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Lolo proposes to use Hawaiki to pay for bond debt, among other things

Gov. Lolo Matalasi Moliga

Pago Pago, AMERICAN SAMOA — Gov. Lolo Matalasi Moliga has proposed legislation which will earmark and allocate revenues from bandwidth sale of the American Samoa branch of the Hawaiki Submarine cable, which is overseen by the American Samoa TeleCommunications Authority (ASTCA).

The Administration’s proposed bill states that the Hawaiki branch and associated Hawaiki Indefeasible Right of Use (IRU) shall be booked as an asset of ASTCA, which shall have the duty to operate Hawaiki and sell its bandwidth.

And ASTCA shall create a separate Hawaiki accounting entity to account for Hawaiki expenses and revenues.

The proposed measure defines Hawaiki revenues  as any revenue coming from Hawaiki direct wholesale bandwidth sales to third parties. Such revenue shall not include what ASTCA considers as its operating revenue.

Instead, ASTCA operating revenue includes but is not limited to local network services revenue, long distance network services revenues, International Private Line Circuits, and mobile and wireless revenue.

The proposal gives a breakdown of Hawaiki revenue earmark and allocation:

•     50% to ASTCA

•     25% to the American Samoa Government Employees’ Retirement Fund (ASGERF) to fund its unfunded liabilities; and

•     25% in an earmarked account to pay the American Samoa Economic Development Authority (ASEDA) 2018 bond debt related to the financing of the Hawaiki branch and IRU.

In a cover letter, which accompanied the proposed bill to Fono leaders, the governor explained that the measure aims “to effectively address our growing Unfunded Liability and to ensure that revenues are available to fully liquidate our bond debt.”

According to Lolo, the Fono’s support “of our struggles to diversify our economy by our attempt to create a third economic development pillar through the development of our technological capacity, is deeply appreciated.”

“This endeavor, which is still in its infancy stages of development, could not have materialized without the significant support of the Legislature,” Lolo wrote, noting that he is grateful for the Fono’s confidence accorded to the Executive Branch, “to implement programs to facilitate the accomplishment of our collective vision, inherent in the sustainable growth of our economy along with the perpetual enhancement of our people’s quality of life.”

“The envisioned financial and economic benefits, which prompted our decision to invest in the Hawaiki Cable, are being realized as manifested in the submission of this piece of legislation, causing the distribution of generated revenues from the acquisition of this significantly valuable assets,” he noted.

In conclusion, Lolo said he looks forward to the Fono’s “favorable and speedy approval of the legislation to ensure that existing challenges such as the ballooning unfunded liability as well as our public debt will be effectively mitigated.”

The proposal is being put into bill format before it’s introduced in both the Senate and House.