Australia’s spy agencies were so concerned about the security and strategic risks posed by a plan for Chinese firm Huawei to build an internet cable linking the Solomon Islands to Sydney that the Turnbull government will now largely pay for the project itself.
The Department of Foreign Affairs has confirmed it has taken responsibility for the undersea fibreoptic cable, including paying for the bulk of the project – which will cost tens of millions of dollars – through the overseas aid program.
The cable will provide fast and reliable internet to the small Pacific island nation, which now relies on satellites.
The step is highly significant as it shows the lengths to which the Turnbull government was willing to go to ensure the cable project could go ahead without Huawei’s involvement.
The Solomon Islands under former prime minister Manasseh Sogavare signed up Huawei Marine to lay the cable connecting to Sydney. But Australia made it clear to Honiara that it had security concerns about the Chinese telco plugging into Australia’s internet backbone, with Nick Warner, the head of spy agency ASIS, personally warning Mr Sogavare last June.
Huawei has previously been banned on the advice of security agency ASIO from being involved in the National Broadband Network.
Mr Sogavare was replaced as prime minister in November by Rick Hou, a former senior World Bank adviser who is well respected in Australia. Mr Hou had been highly critical of the circumstances in which Huawei Marine was awarded the contract under his predecessor.
A spokeswoman for the Department of Foreign Affairs told Fairfax Media the government has entered a contract with the Australian telecommunications firm Vocus to carry out the initial work.
“They will undertake a scoping study and identify potential solutions to bring high-speed telecommunications to Solomon Islands,” she said.
“The bulk of the funding for this project will come from Australia’s Official Development Assistance program.”
She said the Solomons project would be consolidated with a project to lay a new cable connecting Papua New Guinea with Australia, creating “significant efficiencies on cost”. The cost of the Solomons project alone has previously been estimated at $86 million.
According to the federal government’s AusTender website, Vocus is being paid $2.8 million for the scoping study for both the Solomon Islands and PNG. The department spokeswoman said that this study would define the final cost.
Fairfax Media understands Australia was concerned about the security implications of Huawei being involved in connecting to Australia’s critical infrastructure, but also more broadly about a Chinese firm – even a private sector one – extending Chinese influence into the Pacific through the cable project.
The Solomons originally identified a British-American company to do the work and had secured backing from the Asian Development Bank. But the previous government abruptly switched to Huawei, prompting the ADB to pull out, saying that the “Huawei contract was developed outside of ADB procurement processes”.
A Huawei spokesman said: “We’ve been advised by the Solomon Islands Submarine Cable Company that Vocus has been contracted to undertake a scoping study but that’s all they have said to us.”
Jonathan Pryke, a Pacific islands expert at the Lowy Institute, applauded Australia’s move, saying that it made strategic and security sense while also providing much-needed development.
“There’s clearly a strategic objective to this project. It’s to make sure there’s no opportunity for third players like China or a Chinese company like Huawei to swoop in and provide a cable to PNG or the Solomons that could affect strategic interests and compromise Australia’s security.”
He said Chinese development would be welcome in the Pacific if it were more transparent and added there had been concerns in the Solomon Islands about the opaqueness of the Sogavare government’s deal with Huawei Marine.
The cable company’s CEO, Keir Preedy, was not available for comment. Mr Hou’s office did not respond to email requests for comment.