Sydney, Australia: Concerns over China’s participation have hampered the conclusion of contracts to lay submarine communications cables for Pacific island nations.

The project, entitled “East Micronesia Cable System,” was to improve communications in the island nations of Nauru, Kiribati, and the Federated States of Micronesia by providing much larger data capacities than satellites.

Huawei of China has submitted a bid to lay cables on a $ 72.6 million project with Alcatel Submarine Networks (ASN), which is part of Nokia in Finland, and more than 20% below NEC in Japan.

However, sources told Reuters that the contract was not issued due to the island government’s concerns about security in the event of Chinese involvement. In addition, planned connections to sensitive cables leading to Guam, the territory of the United States, where large military installations are located, have increased security concerns.

“All three bids were considered non-compliant because there was no specific way to remove Huawei as one of the bidders,” a source told Reuters.

The World Bank, which was helping fund the project, said in a statement to Reuters that it was working with the island’s government to decide how to proceed.

“The process ended without a successful bid because we were unable to meet the requirements of the bidding documents,” the World Bank said.

Meanwhile, the Chinese Ministry of Foreign Affairs has issued a statement to Reuters arguing that all parties should guarantee a non-discriminatory business environment in which all countries, including China, can participate.

“The Chinese government has always encouraged Chinese companies to engage in foreign investment and cooperation in accordance with market principles, international regulations and local law,” said a spokesman.

In last year’s bidding process, Washington elaborated on concerns, noting that Chinese companies needed to work with Beijing’s intelligence and security services.

U.S. lawmakers also warned that the Chinese government would subsidize businesses and undermine bids such as those run by development agencies.

Among other tasks, the submarine cable was designed to connect to the HANTRU-1 submarine cable, which is the main line used by the US government to connect to Guam.

Washington has urged governments around the world to end the purchase of telecommunications equipment from Huawei Technologies of China. Americans warned that Huawei is providing data to the Chinese government for espionage.