Cook Islands hope NZ will help repay massive Chinese loan
Updated
China has given the Cook Islands a $US28 million dollar loan to fund upgrading of the water supply system and roads on Rarotonga, and $US11 million dollars in grants for projects in the outer islands, with the Cook Islands Government hoping New Zealand aid will help them pay it back. Half of all contract work will be available to local businesses, a change from previous Chinese policies which saw all projects constructed exclusively by Chinese companies.
Presenter Bruce Hill
Speaker: Cook Islands Deputy Prime Minister Sir Terepai Maoate
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MAOATE: The loan part of it is for two major projects and that is to put in place the water ring round the island of Rarotonga, which will be in the vicinity of about $NZ25 million. And the other one of that is the road upgrade following the development of the water ring around the island.
HILL: Previous Chinese infrastructure projects in Pacific Island countries have involved Chinese companies and Chinese workers doing most of the work. Will any of the work, any of this money actually go to local companies in the Cook Islands?
MAOATE: We have established this understanding, with the sports complex that has been halved, 50% goes towards building the stadium and 50% goes to upgrading other facilities on the island and that policy is a good policy for us. Because the policy of China was total materials, total labour force comes from China. Our persuasion and our negotiation they will agree to that and they said to us the same policy applies to these next two projects. And also we have brought to them smaller projects to deal with the accumulated grant funds they have given us over the years and it's time for us to put that to them, and that amount available is about $20 million grant fund, and we have represented the projects for that in the outer islands and Rarotonga and they have accepted that and it will be sent to the same as the other loan to the Chinese Government.
HILL: There has been a previous big infrastructure project built on Rarotonga by the Chinese and that was the new court house, but there were complaints more or less straight away after that it was starting to fall apart, there were some concerns about the quality of the construction. Is that going to be addressed?
MAOATE: I asked the ambassador himself. The ambassador came before this project where the sposrts stadium was built, and he personally visited those two projects and we agreed that the quality of some of the work under these two projects is not properly done. So he reported that and the company has actually came back and did the two projects again and it is now much, much better. Their policy is now to make sure that this stadium is built to a very high standard. And I think I can see the quality of it and the progress of it is going very well.
HILL: It's a great deal of money. Are the Cook Islands going to be in a position to be able to pay this loan back later on?
MAOATE: We hope New Zealand will be at our aid to assist us with this.
HILL: Is there any foreign policy aspect of this? Have the Chinese asked for anything in return for this very large loan?
MAOATE: One China policy is what they want and they really wanted to bring their people to work and that sort of thing, but they kind enough to give us a 50-50. I think this is probably the only place that they have agreed to have 50-50 sharing of the labour force.
HILL: Why do you think they are giving such a large amount of money to the Cook Islands. What's in it for the Chinese, do you think?
MAOATE: Well, I think they trust us, because our system management is prudent and I think that is one major factor that they have taken us on board.
HILL: They didn't ask you for a naval base or anything did they?
MAOATE: I don't see anything suspicious. If they say anything suspicious to me, I will tell them no.
