Auditor General's Report Reveals MACL Subsidiary's Land Reclamation Deal Details

The Auditor General's Office has revealed that the Maldives Airports Company Limited (MACL) has taken over land reclamation work in Hulhumale Phase Three and Thilafushi, receiving land instead of money as payment. This matter was disclosed in the audit of Marine and Integrated Infrastructure Development (MIID), a subsidiary of MACL, which was made public by the Auditor's Office. According to the audit, this information had not been previously disclosed by either the government or MACL. The project is based on an agreement signed on August 21, 2023, between the then Bank (now HDC) and Capital Marine and Civil Construction (CMC), covering reclamation of Hulhumale, Thilafushi, and Dhiyaneru Bay. HDC initially stated the agreement's value was 259 million dollars (approximately 4 billion rufiyaa), but the payment method was not specified at the time. It later emerged that HDC agreed to provide CMC with an advance of 20 million dollars and pay the cost by handing over 10 hectares of land from Hulhumale and 9.6 hectares from Thilafushi for 99 years. With the project stalled for nearly two years, MIID took over under MACL's responsibility. MIID signed a novation agreement with HDC on October 7 last year to assume all responsibilities and rights regarding the work. Although the company changed, the land reclamation work is still subcontracted to CMC. The audit states that MIID paid CMC 123.6 million rufiyaa and facilitated 37.3 million rufiyaa worth of fuel for CMC's dredgers by borrowing from the State Trading Organization (STO). The audit reveals that MIID must pay CMC 1.76 billion rufiyaa (113.18 million dollars) under the agreements, with 323.8 million rufiyaa paid last year and the remaining 1.43 billion rufiyaa due next year. However, the audit contains no information on the total contract price for future land reclamation payments. MIID has taken charge of the lands to sell them in the future, but the size, direct location, and ownership conditions have not yet been finalized. The audit also notes MACL's financial condition is poor, with its debt standing at 13.4 billion rufiyaa according to its 2024 audit. MACL has taken a 40-million-dollar loan from foreign banks to repay loans for airport development, and the government issued a 650-million-rufiyaa loan to the company for the Giraavaru Bay reclamation work.