After a Chinese proposal was previously rejected, the Pacific Island of Nauru is negotiating to build an undersea communications cable that would connect to an Australian grid. The United States and its Pacific allies were having concerned if those cables laid by China could compromise regional security. Beijing has denied any intent to use commercial optic fibre cables, which have far greater data capacity than satellites, for spying.
Australia has ramped up its presence in the Pacific through the creation of a A$2 billion (US$1.5 billion) infrastructure financing facility and via its membership of the new “Quad” group, together with the United States, India and Japan, to counter China’s expanding interests in the Indo-Pacific.
Nauru, which has close ties to U.S. ally Australia, helped defeat a World Bank-led cable tender earlier this year over fears the contract could be awarded to the former Huawei Marine, now called HMN Tech, after the Chinese company submitted an offer priced more than 20% below its competitors.
The tiny Pacific nation of just over 12,000 has now approached the Asian Development Bank to help fund an alternative, the development agency said.
“The AfDB is involved in very early discussions with the government of Nauru to explore possible options to help finance an undersea cable to provide low cost and high quality internet service,” the AfDB said in a statement.
“The details of the connection arrangement and funding sources will be determined in due course.
Nauru’s plan needs Australia and the Solomons to be on board, the sources said. It is unclear if Nauru has requested financial assistance from Australia or whether it only needs Canberra’s permission to join the Coral Sea Cable system.
The governments of Nauru, Australia and the Solomons did not respond to requests for comment. The World Bank said it was not involved in discussions around cables connecting with Nauru.
Nauru was the first to raise concerns over a bid lodged by China’s HMN Tech during the World Bank tender process last year to build subsea cables for Nauru, Federated States of Micronesia and Kiribati, sources told Reuters in December. The United States followed up by warning the Pacific Island nations that the HMN Tech bid posed a regional security threat.
The project then unravelled after the island governments heeded the US warnings and declined to award a contract.
“The Chinese government has always encouraged Chinese enterprises to carry out investment cooperation in various fields in accordance with market principles and international rules and on the basis of abiding by local laws,” said Zhao Lijian, a spokesman at the Chinese foreign ministry.
“Chinese enterprises have always maintained a good record in network security, and the so-called Chinese espionage activities are groundless,” Zhao told a regular press conference on Thursday, when asked about the undersea cable plan.
