SIG approves participation in Coral Sea Cable System

The Cabinet of the Solomon Islands Government today approved the participation of Solomon Island Cable Company ltd (SISCC) in the proposed Coral Sea Cable System. The Coral Sea Cable System is to be majority grant funded by the Commonwealth of Australia through the Department of Foreign Affairs and Trade (DFAT) to provide an International submarine fibre optic cable system from Australia to both Honiara and Port Moresby. Whilst the Commonwealth of Australia is yet to confirm the landing point for this cable system in Australia, the Solomon Islands Government supports a Sydney landing as advocated by the Solomon islands Submarine Cable Company.

This CS2 international system will be owned and operated by SISCC ltd in Solomon Islands and Kumul Telikom Holdings (KTH) in PNG jointly with the Commonwealth of Australia through an Australian registered company. Full rights of use over two complete fibre pairs from the capital cities to Australia will be granted to each of SISCC and KTH for the 25 year life of the system.

The Australian offer is understood to include majority grant funding of a Solomon Islands Domestic Submarine cable network linking Taro, Noro and Auki with Honiara. This will be owned and operated by SISCC ltd.

Cabinet directed SISCC to enter into all required agreements on behalf of the Solomon Islands in order to execute on this project and bring wholesale internet services to operation over the new submarine fibre system. The total cost of the project through to commercial launch of services is $29.7M USD which SISCC will receive in equity funding from its shareholders, the Investment Corporation of the Solomon Islands (ICSI) and the Solomon Islands National Provident Fund (SINPF).

Cabinet directed that $122m SBD of bond funds raised in 2017 be transferred from the Central Bank account to SISCC for the ICSI contribution in order for SISCC to commence operations.

The next step is Australian Government approval of the project in early May 2018, followed by DFAT finalising the Engineering Procurement and Construction Head contract with Vocus communications in mid-May.

Vocus will then sub-contract a suitably qualified Submarine Cable System vendor to design, construct and install the cable system. Vocus have conducted a rigorous tender process and have a short list of vendors ready to sign a final contract with them. It is anticipated that the project will deliver a system ready for service by the end of 2019.

In late November 2017, Cabinet directed SISCC to evaluate and develop the proposal made by Commonwealth of Australia. SISCC have worked directly with our partners KTH, DFAT and Vocus since December 2017 to develop the offer and perform necessary due diligence on cost, performance and feasibility of the solution on behalf of the Solomon Islands. SISCC gave its strong recommendation to its sponsoring ministries of Finance and Treasury and Communications and Aviation following the conclusion of the scoping phase undertaken by DFAT and Vocus. Compared to previous alternative projects, the grant funded option provides a far stronger business case which will allow more aggressive wholesale pricing from system launch, which is a critical objective for SISCC in support of the economic growth potential afforded by submarine cable services.

Any further inquiries regarding the SISCC participation should be addressed to Keir Preedy, CEO of Solomon Submarine Cable at the address below.

Solomon Submarine Cable is a registered business name of Solomon Island Submarine Cable Company Limited (SISCC)