in the country.”
Noble scolds PM
The Prime Minister asked the House to give him and his government the opportunity to build and repair the road as this was people’s priority and urgent need.
He said according to history the Prime Minister of 2011, Lord Tu’ivakano attempted to build the road and what he did he applied for a loan from a Chinese bank.
Lord Tu’ivakanō interrupted and asked the Speaker to allow him to correct the Prime Minister.
Lord Tu’ivakanō, who received a suspended two year sentence for passport, perjury and firearm offences, told Hon. Tu’i’onetoa that during his premiership the IMF and World Bank had advised Tonga not to apply for any further loans.
The Prime Minister then said he wanted to correct his statement.
He said he was wrong when he said the government applied for a loan.
Lord Tu’ivakano told him to confirm his statement before making it as it was wrong.
“Maybe it’s better for you to sit down and allow the Minister for Finance to speak,” Lord Tu’ivakano said.
The former Speaker said the House would spend a long time on the issue because the Prime Minister was speaking balderdash (“me’a noa’ia.”)
Lord Tu’ivakano warned the House on Monday that it was wrong for the government to fund its Tonga Development Bank and at the same time guaranteed loan applicants.
Tu’i’onetoa’s outsourcing policy
Hon. Tu’i’onetoa was also criticised for the government’s outsourcing and procurement policy.
Some opposition party MPs publicly said they supported the roading project, but believed the multi-million cost was too much for the country to be spent within two years.
They believed this could cause financial trouble for the country.
The government has been working on its roading project since it took power in October 2019, but the construction is still stuck in Tongatapu 10, the Prime Minister’s constituency. This means the government has to complete the construction of the other 15 constituencies within one year and five months to stay on schedule.
In a recent interview with Kaniva News, Hon. Tu’i’onoetoa said it was very difficult to work together with people who they do not hold the same beliefs.
“We need to begin with people who believe in us and then end up with the unbelievers.”
“The same thing applies to contractors for whom we outsourced the roading project.
“We will use the contractors who hold the same beliefs with us before those who we do not have the same beliefs.”