The current administration has taken out two loans totalling SAR 562.5 million (approximately US$150 million), earmarked for the development of health services and the airport, it was disclosed at the Parliament Finance Committee meeting on Tuesday.
A SAR 187.5 million loan, via the Saudi Fund for Development, will go towards health sector development, it was revealed. The interest rate on the loan is 2.5 percent, with total interest expected to come in at MVR 41.8 million — and MVR 232.6 million towards loan servicing. The grace period for the loan is five years, with the deadline for repayment set for 2044.
The loan will ensure higher safety standards in health services and develop service infrastructure by funding the development of three 50-bed hospitals on islands across the country, a paper shared by the Ministry of Finance with the Parliament’s Finance Committee confirmed.
While the remaining SAR 375 million, also from the Saudi Fund, will be allocated for the development of Velana International Airport (VIA), interest rates, and other details, were not disclosed in the paper.
Discussions regarding the loans within the Finance Committee grew heated with Member of Parliament for South Hulhumalé, Ahmed Shamheed, an opposition MP, declaring that the paper should include information on the impact of borrowings on the state finances — the MP also expressed frustration that the Finance Committee cannot stop the administration from borrowing under current law.
“These papers are like a submission from a child attending grade one. There is no technical information,” Shamheed said.
The Committee Chair, prominent businessman and administration-aligned MP for Maamigili, Qasim Ibrahim, rejected Shamheed’s remarks, saying the paper sent by the Ministry contained the requisite information — Shamheed reiterated that information was insufficient.
“There has to be information, not only the benefits of taking a loan and the other [impact] on the country at low interest rates, but also the other costs, the burden on the state finances when the administration enters into a loan,” Shamheed said.
Shamheed went on to express specific concern over the administration’s additional loan for the development of VIA, citing a Maldives Airports Company (MACL) statement that an additional US$240 million is needed to complete the airport terminal.
“This means that the previously estimated amount is halved and one half is suddenly needed for the project to develop the airport terminal. Therefore, there is no [proper] information about the loan,” the MP said.
Committee Chair Ibrahim advised the committee to summon the former finance minister, as well as former and current MACL officials, should they feel further scrutiny was warranted. However, administration-aligned MPs surmised that summoning the former finance minister would be a waste of time and asserted that the two loans taken by the administration were above board.
Also responding to Shamheed’s remarks, the administration-aligned MP for Central Hithadhoo, Ahmed Azaan Marzooq said the paper presented by the Ministry contained all the relevant information and that the specific information highlighted by Shamheed should not be included in the paper sent to the Committee. If he needs the information, he should request it personally, Marzooq said.
Supporting Marzooq’s position, the MP for Baarashu, Ibrahim Sujau, accused Shamheed of trying to gain political advantage by bringing focus to borrowings. Sujau suggested that Shamheed was trying to mislead the public by repeating that the paper sent by the Ministry did not contain enough information.
However, Shamheed again reiterated the point when he spoke later.
It is unclear how Tuesday’s committee meeting ended, however, as the live proceedings of the Committee was interrupted before debates concluded.
The administration has taken on these two additional loans amid rumours that the nation’s economic standing continues to deteriorate.
The Deputy Speaker of Parliament, Ahmed Nazim, had, during earlier sessions of the Finance Committee of the 20th sessions of Parliament, raised concerns over the nation’s economy, further adding to rumours of instability.
