Loss of Rf35m for MTCC due to negligence of Finance Ministry

Studies by Parliament’s Finance Committee have revealed that Maldives Transport and Contracting Company (MTCC) faced a loss of Rf35 million over one year, due to Ministry of Finance having assigned tasks of a project supposed to have been carried out by another company, to MTCC.

Presenting the case to the Committee at today’s meeting, Chairperson Dhiggaru MP Ahmed Nazim said that the then Finance Ministry had appointed MTCC as a supplier for a project based in Ga. Atoll, carried out by a Philippine company with assistance from the Saudi fund.

However, the contractor failed to pay approximately $2.4 million (Rf35 million) to MTCC for its services.

“Why did the government try to involve MTCC in a project which had been contracted to another company? Why make a company owned by the state and citizens suffer such a loss? MTCC is the group which suffers, because Finance Ministry opened LCs at State Bank of India without any margins. This is very strange,” Nazim said.

He said that the supplies were unloaded at S. Hithadhoo harbour, and the barges used to transport them to Ga. Atoll were rented by Finance Ministry.

The project was assigned to the Philippine company following Vimla Construction’s failure to progress with the project. The Philippine company was a sub-contractor of Vimla Construction.

“Everything was facilitated for this company - which raises the question, why did they do all this for this company?”

Nazim said that MTCC had repeatedly notified Finance Ministry to pay the Rf35 million, and that several documents related to this case are missing.

“LC documents, as well as some documents on whether the project was undertaken are missing. I have sent several questions to Finance Ministry which require very direct answers,” Nazim said.

Nazim also presented at today’s meeting the answers sent by Finance Ministry.

According to Finance Ministry, MTCC was appointed as a supplier in order to speed up the project following prolongation of its progress; and that the project is ongoing.

“We have to clarify what happens to this money owed by the state to MTCC. Otherwise, MTCC will have to take an international company to court,” Nazim said.

Committee member Hamza said that officials of Finance Ministry have to be summoned to conduct a public inquiry in relation to this case, and that action should be taken against the officials of MTCC who approved the project.

Several other members proposed that the case be sent to Anti-corruption Commission (ACC) for investigation. However, most members agreed that the case should be further assessed by the committee.

“Business transactions do not always involve corruption. We have to conduct a more thorough assessment of the case before sending it to ACC.”

MTCC is owned 47.8 percent by the state and 44.7 percent by the public. The company made profit until 2008; however faced a loss of Rf19 million in the first six months of last year.