In a move that has sparked controversy and raised eyebrows, the Maldives has chosen to partner with Chinese firm CAMC Engineering for the redevelopment of Kadhdhoo Airport into an international hub. Maldives’ decision to engage sanctioned Chinese Firm has drawn criticism due to CAMC Engineering’s presence on the sanctions list of the Asian Development Bank.
The agreement between the Maldives and CAMC Engineering, a subsidiary of the state-owned Sinomach conglomerate, was signed during President Mohamed Muizzu’s visit to Fonadhoo in Laamu Atoll. The groundwork for this partnership was laid during Muizzu’s state visit to China, where he held talks with Sinomach chairman Zhang Xiaolun, resulting in the signing of two agreements for infrastructure construction on strategic islands in the Maldives.
When referring to a “sanctioned Chinese firm,” it typically means that the firm has been placed on a sanctions list by a regulatory body or organization. In this case, the Asian Development Bank (ADB) has sanctioned the Chinese firm, CAMC Engineering, which is a subsidiary of the state-owned conglomerate Sinomach.
Being on the sanctions list of the ADB signifies that the firm has been found to have engaged in activities that violate the ADB’s guidelines, such as fraudulent, corrupt, coercive, collusive, obstructive practices, or other integrity violations.
While the specifics and costs of the projects under this agreement are yet to be announced, the scope of the redevelopment includes ambitious sub-projects aimed at transforming Kadhdhoo Airport into a world-class aviation facility. These projects range from offshore bunkering services to a cruise terminal, super yacht marina, eco-resort, and transhipment port.
CAMC Engineering is a sanctioned Chinese Firm on the Asian Development Bank’s sanctions list. The bank imposes sanctions on parties involved in fraudulent, corrupt, coercive, collusive, obstructive practices, or other integrity violations.
Despite the ambitious plans, concerns have been raised about the quality and cost-effectiveness of these endeavors. CAMC Engineering has faced criticism for shoddy workmanship and inflated costs in similar projects in the region. For example, in Nepal, the firm initially bid $305 million for the development of Pokhra International Airport, nearly double the cost estimate. After criticism and allegations of favouritism, CAMC lowered its bid to $216 million, still significantly higher than the initial estimate.
This decision also raises concerns about the Maldives falling into the “debt trap” under China’s Belt and Road Initiative (BRI). Several countries, including Bangladesh, Sri Lanka, and Pakistan, have faced financial difficulties as a result of the investment lure under the BRI.
The previous government in the Maldives, led by Ibrahim Solih, had expressed concerns about ongoing Chinese-backed projects, including the China-Maldives Friendship Bridge, built at a cost of $200 million. Solih’s administration sought to review and renegotiate these projects due to financial implications and terms.
Muizzu’s decision to engage Chinese companies for major infrastructure projects may further deepen the Maldives’ ties with China but also comes with risks and challenges. As the Maldives navigates this partnership, the world watches closely to see how it will impact the country’s future and may attract sanctions.
