The Chinese Ambassador to the Maldives Zhang Lizhong and Speaker of the Parliament Mohamed Nasheed have been making back-and-forth exchanges on social media platform Twitter over Nasheed's recent comments at annual conference of India's Think Tank, where Nasheed had stated that India's GMR Company had submitted a quotation to build the Male'- Hulhumale' bridge for US$ 77 million.
Speaking at the conference, Nasheed had stated the previous government assigned the project to China's CCCC company instead of GMR, due to which the Maldives is now in debt for US$ 300 million. He further 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, Nasheed proposed to allocate 15% of the National Budget for paying back the loans owed to China effective from next year.
Nasheed had also noted 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, 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.
Further responding to the ambassador, Nasheed stated that sovereign guarantees issued by the government should be counted when calculating debt. In a tweet posted on Saturday, the former president said the total foreign debt of Maldives includes the active sovereign guaranteed debt, in addition to government to government debt. Nasheed also noted that the sovereign guarantees issued to Chinese banks are at alarming level, and warned that the fact should be kept in mind for the future.
In response to Nasheed's latest tweet, Ambassador to the Maldives Zhang Lizhong urged to refrain from spreading misleading information that could hinder the relationship between China and Maldives.
'Thank you, Mr. Speaker Mohamed Nasheed. What I cannot accept is continuous unverified and misleading information to the public, which harms our friendly relations. It is vital to have rational dialogue based on correct data. and it is a phone call away to get full picture for any doubt', wrote the ambassador.
The Ambassador also highlighted the importance of debt sustainability to China, and noted that China does not wish to see any partners in debt due to their borrowings from China. He also said all projects or financing cooperations are based on full consultation, due risk assessments and investment feasibility studies.