China to fund Malé-Hulhulé bridge, says minister

An agreement was penned today during President Abdulla Yameen’s visit to China for carrying out the ongoing feasibility survey of the Malé-Hulhulé bridge project with Chinese grant aid.

The “agreement on the economic and technical cooperation of grant” was signed after a meeting between President Yameen and Chinese vice president Li Yuanchao, according to the president’s office.

Speaking to reporters prior to departing to China last night, president’s office minister Mohamed Hussain Shareef said “a large portion” of the bridge project will be financed through Chinese free aid and the rest through concessional and commercial loans.

Along with the feasibility report, Shareef said the Chinese government will present options for building the bridge as well as the estimated cost for each option.

The government has previously said the project will cost between US$100 million and US$150 million.

China has previously said it would ‘favorably consider financing’ the bridge if the design proves feasible. The economic council has said the six-mile bridge will have six lanes and will span from Malé’s eastern edge to the western corner of Hulhule, where the airport is located.

Last month, a team of Chinese technicians began drilling bore holes on the ocean floor to gather information for the feasibility survey.

Shareef said last night that in his meeting with the Chinese vice president, President Yameen will discuss financing for the bridge project, projects in the Maldives under the Chinese maritime ‘Silk Route’ initiative and expediting a US$40 million loan from the Chinese EXIM bank for developing the international airport.

The government has previously said a total of US$600million is needed for the project. Although the economic council first said they will borrow the funds from China and Japan, the fisheries minister in March said Saudi Arabia had assured loan assistance at a low interest rate for airport development.

Shareef is accompanying President Yameen during his visit to China along with economic development minister Mohamed Saeed and representatives from Maldivian businesses. The president departed on Wednesday morning to attend the 3rd China-South Asia Exposition, and the 23rd Kunming Import and Export Commodities Fair.

The president is due to deliver a keynote address at the joint opening of the fairs. The fairs will take place from June 12-16.

According to state broadcaster Television Maldives, a symposium was held at the Grand Park Hotel in Kunming today to share information with Chinese investors.

More than 80 companies from the Yunnan province participated in the ‘Invest Maldives Symposium,’ said economic development minister Saeed.

An ‘Invest Maldives’ page was launched on Chinese social media network Weibo during the symposium as part of “promotional efforts” for an investment forum to be held in Beijing, Saeed said.

Businesses in the Yunnan province expressed interest in carrying out renewable energy projects in the Maldives, he added.

Shareef meanwhile said the Chinese government will cover almost all of the expenses for organising the investment forum in October. While sponsors funded the first investment forum held in Singapore last year, Shareef said the government covered some costs.

Following an official state visit to China in August last year, President Yameen said the likelihood of the bridge project being awarded to a Chinese company was “99 percent” and that “a large portion” of the project would be financed through free or concessional aid from China.

In a historic visit the following month, Chinese President Xi Jinpeng said he hoped the government would call the bridge “the China-Maldives friendship bridge”.


President predicts US$300 million compensation for GMR

The Maldivian government believes GMR is owed US$300 million in compensation for the premature termination of the contract to develop the Ibrahim Nasir International Airport (INIA) instead of the US$1.4 billion the company is seeking, President Abdulla Yameen Abdul Gayoom told reporters upon his return to Malé last night.

Speaking to press after returning from Singapore to attend the Maldives Investment Forum, President Yameen insisted that the arbitration proceedings over GMR’s compensation claim has not deterred investors.

The INIA development project was the most popular among attendees at the forum, he said.

“The biggest interest was for the airport,” Yameen said.

The event – which took place on April 25 – was attended by over over 160 companies and nearly 200 representatives from 16 countries, and was the first overseas investor forum organised by the Maldives.

GMR compensation claim

Speaking to the press at the airport, Yameen argued that the previous government was within its rights to terminate the contract as it “damaged state and national interests”.

But since GMR had carried out some of the development works at the airport, the government has to pay compensation, he conceded.

President Yameen said that the compensation payment would affect the state budget, but added that $300 million is a “manageable” sum.

The state-owned Maldives Airports Company Limited (MACL), which now manages the airport, is “saving up” that sum, he said.

This statement comes after GMR is reportedly sticking to the US$1.4 billion compensation claim for the abrupt termination by the Maldivian government in December 2012.

“The forceful takeover of the airport by Maldives government amounts to repudiation of a valid contract and therefore damages, including loss of future profit has to paid. Thus, GMR’s claim is $1.4 billion,” Indian media reported the Bangalore-based infrastructure giant as saying in a statement on Friday (April 25).

Investment forum

On the investor forum, President Yameen said companies were also interested in developing a trans-shipment port in the north of the country, along with economic stimulation investments in Hulhumale’.

The island is a reclamation project to the north of Male’ to cater for the housing, industrial and developmental demands of the capital.

“Alongside (interests for the airport), there was (interest) for the economic development of Hulhumale’,” President Yameen said.

“Some large Chinese companies brought us (proposals) to develop a township in Hulhumale’, in addition to different (development) components for the airport. God willing, if we can put the effort, there is a lot to be gained here,” he added.

Moreover, the Ministry of Transport is seeking investors for building four new domestic airports. They are to be established on Haa Alif Huvanadhoo, Alif Alif Mathiveri, Faafu Magoodhoo and Meemu Muli.

The government is proposing leasing one or two islands for 25 years for resort development to the investors under a public-private partnership (PPP) programme in addition to a customs duty exemption for all equipment and material imported for the airport projects.

Moreover, the government has also made an announcement seeking a developer to expand Hanimaadhoo International Airport in the north of the country.


Oil exploration attracts investors at Singapore investment forum

The Maldives has garnered interest in oil exploration during an investment forum in Singapore.

Minister of Fisheries and Agriculture, Dr. Mohamed Shainee, told Minivan News at least one investor will be visiting the Maldives in the coming weeks to present their company profile and discuss the project further.

Over 160 companies and nearly 200 representatives from 16 countries were present at the first overseas investor forum organised by the Maldives.

Speaking at the event on Friday, Shainee assured potential investors that there was no room to refute the presence of oil in the Maldives based on seismic testing by Royal Dutch Shell.

“Those studies were carried out 25 to 27 years ago, with limited technology capable of investigating under sea. However, now we have better technology that is more capable of more exploration,” he said.

Oil has been found in both Sri Lanka and India and therefore there is a high possibility that it will be found in Maldives too, he added.

Lying just a meter above sea level, the Maldives is among the world’s most vulnerable countries to climate change impacts such as sea level rise, ocean acidification and extreme weather events.

Crude oil will diversify and stabilise the economy, President Abdulla Yameen Abdul Gayoom has said. At present, the Maldives heavily relies on tourism, which supports an estimated 70 – 80 percent of its GDP.

However, some have argued that economic benefits will not outweigh the possible environmental repercussions.

“When you take up the issues of drilling, we are concerned about the oil container tanks with unrefined fuel passing through,” concluded Executive Director of local NGO Bluepeace Ali Rilwan. “We can’t afford to go into that dirty energy.”

With this in mind, Rilwan asked, “can we avoid a disaster in the Maldives? The Maldives is a tiny island and this can have a very negative impact, the tanks are a worrying thing.”

In addition to oil exploration, the government is seeking investment in establishing a port in northern Ihavandhippolhu Atoll, land reclamation and maritime seaport in Hulhumalé, expansion of the Ibrahim Nasir International Airport (INIA) and the relocation and expansion of the central port to Thilafushi Island.

The projects for which the government was seeking investors were “designed to position Maldives to take advantage of its strategic location as a hub and gateway for commerce, innovation and creativity, linking rest of the globe with South Asia,” President Yameen said in his keynote address.

“To address investment climate and to facilitate mega investments with attractive incentive packages, a Special Economic Zone Bill will be tabled in the parliament soon. Additionally, the Foreign Investment Act and Companies Act are being revised to cater the ever increasing needs of the modern foreign investors,” he added.

Meanwhile, a Singaporean court is currently overseeing the arbitration process between the Maldives government and Indian infrastructure giant GMR in which the company has claimed US$ 1.4 billion for the abrupt termination of a concession agreement to develop the Ibrahim Nasir International Airport (INIA).


Government to showcase five development projects at Singapore investment forum

The Ministry of Economic Development will be presenting five investment opportunities planned for the country’s development at the Maldives Investment Forum in Singapore this month.

The forum will aim to increase the interest of Asian-region investors, and will be the first forum of such a scale to be hosted by the Maldives in another country.

President Abdulla Yameen will also be attending the forum, which is scheduled for April 25 at the Marina Bay Sands hotel in Singapore.

“It is a showcasing of the largest infrastructure projects, for company registration, to the international investment community. The keynote will be by the president and we are working on the details for the showcase,” said Permanent Secretary for the Ministry of Economic Development Yusuf Riza.

“We have had forums of this sort before, but not at this level, not with the president there – this has been done at the ministerial level.”

Although Riza said the details of the projects were yet to be announced, local media outlet Haveeru has reported details of the developments to be presented to potential investors.

These are reported to be: the development of Ihavandhippolhu as an economic zone, a project to develop ‘I-Heaven’ and Ibrahim Nasir International Airport (INIA), the second phase of Hulhumalé’s development, a project to develop the current commercial harbour at Thilafushi, and a scheme to extract fuel and gas from the Maldivian region.