Pacific submarine cable project on hold, U.S. warns Chinese firms involved pose security threat

The World Bank-led project to lay a sensitive Pacific Ocean submarine communications cable is currently on hold after failing to select a contract contractor, Reuters revealed on Friday, citing multiple sources. The U.S. previously warned the Pacific island governments that the participation of Chinese companies would pose a security threat.

According to two sources with direct knowledge of the bid, the project has stalled because of security concerns raised within the Pacific island nations involved by the Chinese bid from Huahai Communications. The project is planned to connect a sensitive cable to Guam, a U.S. possession with a large number of military installations.

Sources said China’s Huahai Communication Technology Co. offered a bid that was more than 20 percent lower than bids from rivals such as Finland’s Nokia-owned Alcatel Submarine Networks, and Japan Electric. HuaHai Communications, formerly known as Huawei Ocean Networks Co.

It is reported that the up to $ 72.6 million East Micronesia cable project (East Micronesia Cable project) aims to improve communications in island countries such as Nauru, Kiribati and the Federated States of Micronesia by building submarine infrastructure with greater data capacity than satellites.

In a statement sent to Reuters, the World Bank said the process was closed and inconclusive because of unanswered requests in the bid documents.