Finance Minister Ibrahim Ameer has revealed that the contract awarded to implement the government housing project 'Hiyaa' at Hulhumale' Phase II was overpriced.
Speaking at the Parliament on Tuesday, Minister Ameer stated that the previous government awarded the contract for the housing project for unreasonable prices.
The previous administration of President Abdulla Yameen Abdul Gayyoom awarded the construction of 6,860 flats under the 'Hiyaa' project to China State Construction Engineering Cooperation in 2017. The Housing Development Cooperation (HDC) at the time revealed that the company was charging US$ 62,000 per unit, bringing the total to US$ 434 million.
However, HDC this June revealed that an additional expense of US$ 42 million is expected to be incurred to complete the project as the cost per unit did not include finishing works of the units such as tiling and painting. With the inclusion of the costs incurred to finance the project, and the cost of managing the land and the project, the total project cost is estimated to reach US$ 560 million, said HDC.
When questioned regarding the project at the Parliament, Minister Ameer said that he believed the Hiyaa project to be an overpriced project.
"When we began administration, the project was nearing completion. We believe this project was awarded at an inflated price", he said.
However, no official discussions have been held on revising the price, said Ameer.
Former president and Speaker of Parliament Mohamed Nasheed has on multiple occasions accused that the former administration of awarding several development projects to Chinese companies for inflated prices. Nasheed has noted the need to lower the debt owed to China to a realistic amount.
During his tenure, former President Yameen borrowed a large amount in loans from China, which has incurred a mounting debt of over US$ 1.5 billion to China alone. President Ibrahim Mohamed Solih has remarked that these loans were taken at high interest rates, and on terms that were damaging to the archipelago.
Due to the extra expenditure incurred, Hiyaa flats will be rented at a rate of MVR 11,000 per unit. However, President Solih has previously stated that the government is working to lower the amount to MVR 6,000 through provision of government subsidies.