China is building projects at inflated prices says Maldives
Maldives new finance minister said that China is building projects at inflated prices. China is executing infrastructure projects at vastly higher prices than originally proposed. But the island nation cannot get out of its commitments at this stage.
President Ibrahim Mohamed Solih’s administration took office this month. The administration is reviewing contracts awarded his predecessor Abdulla Yameen. Most went to Chinese firms and are feared to have left the country in debt.
During a five-year building spree, China built a sea bridge connecting the capital city of Male to the main airport on another island and is developing the airport itself as well as building mass housing on land reclaimed from the sea.
But finance minister Ibrahim Ameer told reporters that his officials had spent the first week in office trying to reconcile loans that the previous government took for these projects and the sovereign guarantees that it gave for them.
Ameer said, “We believe that most of these projects are at inflated prices, and so we are looking at them.”
But he also said that the government could not go back on the contracts because many of these, including the bridge, were already completed and still, China is building projects at inflated prices.
He added, “We cannot do much in terms of renegotiation but going forward our objective would be to reduce the cost of our infrastructure projects.”
One of the projects was a hospital in Male awarded to China which had already run up a cost $140 million, far more than a rival offer $54 million that was originally made.
China has built ports, bridges and highways in countries stretching from Bangladesh, Nepal, Sri Lanka, and its ally Pakistan as part of its Belt and Road Initiative for a trade and transit corridor across Asia and into Europe.
China is building projects at inflated prices and that is affecting India’s neighbouring countries.
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