China amb, Nasheed again clash over Chinese debt

Chinese Ambassador to the Maldives, His Excellency Zhang Lizhong have responded to former president of the Maldives and current Speaker of the parliament Mohamed Nasheed over his comments regarding the debt owed to China.

Recently speaking at the annual conference of India's Think Tank, Nasheed said India's GMR Company had submitted a quotation to build the Male'-Hulhumale' bridge for US$ 77 million. However, the previous government assigned the project to China's CCCC company due to which the Maldives is now in debt for US$ 300 million, said Nasheed.

Nasheed emphasized the importance of paying back the debt, even if it meant bringing down state expenses, revealing that over US$ 3.4 billion is currently owed to different Chinese companies. In a bid to pay back the loan efficiently, 15% of the National Budget must be allocated for paying back the loans owed to China effective from next year, said Nasheed.

Noting that while it is not just the high interest rates incurred on the loan that the government has to pay back, the project cost was also high, said Nasheed, alleging that the company had sent bills for higher amounts. Therefore the current government is now working on paying back the cost as well as the interest, said Nasheed.

Responding to Nasheed, Ambassador Zhang said in a tweet on Saturday that the cost of the bridge project was US$ 200 million, out of which 57.5% was funded under Chinese grant aid.

In his tweet, he noted that the Maldivian government has to pay back US$ 100 million only, which is half of the project cost, spread over a 20 year period after completing a five year grace period.

The Ambassador also referred to central bank Maldives Monetary Authority's data, noting that while the foreign debt of Maldives is at US$ 3.21 billion, the total amount owed by Maldives to China is US$ 1.529 billion which include US$ 872 million in concessional loans and US$657 million in preferential loans up to November last year.

Ambassador Zhang further assured that the Chinese government fully respects and considers the needs of the Maldivian people, and stressed that no political conditions are attached in assisting the Maldives in fulfilling the needs of local development.