Chinese Government provides grant — via Trust Fund — for dredging works on Ba, Nawaka and Nadi Rivers (Linked to #67034)

In 2007, Ministry of Finance gave approval to the Prime Minister’s Office to open a bank account for Chinese Government grants, which was later referred to as the Chinese Grant Trust Fund Account (see Umbrella Project #67034). From 2010 to 2014, major dredging works, which cost over $29.7 million, were carried out in four major rivers including Rewa, Navua, Nadi and Ba. The dredging of the rivers was to reduce damages caused through flooding. According to the Auditor General of the Republic of Fiji, dredging works were undertaken on the Ba, Nawaka and Nadi River and funded with the proceeds of a grant from the Chinese Government (the ‘Chinese Grant Trust Fund’) entrusted to Fiji’s Office of the Prime Minister. Fiji’s Office of the Prime Minster retained ten percent of the funding necessary for payments to contractors (China Railway First Group Fiji Limited, Hall Contracting) to undertake these dredging works in the Chinese Grant Trust Fund. The total amount of retention funding amounted to $937,872.89. The retention funds for Nawaka River Dredging amounted to $175,971; the retention funds for Ba River Dredging amounted to $330,431, and the retention funds for Nadi River Dredging amounts to $431,471. However, due to a ‘bookkeeping error’, payments were made from a sum of money allocated to the construction of a rural sports complex, which led the Auditor General of Fiji to raise concerns on the misuse of public funds. According to the Auditor General of the Republic of Fiji, the Office of Prime Minister did not have a retention bank account in 2012. Therefore, the retention funds for dredging works were receipted into the Chinese Grant Trust Fund. In 2014, a retention account was opened. Due to a misunderstanding that the retention funds that were deposited in the Chinese Grant Trust Fund in 2012 were utilized, money was taken from the rural sports complex allocation in 2014 and deposited into the newly opened retention account. There is considerable evidence that China Railway First Group Fiji Limited conducted river dredging activities after these funds were disbursed. However, precise project implementation start and end dates are unknown.

Additional details

According to Fijian law, any monies that are deposited into government-controlled Trust Funds are not the property of the state and not utilized for the purpose of government. As such, these monies are to be deposited in separate bank accounts and accounted for separately from public money and other money (since they are being ‘held in trust’). Fiji’s Office of the Prime Minister operates one Trust Fund that is financed by the PRC Government and another that is financed by the Taiwanese (ROC) Government. The PRC Government established the Trust Fund (and deposited $5 million into it) roughly 6 months after the December 2006 military coup in Fiji (see Project ID#67034). The PRC, in effect, entrusted these funds to the coup leader (Frank Bainimarama), who became Fiji’s Prime Minister.

Number of official sources

4

Number of total sources

10