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By Staff Reporter : PNG Today

Cook Islands Government clears $12.4m Toagate saga

The final payment to Toa Petroleum under the multi-million Toagate scandal was made in December last year, confirmed Finance minister Mark Brown.

The government had paid the company a total of $12.4 million (US$8.9 million) over eight years since 2010.

Brown said a significant amount of money was paid out at an average of $1.55m (US$1.12 million)  each year as part of a court-mediated settlement from the Democratic Party government’s failed attempts to nationalise the fuel operators and get into the fuel business themselves.

He claimed the money could have been put to better use if it hadn’t been for the failed venture by the previous government.

“What is even worse is that after paying $12.4m(US$8.9 million), the people do not get anything to show for it,” Brown said.

“This was money that could have been used on things like roads, education or health. 

“The folly of the previous Democratic Party government provides an example of what governments should not do.”

Brown said the government could now divert the money previously tied up in the Toagate saga to new developments and initiatives.

“The good news is that after eight years of paying out $1.55m (on average) per annum to Toa (Petroleum), the government can now reallocate that money to more needy priorities in this year’s budget and it gives a little more room for new initiatives to be considered.”

The Toagate scandal resulted from a secret deal to purchase Toa Petroleum in 2008 by the former Democratic Party government.

However the agreement to buy the company fell through and this resulted in a court-mediated settlement, which included a guarantee of $1.2m (US$867,000) profit by the then government for the next eight years, to Toa Petroleum.

The government changed the following year and for the past eight, the Cook Islands Party government has paid around $1.55m (US$1.12 million) a year to clear the debt. Payments have been made monthly.


SOURCE: COOK ISLANDS NEWS/PACNEWS

Posted by Staff Reporter : PNG Today on 5:09 PM. Filed under . You can follow any responses to this entry through the RSS 2.0. Share this Article

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