Indian Exim Bank to loan funds for Gulhifalhu Port development

Maldives government has revealed that an expenditure of US$ 300 million will be incurred to develop the Gulhifalhu port, and that the funds will be arranged via the Indian Exim Bank in the form of a loan.

During a press conference held Tuesday by the Economic Ministry to brief the media on Foreign Direct Investment (FDI), Economic Minister Fayyaz Ismail in an answer to a question revealed that the surveys and research necessary to develop the Gulhifalhu port are currently underway. The practical work of the project will be implemented during the final quarter of the year, said the minister.

"The design work is currently ongoing. The project is funded by Indian Exim Bank. The project report needed [to arrange funding] will be issued before the end of the month. We hope to hand over the work to the contractor mid-year," said the minister.

While it is estimated that US$ 300 million will be incurred for the development of the port, the port will be a state-of-the-art structure, said the minister. The funding being arranged for the project is specifically allocated for the port project only, said the minister.

"This port will become a competitive port in the region. While we hope for the port to be completed along with the bridge [connecting the Greater Male' area], we hope to relocate all warehouses and godowns as well. This will bring down the cost of goods, and open up opportunities for transhipment," said Fayyaz.

The previous government had plans to relocate the commercial harbour to industrial island Thilafushi instead of Gulhifalhu. Speaking on the current government's decision to change the location, the minister said the decision was made after taking into consideration the waste disposal issues faced by capital Male' and options that would allow for the port to be expanded in the future.

"The decision was made following discussion with the Cabinet. Thilafushi is already an industrial island. We contemplated waste-disposal issues that the region may face in the next hundred years before reaching the decision," said Fayyaz.

The minister further revealed that the former administration had prepared several 'preliminary reports' on the development of the harbour.

"[The former administration] signed MOUs with two Chinese parties to leave the investment to them. Even advancement payments were taken [following the signing]. The payments have since been returned to the parties," said Fayyaz.

The minister said the port will be operated by Maldives Ports Limited (MPL).

"We do not intend to hand over the operation of the port to any other parties. However, we will hire foreign experts as management consultants, as the port is not targeted just for Maldives. We want to make full use of the route Maldives lies on," said the minister.

Land reclamation work to construct the industrial harbour in Gulhifalhu was awarded to a Dutch Company, Royal Boskalis Westminster for USD$ 53 million last year. The project was not opened for bidding. Under this agreement, 16 million cubic meters of land will be reclaimed and 4 km sea wall will be constructed within 180 days. Boskalis has previously carried out land reclamation projects in the Maldives. Between 2007 and 2015, the company reclaimed 198 hectares of land in 10 islands across Maldives.

The government awarded the consultancy contract to establish an international commercial port in Gulhifalhu to a Joint Venture (JV) between Holland's Niras Company and Denmark's Maritime Transport Business Solutions (MTBS) for US$ 1.6 million. Local companies Water Solutions, Clear Reign Maldives and Beach Rock Venture will be taking part in the project as sub consultants.