MVR 29M paid in compensation to Indian company which managed KRH

Audit report shows that MVR 29 million was paid in settlements to India’s Noorul Islam International Private Limited (NII) subsequent to the annulment of the agreement which contracted the company to manage Kulhudhuffushi Regional Hospital (KRH) in 2017.

The report by the Auditor General’s Office following an audit of transactions carried out during the course of NII’s management of KRH read that the Indian company was handed over the management of the hospital for a period of 50 years under an agreement executed with the Health Ministry on June 20, 2017.

The management of KRH had been contracted to NII back then to proceed simultaneously to the development of the hospital up to tertiary standards. However, the company failed to carry out the development works in accordance with the agreed timeline with the Health Ministry while the quality of services provided as the hospital also began deteriorating.

Subsequently, the management of KRH was brought under the management of the Health Ministry in December 2017.

Health Ministry met with officials from NII in 2018 which bore no results. Subsequently, the agreement was annulled in January 2019

A settlement agreement was later signed between Health Ministry and NII in October 2019. This agreement offered NII compensation for monies billed for Aasandha for services provided by the company and the cost of equipment and machinery acquired by the company to develop the hospital.  

As per the settlement agreement – Aasandha had paid over MVR 16 million to NII and an additional MVR 3 million for the equipment and machinery.

Health Ministry also paid MVR 9 million in other expenses borne by NII during their management of the hospital including medical consumables and salaries of foreign staff were paid to the company as compensation. The compensation paid to NII in total, therewith, stands at over MVR 29 million.

The audit report also noted that over MVR 1.9 million which pertains to 157 additional bills have yet to be settled. There is also no evidence of MVR 135,434 which pertains to 30 bills of these was received by KRH in goods and services.

Furthermore, the audit report states that the settlement agreement does not hold NII accountable for monies owed by the company to other parties as a result of the clause in the agreement which states the completion of the implementation of the settlement agreement would free NII from any obligations imposed on them by the management agreement of KRH, in addition to any possible responsibilities that may arise in the future.

NII holds 80 percent shares in the manager of India’s NIMS Hospital, Noorul Islam Educational Trust. The management agreement required 30 percent of profits earned to KRH to be handed over to the Maldivian government.