Committee decides to grant permission to take$154 million loan for housing project

The Parliament Public Accounts Committee has decidedto send to the parliament, the issue of granting permission tothe government to obtain a loan of 982,500,000 Yuan ($154.3 million or MVR2.4 billion) from China’s Exim Bank, for the construction of 1,500 housing units in Hulhumale’ and four southern atolls.

The issue of taking this loan was submitted to parliament during former President Mohamed Nasheed’s government. However due to the lack of loan details and after committee investigations revealed that some information had changed, the committee decided to further probe the matter.

When the budget for this year was passed, the details of the loans approved by the parliament on 29 December 2011 stated that the 1,500 housing units were to be built in the southern atolls of Addu City, Fuvahmulah, Gdh. and Ga. atolls.

However, Finance Ministry notified the committee that 704 out of the 1,500 units to be built by obtaining the loan,should be built in Hulhumale’. This was agreed to by the committee.

The committee sent the issue of permission for taking the housing project loan to the parliament floor yesterday. The issue has not been put on the parliament agenda yet.

The loan taken from Exim Bank must be repaid in 20 years. After the loan is fully disbursed, the government will have to pay 17.74 million Yuan ($2.3 million or MVR35.5 million) yearly as interest during the grace period. By the end of the loan period which is in 2033, the government should have paid $183.14 million (MVR2.8 billion).

The islands in which the housing units will be constructed are Addu City’s Hithadhoo and Hulhumeedhoo, Fuvahmulah, Ga. Villingili, Gdh. Gadhdhoo, Gdh. Thinadhoo, Gdh. Hoadedhdhoo and Gdh. Madaveli.

The government will be given permission to obtain the loan if the parliament majority votes in favour of the report sent by the committee.