The Leader of the Opposition, Hon. Matthew Wale, has expressed strong objections to the manner in which ADB and the government are managing the upgrade of the old Honiara international wharf in Honiara.
Originally agreed at SBD 240 million, the project cost has now skyrocketed to approximately SBD 700 million, despite being seven years overdue with no construction yet underway.
The funding arrangement splits costs equally, with ADB covering 50% and the Solomon Islands Ports Authority funding the remaining 50%.
“There is absolutely no justification for this budget blowout. The government must immediately terminate the funding agreement with ADB and allow the Solomon Islands Ports Authority to take full control of the project,” Hon. Wale said.
The Leader of the Opposition highlighted that the Ports Authority has already demonstrated its technical engineering capability through the successful completion of the Noro Wharf upgrade at a fraction of the cost of hiring overseas contractors.
Furthermore, Hon. Wale said the Ports Authority has the financial capacity to fund the entire project without requiring government borrowing.
“The budget blowout means that the 50% to be funded by Ports Authority will also increase, and it will almost certainly wipe out most of the cash reserves of the Authority built up over so many years. This cannot be justified,” Hon. Wale emphasized.
Hon. Wale further criticized ADB’s recent track record in the Solomon Islands, pointing to its coercion of Solomon Water into selecting the lowest bidder for the Kongulai Water Treatment Project, which resulted in the contract going to an unreliable service provider.
“It appears ADB is repeating the same disastrous approach with the Honiara Wharf upgrade,” Hon. Wale stated.
The Leader of the Opposition urged the Solomon Islands government to be more discerning in these matters, warning that the government’s tendency to sign onto project funding agreements without due diligence leads to excessive and unjustifiable costs.
Hon. Wale said he suspects international companies exploit Solomon Islands government’s incompetence in negotiations that result in cost blow outs that are simply unjustifiable. And it seems the International Financial Institutions involved in funding the projects are only too willing to oblige.
“The problem is that Solomon Islands ends up with unjustifiable increased excessive borrowing. The young people of Solomon Islands will end up having to pay for the bad decision making of the government. Take Tina Hydro project as an example, a 15MW hydro project that should only cost less than UD50m is now going to cost more than USD400m” Wale said.
Hon. Wale said our government’s incompetence, and the complicity of funding agencies are conspiring to pile up unnecessary borrowing on Solomon Islands must stop.
Hon. Wale urged Government to immediately terminate its agreement with ADB and to allow SIPA to proceed with the project independently.
“Let us do this project ourselves by allowing Ports Authority to get it done. We will be proud when we have shown we have done it ourselves” Hon. Wale concluded.
– Opposition Press
