Middle East Conflict Disrupts Island Infrastructure Projects, Says Finance Minister

Logistical disruptions stemming from conflicts in the Middle East have severely delayed major infrastructure projects across the Maldives, the Minister of Finance and Public Enterprises, Hassan Zareer, revealed during the Ahaa public forum last night.

Explaining the slowdowns, the Minister noted that global fuel price hikes and shipping bottlenecks have weighed heavily on the domestic economy, despite state revenues growing by 10 per cent in the first quarter of the year.

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The local impact of these international supply chain constraints was highlighted during the event when a forum participant raised direct concerns regarding stalled harbour expansions and machinery arrivals in Noonu Velidhoo. 

Citing reports that the hold-ups were tied to administrative delays and financing issues within the government, the resident pressed for concrete timelines on when these long-awaited community infrastructure developments would finally be resolved.

The inquiry centres on the MVR 47.21 million Noonu Velidhoo Harbour Development Project, which was awarded to the Maldives Transport and Contracting Company (MTCC) in late December 2022 and mobilised in February 2023. 

In response, the Minister clarified that the delays were not caused by project abandonment or bureaucratic hold-ups, but rather by global logistics constraints directly linked to the Middle East conflict. He explained that regional instability has severely disrupted maritime shipping and created critical supply shortages for imported materials, particularly rock boulders essential for harbour breakwaters and coastal protection structures. 

To manage these operational hurdles and keep projects moving forward, the Ministry of Finance has established a dedicated project monitoring department to closely track progress and coordinate execution with relevant line ministries.

Broadening the discussion to state finances, the Minister emphasised that the government is currently managing approximately 1,273 signed and active infrastructure projects across the country under a prioritised funding model dictated by cash flow availability. 

At the same time, the administration has maintained a firm focus on stabilising the national economy and managing major debt obligations. He revealed that USD 1.4 billion has been allocated toward national debt servicing over the past two and a half years, including settling a major USD 500 million sukuk through USD 350 million from the Sovereign Development Fund and USD 175 million from state reserves, alongside fully clearing a USD 50 million line from the State Bank of India. 

He reassured the public that as debt pressures ease and global material imports normalise, state funds will remain systematically allocated to finish prioritised island developments.