A TP$6 million contract payment agreement between Tonga and a New Zealand company to give the kingdom a “golden opportunity” to connect to a back up fibre internet cable has baffled government authorities.
The government believed the deal would not return any benefit to the country.
Tonga Cable Ltd paid US$2.4 million (TP$3 million) in July 2017 for the deal. The second TP$3 million was due in July 2018 but the government, which guaranteed the deal, has yet to pay it, a government spokesperson said.
He said the current Pohiva government was made aware of the details of the deal when Hawaiki wanted the settlement paid last year.
The TP$6 million deal, which was signed by former Deputy Prime Minister Siaosi Sovaleni, was made as part of another TP$40 million (US$17 million) deal planned between the government and Hawaiki.
In that planned deal Hawaiki would allow Tonga to have a back up optic fibre internet through its international optic fibre cable which connected New Zealand, Australia, Fiji and Papua New Guinea to Hawai’i and US.
The spokesperson said the government was concerned at the fact that TP$6 million had been agreed to be paid to the Hawaiki just to secure an opportunity to connect to its submarine branching unit.
“The deal is baffling,” he said.
Against World Bank advice
The World Bank has funded $50 million for Tonga’s high-speed internet cable which was launched in 2013.
Tonga asked the Bank to also fund a back up, or redundancy, cable but the Bank advised against it, saying it was not “financially viable.”
The government was advised that the main fibre cable and its back up should not be of the same type.
“It was a good advice because if there was plans to destroy the cable as happened recently, the vandals might could easily have destroyed the redundancy cable because they were in the same place,” the spokesperson said.
The best option was to have Tonga’s back up service through a sattelite connection.
The spokesperson wanted to clarify a report by Kaniva news last week about the deals.
As we reported, TCL Director Paula Piveni Piukala and Trade and Economic Development Minister Hon Tu’i Uata said they were in New Zealand to inquire about a TP$50 million contract agreement signed by the former government with the Hawaiki telecommunications company.
We reported according to an interview by Pacific Media Network on Radio 531 PI Tongan programme.
The spokesperson said he wanted to clarify that the TP$50 million contract Piukala and Hon. Uata were talking about included the total of the TP$6 million deal and the TP$40 million deal with Hawaiki, plus other fees.
Tonga had not paid TP$50 million to Hawaiki, he said.
“The agreement was for Tonga to pay TP$6 million to the company and that’s it. The Hawaiki won’t do anything for us,” the government spokeman said.
He said the only time Tonga would benefit from paying TP$6 million to Hawiki was if it used the back up cable. But Tonga must also pay the $40 million before it can connect to the Hawiki cable.
“But I can tell you Tonga does not have that much money and no developing partner is interested in funding that deal. They advised us against it,” he said
The main points
- A TP$6 million contract payment agreement between Tonga and a New Zealand company to give the kingdom a “golden opportunity” to connect to a back up fibre internet cable has baffled government authorities.
- The government believed the deal would not return any benefit to the country.
For more information
Tongan team in NZ to inquire after alleged “unrealistic” $50 million cable deal signed by former government