By Kirsty Needham
SYDNEY (Reuters) -Fiji Prime Minister Sitiveni Rabuka told parliament on Wednesday the Pacific Islands nation was likely to collaborate with China on a key port modernisation and shipyard project, after discussing it in a meeting with Chinese president Xi Jinping.
Fiji previously sought Australia's involvement to build a modern ship-building facility at Lautoka, officials and a consultant to Rabuka on the project told Reuters.
China is the world's largest shipbuilder, accounting for half of all ships built this year. The pace of expansion of its navy has concerned Australia, which has donated dozens of patrol boats to its Pacific Islands neighbours to boost surveillance of their territorial waters.
Rabuka told Fiji's parliament on Wednesday his government was focused on upgrading infrastructure, "particularly the modernisation of port facilities and shipyards".
"I anticipate potential collaboration with China in that endeavour, given China's globally competitive shipbuilding," he said.
Rabuka met Xi for the first time on the sidelines of the APEC forum in San Francisco last week. He said on Wednesday Fiji supports China's vision for global security, and that Beijing's Belt and Road Initiative "aligns with our nation's development agenda".
Discussions were underway to address Fiji's "debt crisis" responsibly, he added. Fiji has external debt equivalent to 56% of gross domestic product, most of which is owed to multilateral development banks. The amount also includes FJD$375 million ($167 million) of China EXIM bank loans taken out almost a decade ago.
An Australian-based ship design company said Rabuka had earlier sought the involvement of Australia, Fiji's largest aid donor, in the shipyard project.
Sea Transport chairman Stuart Ballantyne said his company had received a request from Fiji for a fleet of commercial ships it could assemble locally.
Ballantyne said he had advised Rabuka on the broad scope of the shipyard project, which would involve moving an "archaic" shipyard near Suva to the other side of the island, Lautoka, and constructing two undercover sheds.
Rabuka wants to revive shipbuilding as a training ground for tradespeople in Fiji, from carpenters to electricians, Ballantyne said, adding he was unaware of any Chinese involvement.
"If the Chinese have stepped up to the plate - they are the aggressors in the Pacific, the movers and shakers," he said.
The Australian government has funded a feasibility study with Fiji Ports to explore redevelopment options at the Lautoka foreshore, including a barge landing and ship-building and maintenance facility.
Fiji Ports chief executive officer Vajira Piyasena told Reuters the government had called for expressions of interest from investors for a joint shipyard venture in September.
The government advertisement said the project would meet the government's shipbuilding requirements for five years, with a business model based on a joint venture with Fiji Ships and Heavy Industry, a subsidiary of Fiji Ports.
An official said only local proposals had been received, and the official was not aware of any contract being awarded.
Fiji Ports referred questions about China's involvement to Rabuka's office, which did not respond to requests for comment.
China's embassy in Fiji did not respond to a request for comment.
China has been pushing for greater security and trade ties with Pacific Islands countries. It has signed a security pact with Solomon Islands, raising alarm in the United States which responded by striking a defence deal with Papua New Guinea.
China's policy on the Pacific Island nations fully respects the sovereignty and independence of those countries without attaching political conditions or empty promises, Xi said after meeting Rabuka last week.
(Reporting by Kirsty Needham; Editing by Lincoln Feast and Edwina Gibbs)