THE GOVERNMENT of Tonga today received a letter from the People’s Republic of China to defer loan repayment to China scheduled to begin this Saturday, September 21st 2013.

The Hon. Prime Minister, Lord Tu’ivakano revealed this in the Legislative Assembly this morning.

He said the letter was received this morning and in their interpretation, China has approved Tonga’s request.

Hon. Prime Minister says in talks with China’s Prime Minister, Tonga asked for a 10 year amnesty period on its loan repayment. In turn, China asks to reduce it to five years.

Lord Tu’ivakano says if no letter received from China a trigger mechanism at Treasury Department would prompted Reserve Bank to automatically pay the first installment.

“If we were to settle the loan repayment on Saturday, bank interest will be 11 million and principal loan amounts to 13 million,” says Lord Tu’ivakano.

The Prime Minister adds we should be grateful China has approved Tonga’s request.

Lord Tu’ivakano says Government has yet to provide Parliament with detailed information as both parties are yet to make final arrangement.

“Negotiation between the two parties continues,” confirmed the Hon. Prime Minister.

Lord Tu’ivakano responds to a concern raised by Tongatapu 1 constituency MP, ‘Akilisi Pōhiva that Government is yet to disclose information on the proposed St George's Palace project and details on Chinese loan repayment arrangement.

The Hon. Prime Minister says negotiation is underway with businesses that secured loan from Government’s TOP$118 loan from China.

“Some businesses affected are yet to sign a loan agreement with Government from the China loan. The understanding raised in Parliament was for those businesses to repay loan and not tax payers.

Government is negotiating with the businesses affected to repay their loan. There is no free ride in making loan for rebuilding without repaying it. They must pay it back,” the Hon. Prime Minister explains.

Meanwhile, Deputy Prime Minister, Samiu Vaipulu told Members of Parliament St George's Palace proposed project is not a loan and therefore disclosing information to Parliament is not necessary.

“Parliament is only consulted when Government makes loan up to TOP$15 million. St. George's Palace project is Government’s long awaited plan initiated by His Late Majesty King George Tupou V as part of the political reform. It was his vision for the implementation of the project,” explained Hon. Vaipulu.

He adds diplomatic talks on the China loan continues with the Chinese authorities.

“Detailed information on that negotiation is not publicized until loan repayment arrangement is finalized,” said Hon. Deputy Prime Minister.

Meanwhile the Minister of Justice called on Government to consider the plight of those affected in the 16/11 riots.

Hon. Clive Edwards says the 2006 riot was a result of a political unrest.

“It was not their fault…those affected had sacrificed a lot yet they lost legal action against some insurance companies for compensation on damaged properties,” said the Minister of Justice.

Hon. Edwards’ comments came when ‘Eua Noble's Representative, Lord Nuku urged Government to consider giving them extension on their loan repayment.

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