Audit flags MVR 1.4bn in no-bid contracts by Fenaka over three years

Then-President Ibrahim Mohamed Solih opens new powerhouse in GA. Nilandhoo, accompanied by then-Fenaka Managing Director Ahmed Saeed. (Photo/President's Office)

A special audit on Fenaka Corporation has uncovered that the state utility company awarded MVR 1.4 billion in contracts without a competitive bidding process over the course of three short years from 2021-2023 – during the Maldivian Democratic Party (MDP) administration.

The audit report, publicized by the Auditor General’s Office (AGO) on Thursday, flags multiple financial irregularities by Fenaka.

According to the report, the total spending by Fenaka from 2021-2023, excluding spending on permanent employees, amounted to MVR 8.8 billion. This included spending on procuring equipment and resources for its operations, and spending on constructing powerhouses and office buildings in various islands.

The spending that prompted the highest-level of scrutiny from auditors was the 438 different contracts - collectively worth MVR 1.4 billion – that were awarded by Fenaka without a competitive bidding process – to procure electric cables, generator sets, transformers, and other equipment needed for water and sanitation services.

The MVR 1.4 billion in no-bid contracts included MVR 544 million in contracts to procure electric cables, MVR 419 million in contracts to procure equipment for water and sanitation services, and MVR 259 million in contracts to procure generator sets.

No-bid contracts are typically awarded due to urgency, unique expertise, or national security concerns. But the audit uncovered that 48 percent of 384 contracts were awarded without their being any “urgent” circumstance requiring the company to forgo a competitive bidding process.

438 different contracts - collectively worth MVR 1.4 billion – that were awarded by Fenaka without a competitive bidding process.

One company was awarded eight contacts collectively worth MVR 149 million, another was awarded three contracts worth MVR 130 million, and a third one was awarded 10 contracts worth MVR 107 million.

Some of these are companies that senior MDP officials have stakes in.

The Auditor General’s Office concluded that there’s grounds to believe these financial irregularities constitute to providing specific parties with undue advantages, and recommended an investigation.