The Pacific island nation of Nauru is in talks to build an undersea communications cable that would connect to a network in Australia, two people familiar with the matter told Reuters. The move comes after a Chinese proposal was rejected.
The U.S. and its Pacific allies are concerned that a cable laid by China could jeopardize regional security. The Chinese government denies any intention to use the commercial fiber optic cable for espionage purposes. Commercial fiber optic cables have much greater data capacity than satellites.
Nauru, which has close ties to U.S. ally Australia, helped block a World Bank-led cable tender earlier this year over concerns that the contract would be awarded to Huawei Ocean Networks Co. The Chinese company made an offer that was more than 20 percent lower than its competitors.
The Asian Development Bank (ADB) told Reuters that Nauru has now sought financial support from the ADB. The small Pacific nation has a population of only 12,000.
ADB said in a statement sent to Reuters:ADB is in very early discussions with the Government of Nauru to examine possible options for funding the laying of a submarine cable that would provide low-cost, high-quality Internet services.”
“Details of the arrangements for the network connection and the source of funding will be determined in due course.”
The new plan would include laying a cable from Nauru to Honiara, the capital of the Solomon Islands, some 1,250 kilometers (776.7 miles) apart, the two sources said.
The new line will connect to the Coral Sea Cable System, a 4,700-kilometer-long network linking Australia with the Solomon Islands and Papua New Guinea. The line, largely funded by Australia and built by Sydney-based Vocus Group, was completed in 2019 to rule out a competing offer from Huawei Marine, then owned by Huawei.
Nauru’s plan requires support from Australia and the Solomon Islands, the sources said. It is unclear if Nauru has requested financial assistance from Australia or if it just needs permission from Canberra to join the Coral Sea cable system.
A source with direct knowledge of the planned cable route described the talks as “early talks.
A second source provided information about discussions between Nauru officials and the Asian Development Bank, Australia and the Solomon Islands. The source said Nauru is in the process of “making a deal.
The governments of Nauru, Australia and the Solomon Islands did not respond to requests for comment. The World Bank said it was not involved in discussions about a cable to connect with Nauru.
Sources told Reuters last December that Nauru was the first country to raise concerns about a bid from China’s Huahai Communications Technology Inc. during a World Bank bidding process last year to build submarine cables for Nauru, the Federated States of Micronesia and Kiribati. The U.S. subsequently warned the Pacific island nations that Huahai’s bid posed a regional security threat.
After the island governments heeded the U.S. warning and declined to award the contract, the project was put on hold.
Asked about the submarine cable plan at a regular news conference on Thursday (June 24), Chinese Foreign Ministry spokesman Zhao Lijian said, “Chinese companies have always maintained a good record in cybersecurity, and the so-called Chinese espionage is baseless and unfounded, and is entirely the wrong target.”
Australia has strengthened its presence in the Pacific by establishing a $2 billion ($1.5 billion) infrastructure financing facility and by joining a “quadrilateral” with the United States, India and Japan to counter China’s expanding interests in the Indo-Pacific region.
Australia is also part of a trilateral partnership with the United States and Japan to fund a submarine fiber optic cable in Palau, another Pacific country.