Public Enterprises Minister Piveni Piukala has demanded accountability after MV Niuvakai was sold for $60k (NZ$43,000) following its TOP$1.3m (NZ$936.500) purchase.
The massive loss comes despite a New Zealand assessment report showing the government could have saved over NZ$500,000 on the initial purchase had proper procedures been followed.
Mr Piukala was currently overseeing a comprehensive review of all ministries, departments, and boards of directors, as the Eke government promised.
The audit aims to assess operational conditions while investigating the origins of numerous allegations surrounding questionable transactions.
Mr Piukala said he has recently traced the whereabouts of the MV Niuvakai and discovered that it had been advertised and purchased by a local buyer for TOP$60,000 (NZ$43,000).
The Minister also accused former government authorities who purchased the vessel of allegedly giving the king incorrect information about the ship.
Ombudsman findings
As Kaniva News reported previously, former Ombudsman ‘Aisea Taumoepeau said that in February 2014, Pacific Royale Shipping sold St Theresa to FISA for NZ$936,500 or TOP$1,379,572.19. The vessel was then renamed the MV Niuvākai when the king launched it.
Dunsford Marine inspected the vessel on January 21-22, 2014, and identified 17 deficiencies. MV St Theresa was found wanting in most capabilities.
The purchase went ahead despite these findings.
On April 5, 2017, three years after the purchase of the vessel, New Zealand Marine Brokers inspected and evaluated the MV Niuvakai as worth NZ$350,000.
The Ombudsman said there was no evidence that the vessel was independently valued before it was purchased by FISA except for the comparative exercise made with the MV Baltic.
Apparent loss figure
The vessel was purchased for NZ$936,500–nearly triple its assessed value of NZ$350,000, according to the New Zealand evaluation report. This initial overpayment cost taxpayers NZ$586,500.
Despite reselling the vessel for NZ$43,000, it appeared that the government ultimately lost NZ$543,500 (TOP$750,000) in public funds on this questionable transaction.
The vessel was owned by the Ramanlal brothers, who were close friends of the late King George V while he was Crown Prince and then when he became king.
The vessel became a financial liability after it became clear there were not enough goods to export.
The vessel was unable to lift the 20 foot (six metre) containers typically used for shipping with its deck crane and was deemed to be unprofitable on voyages lasting more than three days.
FISA created a new company called Tonga Exports Shipping Agency Limited (TESAL) to operate the MV Niuvakai.
FISA Former chief executive Vaka Utapola Vi told Kaniva News in 2014 that FISA only bought the former St Theresa because the price of other ships they looked at, including one in the Caribbean, were either too high or because it would have cost too much to bring them to Tonga.
Vi denied that FISA bought the ship to help the Ramanlals with their struggle to pay back their loan for it.
When he was told a company in Auckland had turned down an offer to buy the ship because it would lose money on voyages lasting longer than three days, Vi said FISA had tested the ship and he had recommended it.
Sailing test
As Kaniva News previously reported, Ngalo’afē ‘Ulupano said he was the St Theresa’s First Mate in 2014 when former Prime Minister Hu’akavameiliku and others from the government’s Friendly Islands Shipping Agency (FISA) came on board to ensure the vessel was right for all the agency needs.
‘Ulupano said he thought at the time the government would not buy the vessel because they had been allegedly struggling to get the engine to work after it repeatedly stalled before they made it to Ha’apai’s Pangai wharf.
He said the mechanical faults forced the captain to change the ship’s schedule, which was intended to call into various ports in Ha’apai before reaching Pangai.
He claimed a final decision was made to have the ship travel directly to Pangai because of the number of stalls they had experienced.
We contacted Hu’akavameiliku at the time for comment.
Troubled history
At time FISA regularly updated the public, saying the MV Niuvakai’s schedules had been either delayed or cancelled due to mechanical faults.
In 2015, about a year after its purchase, it was anchored in Vava’u for months because of a mechanical failure.
It also became stranded on a reef in 2016.
In March 2016 Vi was suspended and later resigned.
Neither FISA nor the government has revealed why he was told to resign.
