$10m grant may go to TMV

Friday November 30, 2018 Written by Published in Politics

Financial secretary Garth Henderson says a recently-announced $10 million grant from China may be able to be used to remedy problems with stage one of the Te Mato Vai project.


However, further discussions would have to be held between the government and its Chinese counterpart to find out whether this will be possible, he said.

China is to provide $10m to the Cook Islands in grant funding for a project that has yet to be determined by the Cook Islands government.

“The grant of $10 million that was offered (by China) is of course untagged, so that’s a useful thing, maybe an opportunity to direct that towards dealing with some of the costs related to the (Te Mato Vai) project … possibly,” Henderson said.

“The mere fact that it is untagged means it could be directed to stage one, but that would be a matter to discuss with them moving forward.”

Stage one of the $90m project, which was delivered by the China Civil Engineering Construction Corporation (CCECC), failed to meet required standards.

The Cook Islands government is not pleased with the quality of workmanship and materials used in stage one, which was completed two years ago at a cost of $25m.

A delegation from Ministry of Finance led by Henderson has discussed the issue with CCECC, but the two parties have failed to reach an agreement.

Henderson said he had presented a report to Cabinet following the final meeting with CCECC earlier this month.

He said the team dealing with the issue had hoped it would be discussed at the recently held Asia-Pacific Economic Cooperation (APEC) meeting where prime minister Henry Puna met China president Xi Jinping.

At that meeting, held in Papua New Guinea, president Jinping sanctioned the $10m grant.

“I don’t believe there was any substantive discussion around the project as it was a high level meeting,” Henderson said.

Meanwhile, government is now considering legal action against CCECC, which has accepted no liability for problems with the stage one project.

An independent report done by Opus, an international infrastructure consultancy based in New Zealand, indicated that materials used in stage one did not conform to required standards and that workmanship had been poor. A local source close to the project said some of the components used in stage one even lacked markings to allow the identity of the manufacturer to be traced.

The report, which has not been released to the public, is understood to have taken a close look at the stage one ring main and the quality and installation of key components.

“We pretty comfortable that we have collected enough information and we have a solid ground upon which we can take some form of (legal) action,” Henderson said.

The cost of stage one was met through a loan from the EXIM Bank of China.

Concerns about the quality of materials and workmanship contradict deputy prime minister and Finance minister Mark Brown’s comments about the stage one project early last month.

A CINews story quoted Brown as saying that material quality and work done by the CCECC had been confirmed as meeting standards signed under the contract.

“There have been concerns raised about the quality of the materials that were used but (they have) been sent away for testing and (the results) have confirmed that that’s the standard of material that was contracted for.”

Brown said some joints might need to be replaced, adding that the work would be done by the CCECC.

            - Rashneel Kumar/Cameron Scott

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