Pipe dream

The Pacific Fibre internet cable project failed because no-one of any size in this country could be arsed making a long-term investment and because the Americans don't trust the Chinese. Multiple dimensions of pathetic.

Interest.co.nz:
In August 2011, the NZ Herald reported Groser had introduced Pacific Fibre to a large Chinese investor, "talking serious money." Pacific Fibre CEO Mark Rushworth said at the time that discussions with Chinese equity investors had been "very successful."

However, following those talks, as Pacific Fibre kept US authorities informed about the potential stake holders, it was made clear "we couldn’t have had significant Chinese funding on the project,” Drury said.

Pacific Fibre always knew there would be issues if it secured a Chinese company to build the cable, hence it was happy to have secured TE Subcom, which had offered it the best deal, Drury said.

“That had been our first big thing. It had been made very clear from those who look at national infrastructure that there would be potential issues if it was a Chinese vendor connecting to the US," he said.

But as it became clear local investors would not back the project, and as sticking points rose with Australian super funds and other sovereign wealth funds, it became clear China was where the money was.

"And they love investing in infrastructure, especially strategic infrastructure like this," Drury said.
“Then as we just tested that with some of the US connections, it was made clear that that may be a problem," he said.

The sticking point with US authorities was that having Chinese investors in the project meant they would likely require the use of Chinese equipment for use in the cable: “Potentially that was the next issue," Drury said.

 The NZ Super Fund has bought into forestry and petrol stations domestically and must have been approached about this project. What a pity they couldn't pony up for it.

The NZ government haven't really helped things when they have many tools - like the mega millions in UFB roll-out subsidies they are chucking at the wider Telecom empire - that could be used to support the venture. When the government sits on its hands in this matter it is acting to maintain the Telecom monopoly and thus maintain the premium of price consumers are forced to pay and the overall disservice of Telecom.

Considering the inordinate haste at which they are willing to sell off the first of the power companies (giving the Waitangi Tribunal only three weeks to report in full so a sale can be done this calendar year) this government are conducting themselves like crack-fuelled gangsters on a rampage - regulating their chums' looting under the guise of "investment". The sum total of these Tory policies will be a large (and fiscally unjustified considering the low interest rates payable on NZ sovereign debt in this period) transfer of both wealth and power to an established elite within the country and foreign interests which will be difficult to unwind by future governments. And please note at this point that any notion that efficiencies, improved services or price reductions will result from these radical changes is not even raised anymore - they have conceded those reasons were marginal to bogus from the start of their programme.