Chinese Government provides TOP 3 million grant for Phase 2 of International Dateline Hotel Renovation Project (Project ID#63641, #37616, #42192)

On March 30, 2001, the Chinese Government and the Government of Tonga signed a preferential loan framework that specified the terms of lending for the Phase 1 of the International Dateline Hotel Renovation Project. Then, on June 11, 2001, the Export-Import Bank of China and the Government of Tonga signed a $4,230,118 (TOP 9 million) concessional loan agreement for Phase 1 of the International Dateline Hotel Renovation Project. The loan agreement (captured in Project ID#37616) was signed by Zhao Wenzhang, Deputy Governor of China Eximbank, and Siosiua ‘Utoikamanu, Tonga’s Minister of Finance. The borrowing terms of the loan were as follows: a 2.5% interest rate and a 15 year maturity. Tonga’s Ministry of Finance on-lent the proceeds of the loan to Janfull International Dateline Hotel Ltd., a special purpose vehicle and joint venture of the Chinese Government and the Government of Tonga (see Staff Note 3). The on-lending agreement was also signed on June 11, 2001. The Government of Tonga also issued a sovereign guarantee in support of this loan to Janfull International Dateline Hotel Ltd. The purpose of Phase 1 was to add a new, 54-room wing to the International Dateline Hotel (晋富国际日界限酒店) in the city of Nukuʻalofa and redevelop the waterfront area for for recreation and water sports activities. Tianjin Construction Engineering Group Corporation was the contractor responsible for implementation. The construction was expected to last 12 months, and it began on around December 22, 2001. Construction ended on July 2, 2003. Then, in April 2006, China Eximbank and the Government of Tonga signed an RMB 38 million government concessional loan (GCL) agreement for Phase 2 of the International Dateline Hotel Renovation Project (captured in Project ID#63641). The borrowing terms of the loan were as follows: a 2.5% interest rate and a 9 year maturity. Tonga’s Ministry of Finance on-lent the proceeds of the loan to Janfull International Dateline Hotel Ltd. The Government of Tonga issued a sovereign guarantee in support of this loan to Janfull International Dateline Hotel Ltd. The Chinese Government also provided a TOP 3 million grant to the Government of Tonga for Phase 2 (captured in Project ID#37638). The purpose of Phase 2 was to construct the Fa’onelua Convention Center (whose main conference hall holds 400 people), 30 additional hotel rooms, office buildings, gyms, and bars. China Civil Engineering Construction Corporation (CCECC) was the contractor responsible for the implementation of Phase 2. Construction began on July 3, 2006. The Fa’onelua Convention Center portion of the project was completed and handed over on January 11, 2007. The project as a whole was completed on September 20, 2007. The renovation was completed in time for Tonga to host the 38th Pacific Islands Forum meeting from October 23-26, 2007.

Additional details

This project is also known as Fa’onelua Convention Center Renovation Project and Phase 2 of the International Dateline Hotel Expansion and Upgrading Project. The Chinese project title is 汤加国际日界线酒店项目. The Tongan project title is Ngaue Fakalelei'I 'oe Hotele Dateline. Neither of the China Eximbank loans that supported this project are included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. In 2001, a joint venture called Janfull International Dateline Hotel Ltd. was established to manage the International Dateline Hotel in Tonga. It was jointly owned by Janfull Group (51% ownership stake) and International Dateline Hotel Ltd. (49% ownership stake). Janfull Group was owned by China’s Ministry of Commerce and International Dateline Hotel Ltd. was owned by the Government of Tonga. This joint venture is captured in Project ID#42192. In August 2010, the Government of Tonga announced its intent to dissolve the joint venture, citing differences with Janfull Group (a Chinese state-owned enterprise). At the time, the hotel was performing ‘well below international standards’, according to an ADB report. In June 2011, Tonga’s Minister of Public Enterprises successfully applied to have the joint venture placed into liquidation by a court. This move was designed to allow the Government of Tonga to regain control of the hotel—once it had proven its loan to the liquidator’s satisfaction—and then seek private investment or ownership to reestablish the hotel as a high-quality accommodation facility. The Government of Tonga purchased Janfull Group’s 51% ownership stake in Janfull International Dateline Hotel Ltd. after settling unpaid debts (worth $11 million) to China Eximbank. The Government of Tonga then asked the International Finance Corporation (IFC) to served as a transaction advisor and structure, and competitively tender and award a project for the rehabilitation and operation of the International Dateline Hotel on a Public-Private Partnership (PPP) basis. After longer-than-anticipated negotiations, a long-term management concession agreement was signed with an international hotel operator – Tanoa Group – who completely redeveloped the hotel. As of late 2016, the hotel reopened. There have been no further costs to the Government of Tonga since the concession agreement was signed; the hotel is now the largest in Tonga, and a high-quality (4.5 star) hotel. Occupancy rates were estimated at 39% in April 2017. The concession loan for Phase 1 was likely denominated in RMB. However, AidData has only managed to identify the USD equivalent of the face value of the loan. This issue requires further investigation. China Foreign Construction Corporation, Guangsha Chongqing Construction (Group) Co., Ltd., China Civil Engineering Construction Corporation (CCECC), Jiangsu Construction Group Corp., Hunan Construction Engineering Group Corporation, China National Overseas Engineering Corporation, Qingdao Construction Group Corporation were all invited to tender, but CCECC won the contract for Phase 2.

Number of official sources

22

Number of total sources

39