“88 percent of the Chinese loan fund did not stay in Tonga,” say Dr. Halapua

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Created on Tuesday, 04 September 2012 01:55

88 percent of the TOP$119 loan from China for the rebuilding effort of Nuku’alofa did not remain in Tonga, according to Tongatapu 3 constituency MP, Dr. Sitiveni Halapua.

 Dr. Halapua highlighted this during a press conference on the National Development Council’s report last Friday.

 He told journalist that upon the completion of the report, it was discovered that only about 23 percent of the loan money from China stayed in our economy.

“From an economist perspective, 22 seniti from every one pa’anga remained in the country while over 80 percent of the loan fund went to foreign overseas,” explained Dr. Halapua.

Further to that, Chairman of the Special Parliamentary Committee ‘Akilisi Pohiva emphasized that the records from the Treasury Department was wrong.

“According to our investigation 22 cents of every one dollar remain in Tonga as opposed to 44 seniti from every pa’anga implied by the Treasury. This information is misleading.”

Dr. Halapua also mentioned that the Committee had difficulty in tracing the foreign transfer of money between the lender- the EXIM BANK and the main contractor the CCECC.

“It was a difficult task trying to obtain data and records on the flow of money between the EXIM Bank and CCECC…The Treasury Department and the Tonga National Reserve Bank could not even have access to these records but efforts were made to obtaining this valuable information from overseas,” said Dr. Halapua.

He said since the National Reserve Bank was never consulted on these matters, government had no access to the records of foreign transfer component of money between the concerned parties for the reconciliation purposes of payments made.

“Once the Minister of Finance verified the payment claims from CCECC then the employer’s which was the government contacted the lender for disbursing of the payment to CCECC. From there on government could not retrieve any valuable information on those transactions.”

Dr. Halapua said the TOP$119 million loan money from China was accounted for but it was allocated for illegal activities.

“The Vuna wharf project was not included in the original plan of works. It was not included in the list of projects approved by the Legislative Assembly in 2007, the contracting of Fletcher Construction Ltd to build Vuna Wharf neither followed the 2007 Procurement Instructions nor the 2010 Procurement Regulation.”

He further explained that the Legislative Assembly approved the China loan specially for rebuilding of buildings burnt in the 2006 riots.

Only five businesses affected in the 16/11 Nuku’alofa disturbances made use of the Chinese multimillion loans.

According to Dr. Halapua since the Public Finance Management Act 2002 requires loan funds to be used for the intended purpose for which it was approved, each time the Government varied the actual agreement, the Legislative Assembly was never consulted for a new approval resolution.

“So using of that public fund for other purposes and not in line with the country’s rules and laws... Government was in violation of national laws,” said Dr. Halapua.

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