Works Committee reports to Parliament

The allegation was made by the Works, Transport and Environment (W.T.E.) Committee in its report to the Legislative Assembly on the S.A.A’s Annual Report for the year ending June 30 2012.

A Select Committee has accused the government of putting its interests above that of struggling Public Enterprise – the Samoa Airport Authority (S.A.A).

The allegation was made by the Works, Transport and Environment (W.T.E.) Committee in its report to the Legislative Assembly on the S.A.A’s Annual Report for the year ending June 30 2012.

The Chairman of the Committee is the Associate Minister for The Ministry Of Works, Transport And Infrastructure (M.W.T.I.), Tusa Misi Tupuola. In addition to Tusa, the W.T.E Committee comprised of Deputy Chairman Afoafouvale John

Moors, and Members Levaopolo Talatonu, Lealailepule Rimoni Aiafi, Peseta Vaifou Tevaga, Toeolesulusulu Cedric Schuster and Fagaaivalu Kenrick Samu.

The report is republished in full below:

The Works, Transport and Environment Committee Recommends that the Assembly takes note of its Report.

1. RESOLUTIONS The Committee recommends that the Assembly approves the: - P.P.2014/2015, No. 16, Annual Report of the Samoa Airport Authority for the Financial Year ended 30th June 2012; and Committee Recommendations hereinafter.

2. RECOMMENDATIONS: The Committee resolved to recommend that the Government:- 1. Strongly supports Projects recommended by the

Authority such as renovation work of the:- - Airport Terminal Buildings; - Runway and the apron; - Communication equipments (cables) within the airport. 2. The Authority should opt to use solar power in other parts of its services in order to save expenses on electricity bill. 3. To comply with the provisions of the Act in tabling its Annual Reports in Parliament. 4. The Authority for the second time is recommended to finalise its Master Plan for its more important for its future plans.

3. CONSIDERATIONS: 3.1 Corporate Plans Expectations: VISSION: To be the most efficient, safe and secure Small Island State Airport in airport operations in the Region. MISSION: To comply fully with all applicable standards and practices to sustain and enhance effective service delivery.

3.2 ACHIEVEMENTS: Achievements for the Period 2011 — 2012: - The Airport Authority is currently included in the Strategy for the Development of Samoa for the first time. More importantly, Donors can access to this strategy and the

Authority can easily apply for financial assistance to fund its future projects; - The Authority for the first time achieved a decrease in loss since its establishment; - Preparations for the increase in airport departure tax; - Terminal upgrade; - Upgrade to sanitation system; - Cargo Building; - Aeronautical safety study; - Security System Enhancement; - Samoa Airport Authority Act 2012 Achievements (10 years): Since the establishment of the Authority, the Committee noted that the Authority for the first time has achieved a decrease in its accumulated loss of SAT1million compared to its usual annual loss of SAT2million — SAT3million.

3.3 Compliance: 1. Compliance with legislations: The Samoa Airport Authority Act 2012 was passed by Parliament and assented to by the Head of State in January 2012. The new legislation expands on the provision of safety and security related functions for airport operations and more commercially oriented practices for the Samoa Airport Authority. In addition to its main Act, the Authority is also mandated by the following relevant Acts, Ordinances and Regulations which includes: - Air Transport/Aviation; - Airport Facilitation; - Public Order; - Public governance. The following also provides direction and guidance to Samoa Airport Authority activities; - Cabinet Directives; - Dividend policy; - Community Services Obligations (CSO) policy; - Samoa Airport Authority policies; - Treasury Instructions 4. Compliance with the Strategy for the Development of Samoa: Hereinafter are the three main key issues prioritised by the Airport Authority and currently in the Strategy for the Development of Samoa:- (i) Improve passenger facility; (ii) Improve safety; (m) High consistent of international standards.

5. Compliance with the approved appropriations for the Period 2011-2012: According the Authority‘s audited accounts, it clearly highlights that:- - Proper books of accounts have been kept by the Authority; - The accompanying financial statements give a true and fair view of the state of affairs of the Authority as of 30th June 2013 and of the results and cash flows of the Authority for the Year ended on that date; - The accompanying financial statements are properly drawn up to give in the prescribed manner the information required by International Financial Reporting Standards and give in a prescribed manner the information required by the Airport Authority Act I984.

3.4 Observations: OVERVIEW: Committee Observations: Most of its operations were mainly on:- - renovation work prior the 50th Independence Celebrations; - preperations for newly appointed Board Members; - Stan of VIP upgrade. Since 1984, the Authority was operated without any profit until 2011 with a total accumulated loss of SAT45 million. At the end of 2012, the accumulated loss decreases at SAT1million for the first time due to a profit but the accumulated loss usually at a total of SAT2million — SAT3million a year. The Authority has confirmed that the 2013/2014 Annual Report highights a profit of SAT1million. Despite the Authority’s contribution in upgrading the airport, it strongly believes that it is the responsibility of the Samoa Tourism Authority in term of marketing our airport overseas. Upgrading work starts in 2012 however the Board intends to seek for foreign financial assistance. The same year, a memorandum of understanding was signed between the Authority and the World Bank. The Authority’s Master Plan includes recommendations by the KVA that our runway length is not up to international standards. The World Bank and the Shanghai Company were also involved in the study conducted by the KVA, Airport Terminal’s renovation work will be constructed by the Shanghai Company.

The last increase in depattute tax really assists the Authority’s annual revenue. Despite it comes into forcé in 2013 but consultations initiated during the last 6 months of 2011/2012.

The Committe noted that, the Authority now focuses on improving its priority areas in order to upgrade its services to assist its revenue collection. Negotiation with the World Bank and the Shanghai Company is already in place with regards to: - Terminals and Sanitation System Upgrade. The Project deferred due to financil issues. The whole Project costs is US$54 million; - Upgrade runway and Apron fatigue test.

Despite financial issues faced by the Authority, but the Committee had witnessed a lot of improvements and achievements. Concerns or difficulties faced by the Authority: 1. Committee concerns/solutions recommended: The Committee noted without any doubt that the accumulated loss and decrease in revenue will be an ongoing issue with the Authority compare to a decrease in passengers and flight movements. In addition, the Authority has confirmed an increase in expenses on electricity at a total of SAT100,000 — SAT110,000. The Total Car Park revenue earnings is still questioning. The Authority has been awaited for a final decision for Fagalii Airport, even the allocation is already approved in the

Budget. Moreover, it is still waiting for a final Cabinet Decision with ground handling services. The Committee believes that the issue has been delayed because the Government have shares at the Polynesian Company. For safety reasons, and minimising expenses on maintainig runway lights, cables within the Airport should be relocated and replaced.

2. Authority’s responses to concerns: - It is provided under the Airport Authority Regulations that all revenue earnings in terms of departure tax, should be submitted by airlines to the Authority on the 20”‘ day of each month; - Consultations now in progress with solar companies for future plants in order to to minimise expenses on electricity; - Revenue earnings from the car park in incesed compare to the previous financial year. The new change was initiated in order to cater for not achieveing past car park revenues. - The Final Decision for Fagalii Airport was deferred until SIDs Conference ends, however it is still pending; - Technology (MDP) to monitor flights movements is the oldest machine at the airport but it is well maintained. However there are cables located within the land owned by Aggies Resorts which is already planned to relocate as well as old lights at runway. This Project is already in the Plan by the World Bank. 3.5 COMMITTEE

VISIT: The Committee was able to witness during its visit on 17 October, the achievements of the Authority’s services. The Committee noted that achievements for the period under consideration are in line with informations submitted in the

Annual Report. These include:- (i) Construction of a new plastic fence on the coastal side of the airport. The fence was manufactured and imported from New Zealand and it saves expenses on maintaining the old fence. (ii) The Authority still considers monitoring the runway. Also it is still waiting for the results of the runway and apron fatigue test. (iii) Improving preparations for emergencies. This Division continues maintaining four big fire trucks and one inflatable craft for emergencies. (iv) The Arrival and Departure Terminals as well as Public area and toilets are well upgraded. A special building for the Ministry of Health is completely constructed for a purpose of inspecting any suspected passenger who brings into Samoa a symptom of any disease. Despite achievements during the period under considereation, a lot of renovation works were completed prior 2011/2012. Terminals Renovation Plan will start son. The Committee wishes to thank the current Management and the support of Government for this project.

3.6 Recommendations and Government Responses: 1. Government Responses to Committee Recommendations: The Committee wishes to acknowledge the Government Responses to its previous Recommendations. The Committee noted that, these Responses were in line with issues raised for future improvements of the Authority. The Committee considers the support of Government in its role of government scrutiny, especially the compliance with the provision of

Standing Orders and it highlights good governance. 2. Authority’s intentions with Committees concerns: The Authority highly considers the concerns raised by the Committee with expectations on improving the Authority’s Accumulated Loss and Revenue in the future Solutions to these concerns are included in the Authority‘s Master Plan. It also prioritised ways to achieve its performance with an intention to improve revenue and profits. 4. WITNESSES: During the course of its deliberation, the Committee was able to hear evidence submitted by:- Samoa Airport Authority Magele Hoe Viali - General Manager Tumanuvao Evile Falefatu - Assistant General Manager, Security Services Silimana’i Ueta Solomona -

Assistant General Manager, Operation Linda Alapae - Principal Finance Officer Enid Westerlund - Consultant - Business Development
5. PAPER CONSIDERED:- (Tabled 29/5/2014)(Referred 30/5/2014) P.P.2014/2015, No. 16, Annual Report of the Samoa Airport Authority for the Financial Year ended 30th June 2012.

TUSA Misi Tupuola
CHAIRMAN

AFOAUVALE John Moors DEPUTY CHAIRMAN

L AVAOPOLO Talatonu
MEMBER

TOEOLESULUSULU C. P. S. Schuster MEMBER

FAGAAIVALU Kenrick Samu MEMBER

Leatisa-o-Malaefono Uitime Tala
COMMITTEE CLERK

Iole Sanerivi ASSISTANT COMM. CLERK