6 Jul 2006

Tonga planning the sale of key state assets

10:24 am on 6 July 2006

Tonga is considering the sale of its phone company and post office, along with its share in the Westpac Bank as it struggles to find the money to meet redundancy payments and huge pay increases for public servants.

Over 800 people have received their redundancy money over the past week and the first of the large pay increases agreed to after a prolonged strike last year have been paid out.

The government is under severe financial pressure with the International Monetary Fund declaring last month its economic prospects were highly uncertain.

The finance secretary Aisake Eke says the payments have come from government reserves but asset sales will be needed.

He says attempts to sell the government's 40 percent stake in the Westpac Bank of Tonga are yet to be completed.

Our correspondent in Tonga, Mateni Tapueluelu says the Government has ear marked other assets for sale.

"they have indicated that businesses like the telephone company, the post office, the Tonga Chronicle - a newspaper owned by the government - will all have to be privatised."