By Gary Hatigeva
THE Solomon Islands Government has resolved to relinquish its shares as a major shareholder in the Tina Hydro Project, which is soon to eventuate.
Speaking on this on the floor of parliament yesterday, Finance Minister and Deputy Prime Minister, Manasseh Sogavare revealed when responding to former finance minister, Snyder Rini’s question on the issue of shareholding in the proposed operation.
Based on documents, Mr Rini pointed out that the government is seemingly pushing to take up all initiative to secure funds from international commercial institutions, but noted that it (government) has no record of shares in the project.
However, the Finance Minister explained that to take shares in such initiative especially when it is a national project is not hard for the government, but stressed that if it is to have all the shares in the company and not be able to achieve the main objective of the project, “then there is no point in getting all these shares”.
“If we allow for the Korean Water to do what the government is doing to secure loans and funds for the project, for sure, they will be pressured to repay and based on that, the company will be forced to push its cost of electricity tariff, and that would just kill the purpose of this initiative.
“Which is to ensure the people of this country is provided with the cheapest and lowest cost of power sources,” Mr Sogavare explained.
He added that the history of the government’s holding shares in commercial activities, we have a bad memory on that, looking at Solomon Taiyo as an example, which was a the government owned.
“But when it comes to the call on recapitalising the company when it had financial difficulties, the Solomon Islands government couldn’t do that.”
He further added that the intention to relinquish shares and government participation in commercial activities is based on analysis and advices from key stakeholders, with the likes of the World Bank and International Monitory Funds (IMF).
“Looking at this argument of government owning shares is not an issue.
“We have no difficulty in getting shares and if the government still participates in it and we still achieve the aim of creating the project, by all means, let’s take all shares in those,” Sogavare said.
However, he highlighted that with this project, the arrangement to let go of shares is only for a period of thirty years.
“Where we relinquish our shares on the project under this arrangement and after 30 years, the government will take it back, and whichever way we’d want to structure how the shareholding of the company, will be entirely up to the government when that day comes in 30 years’ time.
“Let’s not lose site of the intentions to achieve the lower tariff and that is what is in the mind of the government and we have continued to discuss with K-Water and that is the reason for the government to relinquish the share,” the Deputy Prime Minister concluded.