Finance Minister Dr. Mohamed Shafeeq has clarified the government’s stance on infrastructure development projects, addressing concerns raised by the opposition and official statistics regarding Public Sector Infrastructure Program (PSIP) spending.
Minister Shafeeq emphasized that the government’s decision to halt spending on certain infrastructure projects was a strategic move to prioritize budgeted initiatives. While allegations of stalled development have surfaced, Shafeeq maintained that projects without adequate funding were the ones affected.
Explaining further, Shafeeq cited examples such as land reclamation projects, which had an initial allocation of approximately MVR 5 million. However, the estimated total cost to execute these projects far exceeded the allocated amount, making them financially unfeasible.
Budget Breakdown
The Finance Ministry’s budget book reveals that MVR 8.6 billion has been earmarked for a total of 1,780 PSIP projects. Among these, the majority are ongoing and contracted endeavours, while 331 new projects are in the planning stage. The breakdown of planned expenditure includes:
- State Budget: MVR 3.2 billion
- External Borrowings: MVR 4.6 billion
- Grants: MVR 389.5 million
- Trust Fund: MVR 380.9 million
Despite the budgeted amount of MVR 9 billion, Minister Shafeeq acknowledged that the actual cost of executing these projects could reach MVR 12 billion. The government remains committed to ensuring that ongoing projects continue smoothly, backed by secured funding and cash flow. Simultaneously, projects yet to commence will not proceed until sufficient funding is available, preventing wastage.
Minister Shafeeq assured the public that no projects had been cancelled outright. Instead, the focus lies on prudent financial management. As the year progresses, additional projects are slated to begin. The government’s expenditure during the initial months of this year was tempered due to the suspension of certain PSIP projects.
The government’s measured approach aims to strike a balance between fiscal responsibility and developmental progress, ensuring that Maldives continues its journey toward sustainable growth.
