Instructions against awarding projects to companies in debt

Parliament, on Tuesday, has instructed against awarding major projects to companies that have outstanding debts with the state, as part of efforts to recover MVR 1.2 billion in unpaid rent owed to the Housing Development Corporation (HDC) by various companies.

According to a report compiled by Parliament’s Public Accounts Committee after their investigation into the matter, HDC is owed a total of MVR 1.4 billion in outstanding payments. This includes MVR 54.5 million from government institutions, MVR 200.5 million from state-owned companies, and MVR 1.2 billion from private companies.

The report detailed that HDC terminated lease agreements for 188 locations, including land plots and buildings, due to nonpayment of rent. In its efforts to recover the outstanding rent, HDC managed to recover MVR 221.8 million last year. Nevertheless, MVR 1.2 billion still remains pending.

In their report, the Public Accounts Committee directed HDC to implement the following measures as part of its efforts to recover the funds.

At Tuesday’s parliamentary sitting, a vote was held on the Committee’s report, which was unanimously approved by all 71 lawmakers in attendance.

The seven measures outlined in the report are as follows:

1. Formulating a plan to recover the funds and submitting it to the Committee within 30 days
2. Inquiring about the estimated market price of assets held by companies in debt, and withholding the assets that HDC has the authority to seize to recover the funds
3. Formulating a policy on granting additional time to pay rent and waiving rent, and submitting it to the Committee within 30 days
4. Confirming whether bid applicants have any outstanding debt with HDC before awarding an additional project
5. Instructing the Finance Ministry to confirm whether companies awarded major government projects have any outstanding debt to the state before awarding the project
6. Instructing the Finance Ministry to establish a system that would allow offsetting funds owed to and by the government  
7. Advising HDC to conduct CSC initiatives in a transparent manner

President Dr. Mohamed Muizzu has vowed to recover billions of Maldivian Rufiyaa owed to the state. He emphasized that funds will be collected from individuals with substantial debts to the state, as the Maldives faces severe financial challenges due to its struggling economy.

It is also worth noting that the government itself owes large amounts of money to private companies. While President Muizzu had stated that these payments would be settled before Ramadan, they have yet to be paid.