The report shows the government spent about $38.4 million below the budget estimate for capital expenditure in the 2017/18 financial year.
The total budget and approval for capital expenditure in the year was about $60.5m, of which the government spent only about $22m.
The huge amount of unspent capital expenditure is one of the reasons for the surplus of about $36.7m recorded in the net operating balance of the general government sector for the 12 months ending June, 2018.
The quarterly financial report said the variance in capital expenditure was mainly due to timing of spending and the ability to contract for services by the end of June 2018.
The delays meant that these projects were now expected to roll over to the 2018/19 financial year, the report said.
“Capital projects Te Mato Vai (water project) stage one, road and pipe easement (below $0.65 million) and Te Mato Vai stage two (below $8.15 million) have been hindered by land matters. Landowner meetings are an ongoing process, as the Cook Islands government works toward obtaining consent from landowners to enable site preparations and construction,” the report.
The contract for the design and construction of stage two was awarded to McConnell Dowell in August last year. Work began in early March this year.
The report said there had been some delays due to the weather which had destroyed some of the road access to the intakes.
The Water and Sanitation Programme (WASP) was below budget estimates by about $1.9m as a result of legal matters and technical issues resulting in delays. The Water Network Maintenance was below budget estimates by around $0.5m as a result of scheduling. The Rarotonga Road Sealing Programme has also experienced delays by about $1.2 million due to scheduling of project activities.
The Aitutaki Renewable Energy capital project was below budget estimates by $2.3m, also as a result of delays in project activities. Pa Enua Renewable Energy capital works were also below budget estimates by about $4.1m due to scheduling issues.
“The Manatua Submarine Cable was supported to enable reliable and affordable broadband connections.
“This project has been developed in partnership with the governments of Samoa, French Polynesia and Niue who have all contributed to the procurement of the cable Manatua’s main trunk, (which) will connect directly to Samoa and French Polynesia with branching units linking Niue, Rarotonga and Aitutaki,” the report said.
“Due to the prolonged preparatory work and the procurement process to be complied with, this has delayed the project resulting in the major underspend of the loan component of this project.” In February 2018, the report said, bids were invited for the design and construction of the cable which resulted in Tyco Electronics Subsea Communications (TESubCom) being winning the contract to supply it.
The consortium is now working through the contracting process and it is anticipated that Manatua cable will go live in 2020. “For the Cook Islands, Avaroa Cables Limited is the Manatua consortium member. The government of New Zealand has granted $15 million to support the project, and a grant funding agreement was signed between the governments of New Zealand and the Cook Islands for the disbursement of the funds in April 2018,” the report said.
“The Asian Development Bank has approved a OCR loan allocation of up to US$15 million to assist in (a) financing the sections that connect Rarotonga and Aitutaki to the main section of the cable system; (b) finance construction of the landing stations in Rarotonga and Aitutaki, (c) finance the setting up of a Project Management Unit (PMU) to support the implementing agency and (d) to co-finance the main section of the cable system proportionate with the Cook Islands’ share of the Manatua cable.”