Fenaka and RDC to be dissolved under new SOE merger plan

President Dr. Mohamed Muizzu has made the decision to dissolve Fenaka Corporation and Road Development Corporation (RDC) as part of efforts to merge more state-owned enterprises.

At a press briefing on Monday, President Muizzu said that it was clear from audits that the former Maldivian Democratic Party (MDP) administration had misused Fenaka.

He said that his administration had engaged in multiple efforts to improve the state of the company, but that experts advise that it is not sustainable.

President Muizzu said that following extensive discussion, his administration has now decided to merge Fenaka into State Electric Company (STELCO).

“Once this is done, STELCO will provide [utility] services to the entire country. Therefore, all work carried out by Fenaka will be transferred to STELCO, and Fenaka will be dissolved,” he said.

He also announced the decision to merge RDC into Maldives Transport and Contracting Company (MTCC).

"There’s a lot of duplication. The expenses are very high. This change is therefore being brought to deliver infrastructure works through an efficient mechanism. RDC will be dissolved, it will be merged into MTCC, the government will increase its stake in the MTCC and the people will benefit from this,” he said.

President Muizzu said that a sufficient number of employees will be retained and the others let go as part of ongoing efforts to “right size” state-owned enterprises.

Fenaka is a 100-percent state-owned utility company established in 2012 by caretaker president Dr. Mohamed Waheed Hassan Manik.

The company is heavily in debt, and has been plagued with allegations of corruption throughout different Maldivian administrations.

A special audit report publicized by the Auditor General’s Office (AGO) last year flagged MVR 2.2 billion in financial irregularities by Fenaka between 2021 and 2023.

Meanwhile, the RDC, established during former president Abdulla Yameen Abdul Gayoom’s administration, had also been plagued for years with similar allegations of corruption.