The consultation involved concerns with stage one of the project, which has been bogged down with problems since it was launched in 2014.
Financial secretary Garth Henderson, who led a delegation from Ministry of Finance in a meeting with CCECC earlier this month, said both parties failed to reach an agreement. This meant they would now move towards legal recourse, he added
Henderson said these legal options could either include an arbitration process, cancellation of the contract or even a lawsuit against the Chinese company.
The meeting with officials from CCECC on November 2 in Auckland, New Zealand, was based on the findings of a report compiled by international infrastructure consultancy Opus, based in New Zealand, which revealed concerns regarding the workmanship and materials used in the $25 million project to provide Rarotonga with potable drinking water.
Under the agreement, anything wrong with the project, which was delivered about two years ago, must be repaired at CCECC’s cost.
“We had a meeting on that and during the course of the meeting, it became quite clear that we didn’t have a common understanding,” Henderson said.
“The Cook Islands’ belief was they (the contractors) failed to deliver what we have paid for through a loan process (with the EXIM Bank of China), and CCECC’s position that was they accepted no liability for the findings.
“We walked out of that meeting convinced that they haven’t delivered. We basically said ‘this is not working for us, we are finishing the friendly consultation and we are going to move towards legal recourse’.”
Henderson said the MFEM delegation had collected enough information to make solid ground on which to take some form of action against CCECC.
The Opus report had revealed a “whole range” of issues that proved the contractor had failed to deliver the project, he added.
“I’m getting somebody now, because all of us are occupied with our own work, to put together all the evidence. It will be a contractor, who will examine the contract. Again, it’s good to have an independent eye to examine the legislative framework and look at all the reports that were put together, talk to some of the key officials, talk to CCECC and then compile a basic case that we can take to court.
“We’re drafting the terms of reference for that. We are feeling confident that we have got a good case.”
Between now and any appearance in court, Henderson said they expect further engagement with CCECC.
“I have a feeling that because of the mere fact we have told them we are seeking legal recourse, we might see a change in attitude from them.”
Henderson said his team had also notified the EXIM Bank of China about issues with the project while they continued dealing with CCECC.
“We have paid for a product through a loan process and I’m not going to accept this (non-conformance of materials and workmanship).
The key thing is the final certificate of acceptance hasn’t been signed and I’m certainly not going to authorise the signing of this.”
The project which is expected to be completed next year, will cost an estimated $90 million.
Stage one of the project involved replacing the inner and outer ring mains and cross mains, then connecting the new ring mains to the rest of the pipe network.