The Cook Islands is seeking legal redress for the work done by a Chinese company on the Rarotonga water supply system.
The China Civil Engineering and Construction Company built Stage One of Te Mato Vai which is one of the biggest infrastructure projects undertaken in the Cooks.
But there have been complaints about problems ever since it was handed over at the beginning of last year.
The Cook Islands Finance Minister Mark Brown said the government was disappointed with the work done by the company.
"What we have got here is a contractor that has not delivered what we paid for," Mr Brown said.
"We are now going through the appropriate avenues for remediation, what needs to be done and that's being handled now by the Ministry of Finance, dealing with the contractor."
Stage Two of the project is being built by New Zealand with commissioning set for late next year.
New Zealand has said it is happy if its aid grant to the Cooks is used to repair Stage One.