Transcript
MARK BROWN: Oh well yes. What we have got here is a contractor that has not delivered what we paid for. 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.,
DON WISEMAN: There have been reports that CCECC has no intention of doing any remediation work. Is that right?
MB: Well again that will go through the process that we have in place for dispute resolution but right now our priority is to have the water network completed by the end of next year and Stage Two is progressing well. So any of the pipeline that needs replacing or fixing from Stage One needs to be done in time to meet the schedule that we have for the completion of the water intakes when the whole system becomes commissioned. Fortunately this project is a tripartite agreement that we have between the governments of the Cook Islands, China and also New Zealand. So New Zealand is very keen to see this project to its completion and they have come to the party in terms of any remedial work that needs to be done in Stage One in order to ensure that the entire network is ready for commissioning by the time Stage Two is completed.
DW: You do though have, admittedly a soft loan, but it is a loan from China to help pay for this and it would appear the money has been spent on something that is basically a waste of money.
MB: Well of course. This is a situation that you have with numerous contracts that you enter into but it is the process involved in quality assurance, making sure that you can get compensation for what has not been delivered. We are doing that right now through the legal process that is available to us, but yes it is disappointing that we entered into this contract with CCECC. They haven't delivered to the standards we wanted in terms of some of the fixtures and the joints and the pipeline and we want to make sure those are fixed and remediated as soon as possible.
DW: Who will do the remediation?
MB: Well we have got a number of local companies very capable of doing that work. It's not a large expanse of work that needs to be done. We have got companies locally that capable of doing that work.
DW: Does CCECC still have any involvement in the project at all?
MB: No. Their Stage One was completed a couple of years ago and CCECC essentially have no more involvement in the country. Their last project was the Nikao School project which was opened earlier on this year, so there is no further work involved with that particular contractor here in the Cook Islands.
DW: Would you have them back?
MB: At this stage there are no plans to have CCECC back to do any work in the Cook Islands.
DW: In the meantime, as you say it is a tripartite arrangement and New Zealand has indicated it is prepared to help out with these additional costs, but these additional costs are huge aren't they?
MB: Well we are talking about $NZ13 million in terms of work that needs to be done, out of a contract of total work of about $NZ90 million.
DW: It wasn't $NZ90 million at the start though was it, it's gone up?
MB: Those were estimates. The estimates six years ago are a lot different from what the final product is six years later.
DW: So is that a concern. You have got to come up with some more money?
MB: No we have covered the extra costs that need to be done. All we needed to get was the $NZ13 million required to repair parts of Stage One, the ring main and this is where New Zealand has come to help us in that regard, to ensure the ring main is repaired and completed in time for the commissioning of the entire network. The only borrowings we have had from the total project were the borrowings with the EXIM Bank for Stage One, which was to the tune of $NZ23 million. So all in all this has been a great project for the Cook Islands in terms of - one of the biggest projects in fact that the country has ever undertaken, since the opening of our international airport. This is the replacement of the entire water reticulation system on Rarotonga, in order to deliver clean and consistent and potable water. So that's a big project for any country to undertake and for us we are quite happy that we have been able to work with New Zealand and ourselves to accommodate those costs, as design has been confirmed, so there is no additional borrowing that the country has to undertake to complete this particular project.
DW: As you say you want to use local businesses to do the repair work, One of the big issues I understand has been that CCECC were using inferior materials, so are you going to use different this time round?
MB: Well the report that I received indicated that the pipeline material was to the standard that was purchased. The difficulties were in the workmanship, involved particularly in the joints, where the pipelines were joined together. This is where the concerns are, rather than in the actual material itself.
