Public disclosure vital for Government guarantees
The revelations in the Parliament the other day of the investigation of a solar energy ‘middleman company’ by the Cabinet comes at an interesting time.
It comes on the back of the Minister of Finance, Mulipola Anarosa Ale Molio'o advising this newspaper recently that the forensic audit of the former Administration’s signature projects is yet to progress, as the Tenders Board has not approved the engagement of an accounting firm to undertake the audit.
The revealing of an initiative of the former Human Rights Protection Party (H.R.P.P.) Administration, a solar energy project that is linked to a USD$136 million guarantor liability by the Samoa Government, confirms the complexity of the work that lies ahead for the accounting firm that wins the contract.
We are not sure if this project – which involves the Electric Power Corporation (E.P.C.) – is among those that will come under the scrutiny of the Government’s forensic audit but we hope it does.
An article (Solar energy ‘middleman company’ under investigation) in the Thursday 26 January 2023 edition of the Samoa Observer reported on the investigation being undertaken by the Cabinet into the solar energy project and the statement in the Parliament by the Transport Works and Infrastructure Minister.
Olo said a memorandum of understanding was signed by the former Administration in the United States which included a USD$136 million guarantor liability on the Samoa Government.
He revealed in Parliament on Wednesday that instead of using the Electric Power Corporation (E.P.C.), experts who are well versed with the solar power system and the former Administration opted to contract a foreign company.
“I’m trying to find out who are the shareholders of the company which is not registered in the country,” he said.
“I am saddened that the project has been halted since we took over and this is caused by a middleman company, the Gridmarket that stands in the way of E.P.C. and other solar companies.
“Since we took over another middleman company was removed and they have enslaved the E.P.C. for many years and now this.
“We need people with big hearts in this corporation…for the meantime I ask the country to be patient, these companies are in to benefit from the country’s resources.”
Knowing the precarious state of Samoa’s economy and the country’s limited public finances, it is shocking to learn of the USD$136 million guarantor liability that the Samoa Government has taken on.
So what is the monetary value of the USD$136 million guarantor liability in Samoan tala? Using the current rate it comes to a whopping SAT$361,399,139.14 and that is public money that the country cannot afford to lose.
We are aware of a Samoa Government Guarantee Policy, which thankfully is publicly available on the Ministry of Finance’s website, and defines what a Government Guarantee is and sets out the process on how a Government Guarantee can be applied for and processed after ticking the boxes on supporting development priorities, economic returns, economic and social benefits and has the blessings of Cabinet.
On that note did this particular project on Samoa’s renewable energy penned by the former Administration get to tick all the above boxes in line with the Government’s own Guarantee Policy?
Looking back at our own coverage on this particular project, we go back to October 2018 when GridMarket first came onto the scene. Since then there has been coverage including on the sidelines of the 75th UN General Assembly in October 2020 at a forum organised by the Alliance of Small Island States.
The then prime minister Tuilaepa Sa'ilele Malielegaoi spoke at that forum, highlighting his government’s goal to transition the country to 100 per cent renewable energy by 2025.
Ten months later at a UN High Level Dialogue on Energy in July 2021, it was revealed that GridMarket in partnership with the Samoa Government, is assisting the country achieve its transition to sustainable energy.
Over four years later the public is yet to get a clear picture on where the country stands, in its strive to transition to sustainable energy in 2025, amid revelations of the USD$136 million guarantor liability.
This week Minister Olo lambasted Gridmarket for standing in the way of the E.P.C. and other solar energy companies. Ironically, this project was signed off by the former Administration as being in the public interest but was it really in the public interest and where and what are the outcomes today?
Having highlighted the precarious state of Samoa’s economy earlier, it would be cognisant for the current Government to thread with care, when considering similar proposals in the future, so as not to lead to the country adding to its public debt while ensuring full public disclosure.
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