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Overburdened debt, unsatisfactory Chinese projects

By Helen Greig RAROTONGA, Cook Islands (Cook Islands News, March 5, 2010) – Finance minister Wilkie Rasmussen says it’s likely government will no longer approve the planned $37.5 million China soft loan for Rarotonga road and water upgrades.

He says apart from putting extra strain on the country’s already high debt level, government may be "veering away from Chinese support".

"The loan has not been signed and I am very hesitant to sign it. When minister (of foreign affairs) Robert Wigmore went to Wellington last month, he told the Chinese ambassador that it (the project) is on hold."

The minister says government must look at the alternatives to the China loan funded project.

Last November former finance minister Sir Terepai Maoate said it was a significant day for the country as it embarked on the road to greatly improving Rarotonga’s infrastructure.

He told parliament that government had formally entered into a loan and framework agreement through the Chinese ambassador in Wellington.

Sir Terepai had hoped that the projects would start this month.

Rasmussen says he is aware that China Civil Engineering Construction Corporation officials are in the country this week possibly to push for the projects to begin.

But the minister wants to err on the side of caution before committing the country to the Chinese soft loan.

He says acting finance secretary Kevin Carr has already given him a ‘pre-warning’ that it will be tough going for government in considering new debts.

Rasmussen says Asian Development Bank assessments have confirmed that the country can’t afford to take on much more debt.

"For us (cabinet), it’s trying to achieve the things that are achievable and in sight and within the time we are in government," he adds.

The minister says he doesn’t want to see any more Chinese projects here that are an indictment on the decisions made by government, such as the courthouse which still has construction and maintenance problems.

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