The Auditor General’s Office has identified significant procurement and payment irregularities in 634 projects undertaken by the Ministry of Infrastructure, Housing and Urban Development between 2019 and 2023, involving total expenditure of MVR 23.06 billion.

A compliance audit report released today highlighted several issues, including irregularities in the procurement and payment processes for a MVR 59.35 million project to install 20 automated parking systems in Malé and Hulhumalé. The report also found that efforts had not been made to recover all amounts due to the State under financial regulations.

The audit further found that records relating to certain expenditure were lost in a fire in 2024, while information on assets paid for in the incident had not been entered into the Public Accounting System.

One of the key findings was that MVR 136.5 million, representing 76 per cent of MVR 180.2 million paid as advance payments for 25 cancelled projects, remained unrecovered as of July 2026.

The report noted that the ministry had written to some contractors seeking repayment but had failed to take the required legal action within the stipulated timeframes.

Among the cancelled projects was a 400-unit housing development in Kulhudhuffushi City. Of the MVR 65.99 million paid in advance, 90 per cent remained unrecovered. The contract was terminated after only 18.74 per cent of the work had been completed. The current Government subsequently handed the project to the Housing Development Corporation (HDC) on 26 August.

Fourteen of the cancelled projects had been assigned to Fenaka Corporation. Of the MVR 63 million paid in advance for these projects, MVR 51.8 million remained unrecovered. Responsibility for continuing the projects has since been transferred to the Malé Water and Sewerage Company (MWSC).

The audit also found that the Government had incurred an additional MVR 112.33 million to complete projects after transferring them to other contractors due to inadequate progress by the original contractors. Several projects had also failed to meet their agreed completion deadlines.

The Auditor General’s Office has recommended corrective measures to address the findings and strengthen financial management and accountability.