Until now, China has insisted that projects funded by its grants or loans were tendered to Chinese companies only.
But deputy prime minister Mark Brown has returned from a trip to Beijing, with a breakthrough deal.
He revealed to business and infrastructure leaders yesterday that they had agreed to change the way they do business with the Asian superpower around Official Development Assistance grants.
China is contributing almost a quarter of the $65 million the Cook Islands expects to receive in official aid for the 2019/20 financial year.
The Cooks had pushed their agenda that local companies be used to do the infrastructure projects, Brown said.
It had always been a little difficult to try and “impose our rules on somebody else’s money”, but they had been fairly successful in the last few years in changing the way their development partners worked with them.
“Just recently in China, in the discussions I had with companies like CCECC (China Civil Engineering Construction Corporation), we managed to change the way that they do business, because we stated again with them that we want local companies to do the work because it’s the local companies that will remain here when the work is completed.
“And when the building is 10 or 15 years old, they become a help in terms of maintenance and upgrade,” Brown said during the Budget Breakfast at The Islander Hotel yesterday.
“I’m happy to say in terms of the project funded by China, they agreed for local companies to build for those work funded through their funding which is just another step in the evolution and maturity of the Cook Islands as a country dealing with development partners particularly when we are reaching the stage now of graduation to be a developed country ourselves.
“So the way we do business moving forward is going to be little bit different from how we have been in the past without ODA partners.”
New Zealand, which contributes the largest chunk of the country’s official development assistance (39 per cent) was the first to enter an agreement with the Cook Islands government, allowing local companies to carry out construction work on projects they had funded here.
“The New Zealand-funded Tereora College upgrade was a good example. Through discussions with New Zealand, we were able to change the procurement process that New Zealand applies, to apply domestic companies to put in competitive tenders on an even playing field basis and that tender was won by a local company, Landholdings, who delivered a great project,” Brown said.
“This is a classic example of one of the major ODA projects funded by New Zealand that was granted to a local company, and we were able to demonstrate that we are able to domestically deliver as well.”