Airport's debts growing

The Samoa Airport Authority (S.A.A.) has implemented projects without the surety of financial assistance.

Such is the finding of a Parliamentary select committee.

In its report on the S.A.A.’s Annual Report for the financial year ending June 30, 2011 the Works, Transport and Environment Committee (W.T.E.) reported that the Board failed to approve a $58 million tala Master Plan for the Authority.

The Chairman of the Committee is Associate Minister, Tusa Misi Tupuola.

“There are vast financial issues that occurred during its consideration where debts continue to accumulate,” the Committee reports.

“This is one of the problems where previous Management has strongly resolved to decrease expenditures.

“However, a number of facility maintenances were required and there was a decline of inbound planes especially since the reopening of Fagali’i Airport.”

In regards to the Master plan, the W.T.E. committee report that many of the strategies of the Authority are set out in its master plan.

“Nonetheless it could not be utilised as it was not approved by the Board of Directors,” the report reads. “This Master Plan, aimed at developing and using the land or property under the Estate Trust in constructing a new airport due to the danger of rising seal level.

“This project was financed by the Government of Samoa a sum roughly of $120,000.

“However, Management have raised that this master plan is currently under examination in collaboration with the Australian Government and KVA Consult Ltd.

“The following research currently undertaken is financed with the assistance of the World Bank in promoting this project.

“The overall cost involving research and consideration of the Master Plan set out from the previous year is equivalent to US$25 million ($58,147,397 tala).”

In addition to Tusa, the W.T.E Committee comprised of Deputy Chairman Afoafouvale John Moors, Leaupepe Tole’afoa Fa’afisi, Levaopolo Talatonu, Lealailepule Rimoni Aiafi, Peseta Vaifou Tevaga and Toeolesulusulu Cedric Schuster.

The report in full is published below:

1. RECOMMENDATION:- The Works, Transport and Environment Committee recommends that the Assembly takes note of its Report. 2. PREAMBLE:- The Works, Transport and Environment Committee is constituted pursuant to the provisions of Standing Orders 176. 3. STANDING ORDERS 176:- It shall be the duty of the Committee (a) To consider any bill, petition or other matter referred by the Assembly pursuant to these Standing Orders; and such Estimates or review of ministerial performance as maybe referred by the Finance & Expenditure Committee; (h) To examine the policy, administration and expenditure of ministries and associated government organizations related to construction and development, transport and transport safety, energy, conservation, environment, land information and surveying.

4. PAPER CONSIDERED:- (Presented 30/5/2013) (Referred 31/5/2013) P.P.2013/2014 No. 6, Annual Report of the Samoa Airport Authority for Financial Year ending 30th June 2011.

5. WITNESSES:- During the course of its investigations, the Committee was able to hear oral evidence submitted by: Magele Hoe Viali - General Manager Tagaloa R. Jensen - Manager, Corporate Services Division Ueta Banse J. Solomona - Manager, Airport and Communication Division Linda Alapae - Principal Officer, Finance Division 6. FINDINGS:- The magnitude of work implemented by Management during the reviewed year has seen the completion of Major Projects which include: Runway lighting Replacement Program; Master Plan; Review of SAA Act 1984 The bulk of these projects were the construction of a Cargo Building that began in 201 l, Management is still reviewing its Act since the year it was first proposed at.

Other projects implemented by Management were without the surety of financial assistance as is the current case. There are vast financial issues that occurred during its consideration where debts continue to accumulate.

This is one of the problems where previous Management has strongly resolved to decrease expenditures. However, a number of facility maintenances were required, and there was a decline of inbound planes especially since the reopening of Fagalii Airport.

Master Plan: Much of the strategies of the Authority are set out in its Master Plan, nonetheless it could not be utilized as it was not approved by the Board of Directors.

This Master Plan, aimed at developing and using the land or property under the Estate Trust in constructing a new airport due to the danger of rising sea level. This project was financed by the Government of Samoa a sum roughly of SAT120,000.

However, Management has raised that this Master Plan is currently under examination in collaboration with the Australian Government and KVA Consult Ltd.

The following research currently undertaken is financed with the assistance of the World Bank in promoting this project. The overall cost involving research and consideration of the Master Plan set out from the previous year is equivalent to USD25 million.

Other Services: -Ground handling services is a responsibility of the Airport Authority. Nonetheless, Management has purported that Polynesian Airlines often encountered financial issues in days past which is why this service was given by the Government to assist with the Airline Company.

The Committee noted that Polynesian Airlines received nearly SAT4 million in revenues from this service alone on a yearly basis. Previous Managements have sought ways to return this service under the Authority with no success. There are currently two companies who have access to this service (Polynesian and Oceania).

The Authority has signed a major shareholding partnership with Oceania Aviation Samoa Ltd however Management has yet to receive payments.

The Asau Airport continues to be maintained although the Authority receives no revenue.

However, it is difficult for Finance Sector under the Community Services Obligation to assist with Management in this regard.

Including services needed by the community within the vicinity of the Airport through water supply and other services which Management feels obligated to provide.

7. COMMITTEE APPRECIATION:- The Committee is appreciative of the improved standard of services that the Authority has achieved in their pursuit to maintain safe and secure conditions in the Airport, so that Samoa presents a good image to the world.

Although its financial issues affect its services, we are grateful to Management for pulling through and continuing to endeavor.

The Committee wishes to disclose its appreciation to the General Manager and Management in providing refreshments during its investigation which enabled the completion of this report.

8. RECOMMENDATIONS:- Based on its Findings the Committee recommends to the Government:

1. To consider provisions in returning ground handling services under the Airport Authority as the Committee is certain that it is solely their responsibility. Furthermore, it would solve the Management’s revenue issues in financing their operations.

2. Management should consult Community Services Obligation in financing its services as was the purpose and reason behind the set up of these funds.

3. Recommend Management to conclude their Master Plan that would set out their priorities and way forward.

The Committee believes that the Airport Authority has numerous services which would require an intended plan.

9. RESOLUTION:- At the conclusion of its consideration, the Committee resolved to recommend the Assembly: That the P.P.2013/2014 No. 6, Annual Report of the Samoa Airport Authority for Financial Year ending 30th June 2011 be approved.

TUSA Misi Tupuola CHAIRMAN

For the past six weeks, the Samoa Observer has been publishing the 39 reports tabled and approved by Parliament without debate, last April. Today, we are looking at the Work, Transport and Environment (W.T.E.) Committee’s report on the Samoa Airport Authority’s (S.A.A) Annual report for the year ending June 30 2011.