MINISTER of Finance and Treasury, Snyder Rini says the government is considering the costs and benefits of the planned new submarine cable project.
According to Solomon Oceanic Cable Company (SOCC), the total cost, including financing cost, civil works, supporting studies, legal costs, project management costs and contingencies, is expected to be in the range of USD68 million.
SOCC which is co-owned by Solomon Islands National Provident Fund (SINPF) and Solomon Telekom (Our Telekom) is managing the project.
Rini told Parliament this week that according to a report less than three percent of people will use the cable.
“So what about the 85 percent of people in the rural areas? he asked.
“We spend $100 million for less than three percent or we use the 100 million to develop the rural areas, which the government is trying to do.
“Also, if we look at the domestic network, communication is not improving,” he said.
Rini believes that the focus should be on improving their domestic communication to cover 85 percent of people.
SOCC adopted a public/private partnership (PPP) model where funding is being provided in the form of equity by SINPF (51% shareholder) and Our Telekom (49%), Asian Development Bank via support in the form of grants and sovereign debt through the Solomon Islands Government, and private debt funding from the ANZ bank and the PSOD (the investment banking arm of the ADB).
Rini said the country’s sovereign debt is around $700 million.
“If SOCC comes in, follows by Tina hydro, USP campus, that will more than $200 million US debt.
“That is too much and if we use all of this, where will the government get loan to build infrastructures like bridges and roads,” the Finance Minister said.
He said this is the reasons why Government is still looking at options on the cable issue.
Member of Parliament for Aoke Langalanga, Mathew Wale said the decision is delayed because of no rational debate to come to a constructive conclusion on it.
Under SOCC’s supervision, an international cable will be developed landing in West Honiara, while a further two domestic cables will run from West Honiara to Noro, Western Province and to Auki in Malaita.
At each landing point, some new ducts will be required to carry the cable to where it can link to existing Telekom ducts.
By EDDIE OSIFELO