Gov’t money drain

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Customs’ decision continues to cost the government millions in lost revenue

By Alfred Sasako

A decision by Customs officials in allowing a private concern to operate Leroy Jetty along the Ranadi Coastline is costing the Government “millions” in lost revenue, shipping industry sources have revealed.

“Unless the Ministry of Finance intervenes, the government will continue to lose millions more because of similar operations into Renbel,” they warned yesterday.

Others have hinted that the decision by Customs in allowing a private concern to operate another wharf in Honiara could be illegal.

Industry sources said it is not only in Honiara that the national government is losing revenue from import and export taxes.

“Operations of foreign ships into Renbel Province are also costing the government millions more because no one knows what the overseas ships are bringing in or taking out of the country.

“The only government agents there are Customs Officials. So the government loses millions of dollars in both in-coming and outgoing cargoes from both Honiara and Renbel,” the sources said.

Solomon Islands Ports Authority (SIPA), told Island Sun two weeks ago that since Leroy Jetty opened for businesses around November 2016, SIPA had lost millions of dollars in businesses from pilotage, stevedoring and berthing charges which overseas ships avoid paying when they use Leroy Jetty.

“In 2017 alone, SIPA lost more than $10 million in revenue from overseas ships using Leroy Jetty along the Ranadi coast,” senior SIPA officials told Island Sun in an exclusive interview.

“SIPA loses more than $600, 000 in charges each time an overseas vessel uses Leroy Jetty. It is a huge drain on SIPA revenue, which we will continue to lose until the government steps in,” one official said.

Leroy Jetty has since applied to the Minister of Finance and Treasury, Manasseh Sogavare to consider granting it a suffrage wharf status.

Officials from the Ministry’s Economic Reform Unit (ERU) held talks with SIPA management two weeks ago.

“We have made our views known to the ERU officials. In our view it is not healthy financially for SIPA and the government and also in terms of safety and security. It is our hope that the government stands by us in this matter,” one official told Island Sun.

SIPA is planning to brief the Prime Minister, Ricky Houenipwela and his Deputy Mr Sogavare who is responsible for SIPA as a State-Owned Enterprise (SOE).

Apart from the revenue losses, there are several issues that are critical to the SIPA Management. These include international ship and port security (ISPS), safety and the need to comply with International Maritime Organisation (IMO) requirements.

“These are international requirements which must be upheld or Solomon Islands risks losing its licence as declared ports. What is happening since November 2016 is that we simply do not know what sort of cargo has come in and what is going out,” one SIPA Management official said.

Others have pointed out that legally Customs does not have the authority to allow a private concern to operate another wharf which is not a declared port.

Solomon Islands has only two declared ports – Honiara and Noro in Western Province – which are recognised internationally.

“When it comes to the legality of the operations, the SIPA Act overrides any other Act in terms of declared ports,” a former senior SIPA staffer said.