A recent audit has revealed that the Maldives government lost MVR 354.7 million owing to incapability and corruption of Police Cooperative Society (Polco).
The loss in question is related to the development of housing units for Maldives Police Service officers, contracted by the government in 2013, for which over MVR 1 billion was expended.
As of the date of the audit, MVR 1.06 billion was spent on the project, which is MVR 1,851 per square foot.
According to the information provided from the Ministry of Finance’s Tender Evaluation Board, the market rate of construction by private contractors is between MVR 1,300 and MVR 1,500 per square foot; which would have cost MVR 745.3 million minimum or a maximum of MVR 859.9 million.
The project incurred an excess between MVR 240.1 million and MVR 354.7 million according to the audit, which indicates Polco’s incapabilities and raises questions about possible corruption by the entity.
“The expenditure of nearly twice more than the requirements indicate Polco lacks technical capabilities, amendments to agreements favoring contractors, and other elements that indicate potential fraudulent and corrupt activities in the project,” the report read.
Expenditure breakdown for Polco housing units:
Plot cost, paid to Housing Development Corporation (HDC): MVR 15,458.529
Fines paid to HDC: MVR 151,282
Payments to Noomadi: MVR 76,065,692
Payments to Island Experts: MVR 432,049,000
Payments to Island Experts’ sub-contractors: MVR 199,427,161
Payments to ‘Dhe Koamas’: MVR 4,176,508
Payments to sub-contractors of ‘Dhe Koamas’: MVR 10,049,268
Payments to HAO: MVR 10,282,364
Payments from Ministry of Housing to Amin Construction: MVR 310,517,974
Total: MVR 1,042,719,249 [inclusive of the unpaid MVR 18 million, the total is MVR 1.06 billion]
The audit further revealed that agreements with Noomadi were made in a manner benefitting the contractor’s representative, who remained unnamed. Though unnamed, it was revealed that the representative is the Managing Director of Island Experts and has family ties to the Managing Director of ‘Dhe Koamas’.
The representative was paid, both directly and indirectly, a total of MVR 682 million, the audit revealed.