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Maldives gives sovereign guarantee of USD 328 mln to Turkish firm

Fathmath Shaahunaz
23 November 2016, MVT 15:44
Housing units in Hulhumale. FILE PHOTO: MOHAMED YAMEEN/MIHAARU
Fathmath Shaahunaz
23 November 2016, MVT 15:44

The Maldives government on Wednesday gave a sovereign guarantee of USD 328 million to a Turkish firm which has proposed to develop 5,000 housing units in the reclaimed suburb of Hulhumale.

The Ministry of Finance and Treasury submitted the documents on the sovereign guarantee to the parliamentary finance committee early Wednesday. The committee’s chair Ahmed Nihan stated that the guarantee was granted to Ozturk Holding of Turkey for the development of 5,000 housing units in Hulhumale, though he did not disclose the guaranteed amount during the meeting.

In response to an inquiry by Mihaaru after the committee meeting, Nihan revealed that the sovereign guarantee amounts to USD 252.5 million.

However, Mihaaru understands that the sovereign guarantee totals USD 328 million when the interest of the loan taken by Ozturk and other expenses are taken into account.

The members of the finance committee did not discuss the sovereign guarantee at great lengths during the meeting despite its hefty amount. Member of main opposition Maldivian Democratic Party (MDP) and Maradhoo MP Ibrahim Shareef stated that the MDP has never opposed the provision of housing and shelter.

As the current Public Finance Act does not mandate sovereign guarantees to approved by the parliament beforehand, the finance ministry had forwarded the documents on the Ozturk Holding guarantee as a courtesy for the committee’s information.

Details have not been disclosed as of yet regarding the housing project being awarded to Ozturk Holding. While the project that commenced last April to develop 15,000 housing units in Hulhumale include units constructed by a Turkish company, it remains unclear whether the firm is Ozturk Holding or not.

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