Nukuʻalofa, Tonga — Tonga’s Supreme Court has ruled that the Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communications (MEIDECC) acted unlawfully in awarding multi-million paʻanga contracts under the government’s National Water Tank Project, in a decision expected to have wide implications for public procurement practices.
In a landmark judgment delivered on 11 May 2026, Lord Chief Justice Malcolm Bishop KC found that the Ministry breached procurement laws and a binding agreement when it awarded contracts for water tanks and septic systems without fair competition.
The Court determined that in August 2022 the Ministry used a limited bidding process to procure 1,500 water tanks valued at more than TOP$3.2 million, but unlawfully invited only one supplier, MJ Watertanks, despite identifying other capable local companies.
It ruled that procurement law required MEIDECC to invite more than one bidder where possible and that its failure to do so denied other suppliers a fair opportunity to compete.
The judgment also found that the Ministry’s procurement process was flawed because it effectively pre-selected the winning supplier before any bids were invited, creating bias and undermining fairness.
The Court further criticised MEIDECC for failing to publish the contract award as required by regulations, describing this omission as a breach of transparency obligations.
In addition, the Court ruled that a series of contracts awarded in October 2023 and April 2024, worth more than TOP$7 million, were unlawfully disguised as “grant agreements” in order to bypass procurement rules.
These agreements covered the supply and installation of 1,200 water tanks and gutters, 500 additional tanks for Vavaʻu, and 400 septic tanks, all awarded directly to MJ Watertanks.
Court Rejects Grant Defence
MEIDECC had argued that the use of grant agreements was justified by urgency and donor funding requirements, particularly support from New Zealand.
However, the Court rejected this argument, finding that the transactions were procurements in substance and could not lawfully avoid the requirements of Tonga’s procurement laws simply by being labelled differently.
The Court also found that the Ministry’s actions breached a Deed of Release and Indemnity Agreement signed in November 2022 following earlier litigation.
That agreement required MEIDECC to either share work fairly among local suppliers under limited bidding or conduct publicly advertised tenders. Instead, the Ministry bypassed both options by directly awarding contracts, depriving Rotomould of a reasonable chance to secure a share of the work.
Lord Chief Justice Bishop concluded that these actions amounted to a failure to ensure a “fair and equitable” distribution of contracts and violated both procedural and substantive expectations created by the government’s agreement with the company. The Court noted that Rotomould suffered financial loss through being excluded from the process, describing it as the loss of a real and measurable opportunity to compete.
The ruling further found that the Ministry continued to breach the agreement even in 2025 allocations, where contract shares were not distributed evenly among suppliers as required.
As a result, the Court declared the procurement decisions unlawful, ordered that damages be assessed, and directed that future contracts under the National Water Tank Project must strictly comply with the Public Procurement Regulations.
It also referred the ongoing project to the Minister of Finance and the Government Procurement Committee to ensure proper oversight.
The decision is seen as a significant ruling on government accountability, reinforcing the requirement for transparency, fair competition, and adherence to the law in the use of public and donor funds in Tonga.
