Minister blames stalled Fenaka projects on ‘mess’ created by MDP administration

The delay in provision of utility services resulted from the “mess” created by former President Ibrahim Mohamed Solih’s administration, says Housing Minister Dr. Abdulla Muthalib, adding that all projects contracted to the Fenaka Corporation at the time were at a standstill when the incumbent administration took over.

Muthalib, who was summoned to the Parliament on Monday, was questioned by Kendhoo MP Mauroof Zakir, a lawmaker from the main opposition Maldivian Democratic Party (MDP), regarding the delay in the water and sanitation project in B. Kihaadhoo.

Responding to the question, Muthalib said that the project began in mid-July, with workers currently constructing the pump station and RO plant. He said that 10 percent of the project was now complete.

He said that they were working to complete the project by the end of October next year.

Muthalib said that by the end of 2023, Fenaka completed only 16 percent of projects contracted since December 29, 2021, including the Kihaadhoo project.

He said that when questioned, Fenaka responded that it did not have the capacity to carry out the projects.

“Fenaka told us that the former management had subcontracted the projects at prices far exceeding what was originally signed, making the corporation unable to carry out the projects. We terminated the contracts and assigned it to the MWSC [Male’ Water and Sewerage Company], because there was no way they could carry out the projects,” he said.

Muthalib said that Fenaka did not have the necessary expertise when it was contracted so many utility projects in the islands, and that some of the companies that the projects were subcontracted out to also lacked proper experience.

He said that even though subcontracting an entire project that is contracted to a state-owned enterprise is a violation of the Public Finance Regulation, Fenaka had subcontracted out the project in its entirety.

“So, the fact is that we faced delays in providing services to the people because of the mess the former administration created,” he said.

A special audit report publicized by the Auditor General’s Office (AGO) last year flagged MVR 2.2 billion financial irregularities by Fenaka between 2021 and 2023.

Some of the serious irregularities flagged in the audit report includes:

• The award of MVR 1.4 billion in procurement contracts without a competitive bidding process.
• The procurement of refurbished generator sets that were passed off as brand-new ones for MVR 17.4 million, despite their actual value being MVR 2.9 million.
• The procurement of equipment before contracts were signed.
• The award of MVR 105 million in delivery contracts to a supplier that did not have a ship to carry the deliveries on.
• The award of contracts to companies linked to Saeed’s family.
• The award of multiple no-bid contracts to companies linked to the MDP.

Three days after the report came out, Ahmed Saeed Mohamed, who served as Fenaka’s managing director during the former administration, was sentenced to prison for corruption in in the award of a 2018 procurement contract, and remains on trial on similar charges.

However, he was transferred to home confinement in February over poor health.

Fenaka, which is heavily in debt, has been plagued with allegations of corruption throughout different Maldivian administrations.

The Auditor General’s Office recommended a criminal investigation into the irregularities uncovered in the special audit.