Purchase saved millions - Faumuina claims

Spending over $1.1 million on a truck and water drilling rig saved the country millions of tala.

That’s one of the claims made by the former Minister of Finance, Faumuina Tiatia Liuga, in his shock resignation speech delvered in Parliament last week. The sale of the truck and water rig also made millions, he claimed.

His comments were the first time the public has heard directly from Faumuina since publication last year of the leaked Controller and Chief Auditor’s report, which was reviewed by the Officers of Parliament Committee (O.P.C). In his 25 page speech, Faumuina goes into detailed responses to many of the criticisms made against him. Among those responses are the reasons behind spending over $1.1 million on a truck and water drilling rig by the Samoa Land Corporation (S.L.C) during the 2009 to 2010 financial year, when Faumuina was chairman of the board.

That purchase was criticised by the Audit Office for the use of a “middleman”, and attacked by the O.P.C. as an example of “corrupt practices.”

In fact, S.L.C spent twice as much, at $2,192,210, as disclosed in the O.P.C. report. However, in his speech, Faumuina referred to the lower amount while defending the purchase. A decision by the S.L.C to purchase the truck and a water drilling rig was a result of ‘prioritising Falelauniu residents’ and ‘saving money,’ he told Parliament.

“The Administration had never planned to purchase these assets.”

But when the Samoa Water Authority (S.W.A) could not accommodate drilling at Falelauniu due to other commitments, the purchase was considered and conducted, he claimed.

“The Administration of the Water Authority replied they would not know for sure when their Water Drilling Rig would be available.”

He claimed that the authority’s reason was because they were also dealing with partnership projects with the European Union scheduled for completion by December 2013.

“This programme by the way was the drilling and reticulation of water supply for some of the villages in Savaii.

“In regard to the time according to the Water Authority when the Drilling Rig would be available, it meant we would have to wait for five years before the drilling and reticulation of water supply for families at Falelauniu can be done.”

Faumuina went on to explain that it would have been very expensive for the Corporation to pay the Authority to cart water for some 150 families over 5 years.

“Water is one of the most valuable resources and greatly in demand for the life of man, and it was necessary there for to find the cheapest way to provide water for 150 families or 1,599 people of Falelauniu.” As a result the Board and the Administration gave priority to the people, as well as saving the Corporation’s monies, he said.

He explained that fifty water trucks were required to service water to Falelauniu daily. As a result it was scheduled that the water trucks would distribute water to the area three days a week costing $250 per trip.

One truck carried 3000 litres of water and the cost for transporting the water for three days a week was $37,500.

“There are 52 weeks in a year multiply that by $37, 500 and so the total cost for distributing water to Falelauniu for a year was $1,950,000.

And if S.L.C. waited for five years for S.W.A. to drill for water to service these areas it would have cost the corporation $9,750,000, he claimed.

“It was too expensive for the Corporation,” he said.

His comments did not respond to O.P.C findings that the S.L.C never consulted the Water Authority. But, on the night he resigned, Faumuina said it was not S.L.C’s responsibility to purchase these assets.

However, he went on to explain, the Board and S.L.C Administration’s attention was drawn to the problem as a result of a similar situation that impacted the subdivision of Government lands at Vaitele-fou.

Almost 10 years had lapsed without any water supply and reticulation being done. He told that there were more than 900 quarter acres from 1995/1996 that had been allocated, but electricity lines took until 2000/2001 to be installed. Vaitele roads were sealed in 2003/2004 and water supply were not installed until the end of 2004.

Again he claimed this was why the Administration recommended to the Board to purchase the truck and water drilling rig.

This was to drill a borehole to enable the S.L.C. to cart water for the Subdivision at Falelauniu which would be much cheaper to the Corporation than to wait for S.W.A.

“The cost of the truck and the water drilling rig was US$450,000 (without tax) equivalent to ST$1,196,067.93.”

He said this was much cheaper than to service these areas with a water truck by SWA for 5 years at a cost of $9,750,000. In his speech, Faumuina also claimed that the Corporation sold the truck and drilling rig to SWA for $8 million tala, last year in September.

Faumuina said that the assets sale price exceeded the purchase sale, earning SLC more than it lost – it was a move in the right direction.

He emphasised that purchases of this kind were positive for the Corporation and not something new. He referred to another purchase SLC had made in ploughs resulting with work being conducted in 1993.

SLC would not have been able to “immediately prepare the golf course and other areas of land maintenance and the construction of the sports fields to be ready in time for the South Pacific Games in 2007,” without that purchase.