Environment Ministry seeks alternative funding to meet development aims

The Ministry of Environment and Energy will attempt to diversify how it finances infrastructure projects in order to compensate for a reduced budget during 2013.

State Minister for Environment and Energy Abdul Matheen Mohamed told Minivan News that reductions to government expenditure over the next 12 months would create “operational difficulties” in its ability to provide water and sewerage projects to a wider number of islands.

The claims were made as the Environment Ministry yesterday unveiled its work plan outlining developments for the next twelve months that will include water projects across 15 islands and sewerage developments on 47 islands.

Despite these commitments, Matheen stressed that the ministry’s development focus has been limited by parliament last month approving a budget of MVR 15.3 billion (US$992 million). The approved amount had been cut by over MVR 1 billion (US$65 million) from the budget originally presented by the Finance ministry to parliament as part of efforts to curb concerns over a budget deficit.

In order to try and make up for possible shortfalls in spending for development projects, Matheen said private sector collaborations were among initiatives sought by the Environment Ministry.

“Definitely we will be facing operational difficulties due to the budget cuts, so we are trying to diversify the financing sources for the development projects and apply the maximum flexibility in the procurement process,” he explained.

“In addition, we are aiming to increase the private sector participation and contractor financing for project implementation.”

Renewable focus

Along with water and sewerage projects, Matheen claimed that efforts were also under way by the ministry to secure MVR800 million (US$51.9 million) for development of the country’s energy sector.

A key focus of this development would be focused on renewable energy, reflecting ongoing commitments to try and become a carbon neutral nation by the end of the decade.

He added that donor funding and private sector finance was presently being sought as part of this green focus.

According to local media, the Environment Ministry yesterday unveiled that state funding would be supplied for water projects on five islands, as well as the introduction of sewerage systems to a further 32 islands.

Further projects on 13 other islands were reported to be funded through loans, while two sewerage systems would be implemented as part of Corporate Social Responsibility (CSR) initiatives.

According to the Sun Online news service, Environment Minister Dr Mariyam Shakeela claimed that MVR315 million (US$20) was to be spent from the state budget to fund environment ministry projects.

Dr Shakeela was reported as saying that an estimated MVR500 million (US$32 million) was needed to fund the total number of water and sewerage projects it had outlined for 2013.

“Due to the budget difficulties we are almost not able to pay salaries in some areas. But we are working through the projects we have in hand and other ways.  We are trying to find a solution by holding discussions with the Finance Ministry,” she was quoted as telling local media.

Concerns

Back in December 2012, State Minister Matheen claimed that there were “concerns” about the amount of funding allocated to the Environment Ministry in the proposed state budget.

Such concerns were addressed this month by Finance Minister Abdulla Jihad, who pledged to hold discussions with government departments, independent institutions and the Maldives judiciary to try and reorganise their respective spending allocated within the 2013 budget

Despite the efforts to reallocate monies within each ministry, Jihad has maintained that the present state budget was likely to be insufficient to cover costs over the next year. “We will have to submit a supplementary budget this year,” he contended.

The parliamentary committee that reviewed the state budget last month had originally recommended MVR2.4 billion (US$156 million) worth of cuts to state spending.

A number of the committee’s members claimed expenditure could be reduced largely by cutting “unnecessary recurrent expenditures” within the budget such as ministerial spending on foreign trips and office expenses without impacting services.

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