Once buzzing with activity, the former CCECC compound in Avarua has gone into disrepair. EMMANUEL SAMOGLOU / 20111348
For nearly two years, Government has been trying to recoup $13 million from a Chinese firm, which is alleged to have carried out shoddy work on the nation’s largest-ever infrastructure project. Its fight continues with no sign of a resolution in sight.
China Civil Engineering Construction Corporation (CCECC) was engaged to carry
out the replacement of pipes in Rarotonga’s aged water network infrastructure
eight years ago.
project was stage one of Te Mato Vai – billed as the largest infrastructure
project in the nation’s history, with a price tag of just under $90 million.
time, Te Mato Vai was described as a triumph of diplomacy that saw the
governments of the Cook Islands, New Zealand, and China combine their efforts
to form a “tripartite agreement” to deliver an aid project. It was said to be
the first time China had engaged in such an arrangement.
2014, that exuberance began to dissipate.
whistleblower – who was working on the project as a material quality specialist
- came forward with claims that the quality of work being undertaken by the
CCECC was falling below internationally accepted standards.
forward to September 2018, and a report by a New Zealand based consultancy
called Opus –now known as WSP – would bring to light further claims of poor
workmanship and raised questions over the materials used by the Chinese firm.
responded to the report with a full-scale offensive, calling on the CCECC to
replace 17kms of pipeline laid by the company. But CCECC disputed the findings
in the report.
CCECC workers carrying out work on the replacement of Rarotonga’s rings mains in 2014. EMMANUEL SAMOGLOU / 20111345
when lawyers got involved.
recent interview with Cook Islands News, Prime Minister Mark Brown – who was
Deputy PM under the Henry Puna-led Cook Islands Party Government at the time –
was asked about the status of the Government’s attempts to recoup costs for the
dispute is with the contractor in terms of the quality of the work, and the
work done that wasn’t up to the standard we signed up to in the contract,”
moment we are in arbitration, and our lawyers are talking with their lawyers.”
findings in the 2018 report were made public, government announced it would be
going ahead with the necessary repairs on the work carried out by CCECC to keep
Te Mato Vai on track.
million contract for the work was awarded to local company Landholdings Ltd –
which had completed a water reticulation improvement project in Avarua in 2013.
work – which finished earlier this year - took the price tag for stage one of
Te Mato Vai well above $60 million, and what was originally budgeted.
funding for the project was to come from the Cook Islands government, a $15
million grant from the NZ government, and a $23.5 million loan from China’s
Export Import Bank at a favourable interest rate.
carrying out the remedial work to address what he described as substandard work
by the CCECC, Mark Brown said government would not go further into debt.
fortunate with New Zealand that they were able to come in and provide support
to remedy the deficiencies that we identified in the ring mains, so that hasn’t
slowed down the project,” he said.
effect, New Zealand taxpayers ended up paying the bulk of the bill for the
alleged inferior workmanship by the CCECC.
between the Ministry of Finance and Economic Management and the CCECC began in
2018 to address the Government’s grievances.
from the CCECC flatly denied the government’s allegations and the claims made
in WSP report. “The pipeline as is, has been built and tested, approved, paid
for and accepted as completed,” a CCECC project manager told Cook Islands News
at the time.
the gulf between both sides, it was reported that Financial Secretary Garth
Henderson described initial talks as a “friendly” consultation.
arbitration began in March this year, and has also involved the Crown Law
office. But the government has been silent on how the process is panning out.
outset, the Opposition Democratic Party called for an independent public
inquiry into Te Mato Vai to address the CIP Government’s handling of the
project and its escalating budget. The Demos also questioned Government in
Parliament on the matter.
leader Tina Browne said her Party has never been updated on the remediation
process by MFEM.
keeping the Opposition informed, should be a normal part of MFEM responsibility
to Members of Parliament who represent thousands of Cook Islands voters, who
are the taxpayers of this country,” Browne said. “That fact seems to escape
MFEM and other government entities.”
the Party’s calls for an inquiry, Browne said: “There has been no response,
which is not surprising and is par for the course for this government. Ignore
the public and all calls for transparency.”
Islands News attempted to receive comment from the CCECC for this article.
to the company’s office in Avarua discovered only one staff member remaining in
the country. His knowledge of the project was minimal, as he said he
participated solely on the building of Apii Nikao – widely regarded as a
successful project undertaken by the CCECC and commended by the community.
The rusty frame of a tractor at the site of the former CCECC compound in Avarua.. EMMANUEL SAMOGLOU / 20111348EMMANUEL SAMOGLOU / 20111346
Minister Mark Brown said he remains optimistic that a resolution can be
reached. And he is quick to point out the dispute hasn’t eroded the country’s
relationship with China.
with China is still very strong, and we see it as valuable in the long term for
us, so we’ll continue building that strong relationship with China,” he said.
we’re also very clear that when it comes to business, we want business done in
a certain way. The Cook Islands has put in place certain standards, certain
policies, that we want local companies engaged as part of any donor’s
contribution to us, including New Zealand and Australia.
or the other, there will a conclusion to this matter and we’ll see how it
transpires from there.”
declined to comment further and referred additional questions to Secretary
of questions sent to Henderson earlier this week for an update on the
arbitration process were not responded to by the time this edition went to
print. However, MFEM did respond to one query sent by this newspaper.
April, the Government has spent $25 million on the Covid-19 wage subsidy, a
form of financial assistance it describes as “lifeline support”.
At that rate, recouping the full cost of the
remedial work from the CCECC could provide an additional four months of vital
Covid-19 financial assistance to Cook Islanders without forcing the Government
to take on more debt.