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Govt. defends T$5 million for Samoa Airways

The Samoa Government has strongly defended the inclusion of a T$5 million allocation to Samoa Airways in the recent national budget, delivered against a backdrop of serious economic challenges. 

The airline, which ended its “wet lease” arrangement with Malaysian-based Malindo airlines in March, currently has no planes and is not flying international routes. 

But the head of the Finance Ministry said that the allocation was not for the airline’s operations, but rather as the first installment in a T$12 million compensation package for the former airport at Fagali’i.  

“This is for the land in Fagali’i [which] has always been a property of Polynesian Airlines (now Samoa Airways) and it’s now being used by the Ministry of Police,” said the Ministry’s Chief Executive Officer, Leasiosiofaasisina Oscar Malielegaoi. 

The land in question is more than 30 acres. 

The T$5 million is to be paid to the Samoa Airways as compensation for the Government’s takeover of the Fagali’i Airport properties and is outlined in the Financial Year 2020-2021 budget pending in Parliament. 

The land was subsumed by the Government for use as a Police training ground in the first days of 2020. Flights to Pago Pago, which had previously departed from Fagali’i, were instead redirected to the Faleolo International Airport. 

According to Leasiosio, the total amount owed to Samoa Airways is T$12 million, however they are paying instalments and this is the first payment. 

“Prior to the Samoa Airways moving out, this is where they were making money; not only they rented out the space, but Talofa Airways was also operating out of there, now everything is centralised at the Faleolo [International Airport],” he said. 

“They conducted their own [land] valuation and it amounted to T$12 million. We are paying it in instalments.”

He said there were two land valuations conducted by the Airline and factored in was that the area is prime land with facilities as well as the runway. 

Attempts by the Samoa Observer to secure copies of the land valuations were unsuccessful with queries referred to the national carrier. 

An email sent to the C.E.O. of the airline, Seiuli Alvin Tuala, asking about the measures used to value the land did not receive a response on Thursday. 

But the Finance Ministry said only the valuation conducted by the Ministry of Natural Resources and Environment, would be considered as the relevant authority when assessing public land. 

Leasiosio made it clear the T$5 million payment should not be regarded as a stimulus payment towards the airline, after a T$1 million payment to help it pay its suppliers was included in an economic relief package earlier this year. 

“The first stimulus [of T$1 million] is to assist the Samoa Airway as they were having a cash flow issue, but this is specifically for the [Fagali’i] land,” he said. 

Leasiosio said the second phase of the stimulus is a very substantial incentive package for the private sector. 

“Yes the timing is right and also there are 25 stimulus measures rolled out by the Government, which targets pensioners and exporters,” he said. 

He said there is also a T$50 tala per person that will be issued for registration of the National I.D.

“This is an added incentive and this will encourage members of the public to come and register,” the C.E.O. said. 

“There is also incentive for housing and this will be in line with the Village Voice [section of the Samoa Observer]”.

Total “Phase II” stimulus measures unveiled on Tuesday amount to a total of more than T$80 million tala in spending initiatives.

But on Tuesday economist and opposition M.P., Luagalau Afualo Dr. Salele, said this figure was inflated by giving citizens access to National Provident Fund (N.P.F.) dividends, which should not be regarded as injections of Government money into the economy.

The total value of the N.P.F. dividend, which will be accessible from July is forecast to reach T$35 million.

Other stimulus measures included a one-off T$100 increase to the aged pension and a sustained T$15 increase in monthly pension payments. 

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