Rini questions Australia’s intentions over Undersea Cable project
By Gary Hatigeva
FORMER Finance Minister and Member of Parliament for Marovo, Snyder Rini has accused Australia over the manner in which she has become a major player in the Fibre Optic Cable Project for Solomon Islands.
Mr Rini came out blasting on the project when contributing to debates on the Appropriation Bill 2018, which is said to have captured more attention in the budget, besides the Tina Hydro project.
He recalled that the new Prime Minister, Rick Houenipwela, when minister of finance in 2013-14, had pushed hard to see the cable project established, which a deal was signed with the Asia Development Bank (ADB) who put in funds to support its initiation.
But Rini revealed that unfortunately, the ADB funding allocation was not enough to meet costing of all the international bidding tenders.
Moreover, the former Finance Minister further revealed that when the former government came into office in 2015, they changed the structure in shareholdings, which initially established a 51 percent share for the National Provident Fund (NPF) and a 49 percent share to Our Telekom.
But Rini stressed that with views the local Telekom being a retailer cannot be part of a wholesaler, the government therefore moved to change the shareholding structure.
“So we came up with the new structure where the government through ICSI got the 51 percent share and gave the 49 percent to NPF,” Rini explained.
The former finance minister further revealed that with these changes in shareholding structures, the ADB decided to pull out its funding, but according to Fairfax Media, the lack of transparency in that deal prompted the Asian Bank to withdraw its support.
However, Rini revealed that because of the new shareholding structure, the government was left to raise its 51 percent contribution knowing that NPF already has its share of contribution ready.
The government’s share was however raised sooner than anticipated, but was only made possible through a bond arrangement between the two parties.
With the needed money raised, the joint initiative went and engaged a Chinese cable company (Huawei) having been the lowest bidder of all the others, which somehow sparked a serious concern for Canberra.
During that time, the former minister of finance further recalled that Australia took measures to block any channelling of the cable through Australia as an initial landing spot for the cable, based on security concerns and threats.
Rini said because of the situation, the partnering group looked into other options, and was able to pick up Jayapura as the new landing site for the cable, which would cost the SI government USD$52 million, $16 million less than the USD$68 million if it was to come through Australia.
All these happenings according to international media reports suggested that Australia was fine with the idea until suddenly, it wasn’t.
The problem according to these reports was when Solomon Islands started looking to China’s Huawei, a smartphone and telecommunications equipment maker based in Shenzhen, to lay the cable.
“Australia has been leery of Huawei before, and so has the US,” a Steve Mollman, Quartz online Asia Correspondent reported.
In 2012, cybersecurity fears led Australia to ban the company from tendering for contracts in the $38 billion National Broadband Network, on advice from the Australian Security Intelligence Organization.
In 2012, US lawmakers blocked deals and mergers involving Huawei and its crosstown rival ZTE, with worries that potential Chinese state influence on the companies could pose a security threat, and the Solomon Islands issue is no exception.
Meanwhile, Rini added that when Australia heard about all these moves to go that direction, it quickly offered to fund two thirds of the expense internationally, and the Solomon Islands government to meet the remaining one-third.
The deal stipulated that when the project reaches its domestic status, the Solomon Islands government is to meet two thirds of the remaining costs while Australia focusses on the one-third.
“But the question is why didn’t Australia come in that time when we were stranded with the project and needed the assistance, why? Where were you when we struggled to get the project started?” the Marovo MP questioned.
The former finance minister however suggested and claimed that all these new developments with Canberra’s involvement is an indicator that Australia has a vested interest in the project, and that needs to be looked into.
“And questions also needed to be asked about their intention,” Rini added.
He then questioned why a special company (Vocus) was engaged into owning the cable and why the company will look after the cable for its maintenance and other related areas.
He also questioned the total costing of the two-third specified for the Solomon Islands government to meet when the project starts running in the domestic waters, which figures have not been revealed.
Currently, Solomon Islands relies on satellite-based services that are slow, unstable, and expensive.