Public Enterprises Minister Piveni Piukala has publicly revealed that an alleged $7 million cost overrun was discovered after completing Tonga Power Limited’s (TPL) newly constructed headquarters.
In a startling allegation, the minister claimed the discrepancy pointed to potential corruption, though he did not name specific individuals involved.
He claimed the building estimate was $4.8 million, but it ballooned to $11 million after the work was completed.
Piukala is currently reviewing the government’s public services as part of the Eke government’s commitment to assess all government sectors.
The headquarters in Poutaha is now at the centre of a growing financial scandal.
Kaniva News contacted TPL for comment.
Piukala also claimed that Tonga Power had undergone upgrades costing around $28 million.
He said he was concerned that “many aspects of the expenditure were neither useful nor beneficial to the people.”
Long overdue upgrades
Tapu Panuve, the Chairman of TPL’s Board of Directors, has addressed concerns regarding the $28 million upgrades. He confirmed he was not with TPL when the headquarters were constructed.
For the $28 million upgrade, Panuve said: “The reason for this huge amount of capital expenditure is that TPL had not invested in past years into generation (fale misini) or distribution (network).”
He said this had led to many outages and failures when he joined the board in March 2022.
“This was further negatively impacted by the Tsunami and volcanic explosion of HTHH in January 2022 which resulted in ash fall build up in transformers and the generation building resulting in blown transformers and damaged generators”, Panuve told Kaniva News.
Several generators in the company’s generation building were from the 90’s (shoreline days) and were long overdue for replacement, according to Panuve.
“Instead of investing in upgrading generators and strengthening the distribution lines (transformers, reclosers, high voltage lines etc.) TPL embarked on spending money on office buildings and other areas. This was before our time”, Panuve said.
“When we started in March 2022 we were faced with aging infrastructure and volcanic ash that had severely impacted TPL’s ability to provide ongoing stable power.
“We were essentially ‘fighting fires’ on all fronts – generators struggling and distribution lines failing and transformers blowing.
“At the same time we were stuck with repaying past loans for TPL (over $30M). We started planning to ‘fix’ the generation and distribution arms of the business.
“This plan is represented in the Capex spend of around $50M – it is a ‘catch up’ to bring TPL back to where it should be to provide a sustainable, affordable and stable power supply for the Kingdom”.
He also said: “I should also note that about half of the $50M is funded by the Australian High Commission after we presented our plans to them on how to fix TPL’s power problems they came up with about half of the funds required. They have been TPL’s true partner in our plans.”
