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Call for inquiry into $50m loan

Wednesday 1 April 2009 | Published in Local


Tuesday 31: Opposition says country cannot afford to pay $5000 per person for next 20 years

The Cook Islands Party Opposition is calling for an inquiry into the new $50 million China soft loan.

Finance and economics spokesperson Norman George says while the opposition agrees in principle to the loan being spent on Rarotonga road and waterworks, it disagrees with the way government is handling the money.

“The full cost of both projects should be audited and independently costed. We ask for PERCA (Public Expenditure Review Committee and Audit) to step in and do this,” says George.

In a press release issued yesterday, George says the estimated costs from sources he has asked place the total cost of these infrastructure projects at $25-30 million.

“We do not need $50 million,” he says.

George says roads and water supplies in Rarotonga are deteriorating to such a stage that something could have been done five years ago if government had been proactive.

“It (government) is now late as usual and is reacting to criticism by residents and tourists alike to do something about our roads and water system.”

George has also accused finance minister and deputy prime minister Sir Terepai of trying to buy the next election with the Chinese loan.

“The Cook Islands Party, when elected in 2010, will renegotiate with China to reduce this loan. The next generation of newborn Cook Islanders have already been shackled with these loans. Each will pay the equivalent of $5000 each for the next 20 years,” says George.

He says China loan is reportedly a 5 percent interest loan with a repayment period of 20 years.

There is no way the country can afford to pay back the loan, he says.

Sir Terepai has recently announced that the Cooks will be able to meet the repayments with New Zealand aid through a loan buy down scheme.

But George told Radio Australia’s Pacific Beat this week, “That is absolutely absurd. It is the stupidest thing that I have ever heard a politician make in my 25 years as a member of parliament in the Cook Islands. I just cannot believe it, this man is talking about Disneyland.”

Already a former NZ diplomatic official has told Radio Australia that any request for assistance with the loan repayment is expected to be rejected by the NZ government.

Former New Zealand associate minister of foreign affairs, Matt Robson, said Sir Terepai’s hope that NZ will help repay the China loan is misplaced. - HG-