(Image: AAP/Dan Himbrechts)

The Solomon Islands government confirmed yesterday that it had signed, sealed, and would now deliver on a contract with Chinese tech giant Huawei to build 161 telecom towers in the country, courtesy of a $96 million 20-year concessional loan from the Exim Bank of China.

The view from many people in the Solomon Islands is that the numbers don’t add up. The view from the region is that the infrastructure may pose a security risk.

“The biggest issue is if it’s sustainable for us as a country. Whether we get it from Australia or whoever, can we handle it?” Solomon Islands journalist Dorothy Wickham told Crikey. “People are more worried about affordability, not so much the geopolitics of it.”

In a statement, the Solomon Islands government said the project was approved by an independent review that showed it would generate enough revenue to fully repay both the principal loan amount and interest costs.

Crikey has obtained a copy of the KPMG report submitted in April. In short, it says nothing of the sort, finding Huawei’s proposed $40 million profit was more to the tune of a $140 million loss. 

Pacific digital expert from the ANU’s department of Pacific affairs Amanda Watson said big question marks remained over how exactly the Solomon Islands government landed on Huawei.

“Did the Solomons put out a public request through which any company could put forward a proposal, or did Huawei approach the government with the idea?” she said. “If this is an idea that has come from Huawei, then I have some concerns.”

Many locals are concerned about being kept in the dark about the deal. “If there was consultation going on, the public was not aware of it,” Honiara-based Solomon Islander Emmanuelle Mangalle said. “The whole switch to China was done without public consultation. That’s the reason people fear it.”

Director of the Institute of National Affairs Paul Barker said this was a perspective shared by many countries in the region; there was a severe lack of transparency in contracting deals with China.

Last month the Philippines government cancelled a number of Chinese loans taken out under the previous administration for big-ticket Chinese infrastructure projects because of lack of clarity around cost burdens, the imposition on state-owned enterprises, and concerns about data collection in what Barker described as “quite clearly a China cloud”.

Huawei equipment in the Pacific is neither “new” nor “secret”. Handsets, modems and mobile phone towers are everywhere, but legitimate security concerns remain about how both China and Prime Minister Manasseh Sogavare plan to use the Chinese technology.

Earlier this month, the Solomon Islands government ordered the national broadcaster SIBC to self-censor news and publish only Sogavare-friendly content. It followed a move last month to strip SIBC of its status as a state-owned enterprise. The government argued it was paramount to protect the public against “lies and misinformation”.

From his position in PNG, Barker said he’s seen many Solomon Islanders expressing concerns about the government’s rapid shift to realign the country with a more authoritarian system of governance: “Where that coincides with greater linkages to Chinese institutions, security concerns are exacerbated.”

The Solomon Islands government has pledged to complete almost half the 161 towers in time for next November’s 2023 Honiara-held Pacific Games.

For many, this will be enough to offset the secrecy of the deal.

“Right now, nobody in the Solomon Islands sees what the Western world is seeing. But beggars can’t be choosers,” Wickham said. “It’s going to come with strings somewhere. We’d be naïve to think it won’t. They’ll show themselves somewhere down the line. Here we never see problems until they happen.”