Retirement Fund — not ASTCA — owns American Samoa branching unit of Hawaiki Cable, says chairman
Pago Pago, AMERICAN SAMOA — Unless the American Samoa Telecommunications Authority (ASTCA) and ASG are able to cough up $78.1 million to the American Samoa Government Employees' Retirement Fund, they cannot "fully own" the American Samoa branching unit of Hawaiki Cable.
This is according to Vaanatiu Toafala Iafeta, chairman of the Retirement Fund Board.
Vaanatiu was responding to Samoa News inquiries regarding statements made by Governor Lolo Matalasi Moliga in his State of the Territory Address at a joint Fono session this past Monday, where he announced that ASTCA now fully owns the American Samoa branching unit of Hawaiki cable.
"This statement is not true," Vaanatiu said during an interview yesterday afternoon. He referred to the December 2017 Agreement between ASTCA and the ASGERF and said the Fund is "leasing" the cable to the semi-autonomous agency.
Samoa News understands that the Indefeasible Right of Use (IRU) is the center of the issue. Vaanatiu shared a little background on the matter. According to him, when the proposal for a loan came through, the Retirement Fund Board "had a hard time" approving it because of ASTCA's financial state.
"But we wanted to help the government, and we felt that the cable was the best investment for us to grow the Fund. We did our research," he said.
The contract is for 25 years.
The payment breakdown for the Fund's $17-million-dollar investment is as follows:
For the first four years (2017-2020) the payment amounts are 25% of $17 million ($4.25 million each year); for the 21 remaining years (2021-2041) the payments are 20% of $17 million ($3.4 million each year).
The total amounts to $88.4 million. And since ASTCA has already made two payments, totaling $10.3 million, the amount needed in order for them to fully own the American Samoa branching unit of Hawaiki cable is $78.1 million.
"That's how much it's going to cost them to buy the Fund out of the IRU," Vaanatiu said yesterday. "Right now, it is 100% owned by the Retirement Fund," he clarified.
Vaanatiu said this is based on the agreement, which he says is a "legal" contract that is yet to be amended.
Through the American Samoa Economic Development Authority, the government issued the 2018 bond series and of the $50 million in proceeds from the bond sale, $32 million went to Hawaiki cable.
In his State of the Territory Address, Lolo explained that legal prohibitions prevented additional investment by the Retirement Fund to fully cover the total cost of the Hawaiki cable and thus, set in motion the only available option of going to the Bond Market to secure required funds to pay the remaining $15 million liability.
“Our efforts to defray the cost of our remaining liability to Hawaiki cable have been successful, culminating with the disbursement of $15 million to Hawaiki, giving us full ownership of the American Samoa Hawaiki Cable Branch,” Lolo said, adding that there are “outstanding issues” between ASTCA and the Retirement Fund, which will require submission of legislation for a Fono review and decision. He didn’t elaborate.
(See yesterday's Samoa News for details).