The Auditor General’s report on government expenses for the 17th SAARC Summit held in Addu City and Fuvahmulah in 2010 has revealed several financial discrepancies including an overspend of more than MVR 430 million (US$27.9 million) on the event’s allocated budget.
According to the report (Dhivehi), former President Mohamed Nasheed’s government spent MVR 667,874,870.84 (US$ 43.3 million), on the summit – 188.82 percent more than the MVR 231,240,000 (US$14.99 million) budget passed by parliament.
The report was compiled through audits of expenditure by the Ministry of Housing, the Ministry of Foreign Affairs, the President’s Office and the Maldives National Defense Force (MNDF).
The report also made several recommendations including the recovery of money spent, as well as action against those found responsible for the expenses.
The release of the report comes at a time when former President Nasheed – who headed the Maldivian delegation at the summit – is campaigning for a second term in the upcoming 2013 election as the opposition Maldivian Democratic Party (MDP) presidential candidate.
More than a year after the summit, Nasheed was ousted from government in what his party described as a “bloodless coup d’état”, amid a mutiny by sections of the police and military. His controversial resignation followed weeks of anti-government protests that began in January 2012 after the detention of the Chief Judge of Criminal Court Abdulla Mohamed over allegations he posed a threat to national security.
Progressive Party of Maldives (PPM) presidential candidate Abdulla Yameen Abdul Gayoom condemned the financial discrepancies highlighted in the report, prior to its release.
Discrepancies
“Until the end of March 2013, excluding the grant aid and projects, a sum of MVR 667,874,870.84 (US$43.3 million) was spent. This figure is MVR 436,634,870 (US$ 28.5 million) or 188.82 percent more than the budget passed by the parliament to conduct the SAARC summit. The figure that was passed by parliament was MVR 231,240,000. No parliamentary consent as required by Article 96(c) of the constitution was obtained in spending the sum,” read the Auditor General’s report.
Other discrepancies pointed out in the report included an additional MVR 61.8 million (US$4 million) being paid for the construction of the Equatorial Convention Centre built for the summit.
The report stated that the initial cost of the project proposed by the contractor Ameen Construction Private Limited stood at MVR 210.4 million (US$13.7 million). However, after negotiations and changes to the materials being used and the overall design of the structure, a figure of MVR 150 million (US$9.7 million) was agreed between the contractor and the Ministry of Housing and Environment.
“However, due to changes brought to the plan by the government, the cost of completing the convention centre stood at MVR 211,852,834.84 (US$13.8 million). [This was] MVR 61,852,834.84 (US$4 million) or 41 percent excess of the amount that was agreed,” the report claimed.
The report noted the cost, which was more than the initial proposition from contractor, resulted from failure in properly planning the project and frequent changes brought to the agreed design in a non ad-hoc manner.
Apart from the costs, due to a delay in depositing the advance guarantee, the government claimed that the SAARC Convention centre needed to be built as quickly as possible, an advance payment of MVR 30 million (US$ 1.9 million) was paid to the contractor. The report added that the advance guarantee, which included both the advance payment and performance guarantee, had not been deposited.
The advance payment of MVR 30 million was given by the government after converting the retention money taken from the same contractor on a different government contract as the payment guarantee of the convention centre project.
This conversion, the report said, could be perceived as an attempt by the government to financially support a specific party contravening existing laws, since other companies who had proposed their bid did not have any retention money owed by the government and could not therefore enjoy the same privileges.
The Auditor General’s findings said that the advance MVR 30 million payment was made in contrast to section 8.23 of Public Finance Regulation, which states that any such advance payment should not exceed 15 percent of total costs. The MVR 30 million advance stands at around 20 percent of the cost, the report added.
Other discrepancies highlighted in the report included financial losses incurred by the government, violations of Public Finance Act and Public Finance Regulation and wasteful spending.
MDP response
Former ruling party MDP Spokesperson Hamid Abdul Ghafoor described the report as “naive” and “misguided political posturing”, while challenging its credibility.
“What we are saying is that after an audit report is released, the litigation based on the findings must begin as soon as possible. The longer time between the release of the report and start of litigation means such reports are open for political manipulation,” he said.
Ghafoor claimed that MDP came out to reform the country, which included fighting against corruption.
“It is not possible for the MDP-led government to be involved in blatant corruption. Because we came with a plan and strategy for reforms,” Ghafoor contended.
He also said that the public will judge the audit reports and will know how politically motivated the report is.
“Looking at perspective of development and progress, we see this report as just ‘petty accusations’. The report lacked due procedure, impartiality and transparency. It may have been possibly influenced by the political vibe in the country,” Ghafoor alleged.
Auditor General Niyaz Ibrahim meanwhile disputed in local media that the timing of the audit report before the election was political, stating that information contained in such reports was necessary for people to make informed decisions.
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Because we came with a plan and strategy for reforms,” Ghafoor contended.....yeah sure, but nothing has been done
This is pretty disappointing.. our country has no hope now, I thought nasheed was better than this
Is this the Maldivian version of the Shah's Persepolis Celebrations that ushered in mullah rule?
Just to build a convention center had costed over 700 million rufiyaa ? This is a joke.
Even a full new resort with 100 rooms can be build at this price and yet Nasheed spent 700 million to construct and build one building.
These are just some figures and there are millions given to Nasheed closed allies and payments are given without even doping any work .
Many of the jobs were done by NSS and yet Nasheed had paid to his people for the work NSS had done.
This is one classic example of how public money is wasted for Nasheed personal gain and part of this money would have got ended up in Nasheed's own pocket and MDP .
bloody right!? India was the principal sponsor for the SAARC summit. Maldives only spent the money to conduct it at Addu supercity.
Anni just lost my vote. No thanks.
Funny how the sheep quickly assent to listen to a corrupt auditor general who refused to audit golhaa.
Look, I may be a little biased on this one, since I think some of this money was well spent on Addu. Since the Royal Air Force vacated Gan in 1976, this was the largest injection of money and capital here in Addu by any Maldivian government. It will probably remain so, for a long time to come as I don't think a future government led by the Kaaminee clan or Buruma Gasim will ever think of investing here in any significant way. History clearly demonstrates this.
I admit, that some of that money could have been used more wisely, but I don't blame Nasheed for trying. Unfortunately, there were a number of corrupt individuals who took advantage of the situation. A leader cannot run after all those working under him, day and night, making sure every penny is accounted for. You have to rely on the honesty, integrity and faithfulness of individuals. Look around you; how many people have those qualities in ANY political party?
Let's look at history. Close to US$100 million was spent on building a Palace for Pharaoh Abdel Gay Yoom, for his personal pleasure and recreation. Anyone who even bat an eyelid over that one was sent to gaol at His Majesty's pleasure and had their gonads torn out for asking difficult questions. Millions of Rufiyaa were wasted on constructing roads, sanitation, buildings and other infrastructure in Male. Has anyone checked how much was wasted there? No, there isn't even a document to check!
How much money was siphoned off into the bank accounts of "officials" who were in charge of Hulhule airport? Where are the records of the millions of dollars of loans that were taken and how they were spent? Where are the documents that detail the amount of foreign aid received by Maldives in the last 50 years? How much of that was quietly siphoned off into the making of the mega rich today; some of whom are contesting in the Presidential elections?
Credit should be where credit is due. Nasheed tried. People who ran the projects failed their duty and wasted funds. But the people of Addu will always be grateful for what Nasheed tried to bring here. Thank you.
Why this yellow people always defend themselves by saying that everything against them is politically motivated? Can't they think of any other excuse? Bottomline is, if Anni is really for the poor, why waste a big amount of money for just one event? While many Maldivians have poor living conditions. Dollar black market, high inflation, increase in number of crimes, and the list goes on. MDP is very good in twisting facts but you know, not all people can be fooled.
I would love to see the reports of Pharaoh Abdel Gay Yoom's 30 year autocratic rule subject to the same rules of accounting and transparency.
The amount of paper needed to compile such reports of abuse will weigh in several tonnes for starters!
Just goes to show that Anni is no different than Maumoon. I personally think he was more corrupt than him considering these huge figures in various cases. Worst part is MDP loyalists will justify this somehow. Its appalling.
Anni did good stuff and some pretty bad stuff too. But his bad stuff outweighs the good stuff, so he definitely lost my vote.
Considering so many expensive statues and idols were imported to decorate the summit, it may not be so expensive.
You don't get a stature of Lord Buddha stature from discount stores.. It ain't cheap. So why complain about expenses.
Come on, Yaamin swindled 20 times more than that.
And in case you did not know, Mordis public like ranters, looters, swindlers, con artists etc. You would know by looking at the Parliament.
The same old gang trying to keep Anni out of office commenting first as a pack. So obvious.
Of course, the corruption from he previous regime and the unelected government goes unmentioned!!
What!? This Mohomed Naahee is writing against MDP? I smell Jasim behid this. Maybe minivan news now endose qaasim for prezident.
These 'Male'-centric' elitists from Male' are just upset because Anni helped Addu improve more in 3 years than golha ever did in 30 years.
My vote is with Anni.
And hehe still doesn't get that the 'idols' were donated from SAARC countries.
The people of Addu are very glad that this money was spent on Addu and not once again on Male. How much money was wasted in hosting SAARC summits in Male? How much money was pocketed from those events? Why don't the Auditor General look into those as well?
This is a deliberate attempt at undermining the development of the atolls. If this money was wasted on Male, no one would care. The truth is that the rulers in Male do not ever want to see Addu becoming a developed place. This is pure and simple jealousy. Advice for the Auditor General: shove this audit report up your a*** where the sun doesn't shine.
Prez Nasheed being a leader should have been able to keep everything in check. His close buddies just made money so they could spend it for his reelection. Reeko, Mausoom Mariya they all had a piece of the pie while Nasheed was president.. Ofcourse maumoon had his share as well but MDP came into power on the platform of no corruption.
long overdue investment in addu and the south. thank you nasheed.
Why hasnt this article mentioned, the fact that the MDP govt used Police and MNDF personnel to do the works of the Saarc Convention Centre and then fraudulently billed the works as works done by Southern Utilities and other MDP affiliated companies ?
And paid out the money to these MDP companies ? Isnt that blatant corruption Hamidh Abdul Qafoor ?
How would you like it if i billed the Majilis for the work done by Hamidh Abdul Qafoor in Majilis and collected Hamidhs salary for this year in my name ? Would you still say that its ok ?
@Individual on Wed, 24th Jul 2013 2:20 PM
"Why hasnt this article mentioned, the fact that the MDP govt used Police and MNDF personnel to do the works of the Saarc Convention Centre and then fraudulently billed the works as works done by Southern Utilities and other MDP affiliated companies ?"
Have you seen the accounts? How do you know they were "fraudulently billed"? Facts:
(1) SUL and and others had contracts with the government to deliver works.
(2) The government paid for those contract under the terms of those contracts.
(3) MNDF personnel were called into finish works that the contractors failed to do on time.
There was no "fraudulent" payment involved. The government should have asked for compensation from the contractors for failing to finish the works on time. That's all.
Are these "audits" politically motivated? Yes, for sure!
This sudden urge by the auditor to burn the midnight oil and bombard us with these reports is a tactic to divert attention from the bad press landing on Gasim and Yameen.
They can see the porn actor Ali Hameed dragging them down the pits, so they had to find a way to keep the media headlines off them!
The relevant government authority investigating and filing a report on over-budget is legitimate. Although you must consider when the money was spent on much needed infrastructure for a newly inaugurated city and no mention of corruption in the report.
It is with this that this report should be judged.
I don't give a rats about Anni or yameen. They can both swing from being charming, charismatic, warm, loving men to being cold, cruel, manipulative psychic serpents. But, f**k what they can and can't be. Your in a democracy now. Use your power to tell them what to be they are your servants. It's not about them and their crazy schizophrenic egos, it's about you and what your needs for self realisation are. Stop treating these leaders like gods and they may come down to earth and start realising your the boss, not them!
@ Ben P. Well said.
Maldivian still believe leaders have a divine authority. And Adaalath does not fail to remind so it its flock.
One of the common saying in local language is 'bala verikamakee kalaage dhevaa ehcheh' -literal meaning is ' are u stupid that u don't realize that power is given by God'. The implication is that if u challenge leaders, u go to hell.
And if u are political leader, why would u talk against such windfall support.
Thanks for the short post.
@Ben Plewright on Wed, 24th Jul 2013 8:19 PM
"Stop treating these leaders like gods and they may come down to earth and start realising your the boss, not them!"
Well, it's a bit hard to do that, when you have to beg these people to get a decent job that pays a decent wage. Look at all the suckers around Gasim. Are they with him because of their love for democracy, Islam and all that they claim? Of course not. His money is what attracts those suckers, like leeches to blood.
@ Ahmed Bin Addu Bin Suvadheeb
There was no "fraudulent " payment involved ?
1. SUL was contracted the work of Road construction for the Saarc Summit. (There were no subcontractors) MNDF was involved in about half of the manual labour works in laying stones, constructing water drains. Yet SUL billed for and collected the money, including for the work done by MNDF. Isnt that fraudulent ?
2. According to the audit reports, SUL subcontracted and released payments for non-existent companies ? Shouldnt SUL have checked when releasing payments that they were actually releasing payments to an actual person ? Isnt paying Donald duck and Mickey mouse for equatorial centre works fraudulent payment ?
3. SUL was contracted the work of ground leveling and laying pavement stones in equatorial convention centre. SUL subcontracted the work to two Maldivian Companies (AIR construction, and S.R Trading) who failed to do their work, In spite of this SUL paid these (MDP affiliated anyone ?) companies 2.1 million for doing squat 9ergo nothign). And then MNDF and police personnel was brought in and did about 60% of the work. And when the work was finished, SUL billed the Govt and collected 5.1 million rufiyaa for above works. Tell me how that isnt frauduelent ? Shouldnt SUL at least tried to recoved the money they paid (fraudulently ?) to the subcontractors for contract non-performance, considering SUL was the one that subcontracted them, and not the govt ?
4. In certain sub-contract works, SUL added markups to works done by private companies, and which SUL wasnt even involved of upto 60% (eg: walkways work of a 3 million work, SUL added an extra 1.8 million rufiyaa to the bill, inspite of having done nothing. Isnt that fraudulent ?
5. For landscaping works done by a private comapny for 1.2 million rufiyaa, SUL added an additional 1.8 million rufiyaa to the the bill to Finance Ministry, and collected the money. Isnt that frauduelent payment !
Maybe in your dictionery fraudulent payments mean something else ! For someone from Addu, you seem pretty idiotic in trying to cover up deceptive acts just because you support the party. Support the party friend, dont support the acts of corruption your party commits !
Nasheed is corrupt guy and he and his friends had robbed this country even much bigger than what gayyoom and his cronies had managed to robbed in 30 years.
I know this will be hard to digest to the cult followers but it is the fact.
Not a single ministry is out of corruption and all the money is being wasted and were given to Nasheed close friends and part of the money again were taken back to Nasheed personal accounts and some goes to MDP too.
This is why Nasheed wanted to have always " Mega" projects and the huge sums can be taken .
Thilafushi, project, Reeco is just a name and he was used as a means to get the money into Nasheed account through so called "Legal" system. This project was awarded to Reeco at much higher than market prices and then part of this money gets ended up in Nasheed pocket .
Same goes with GMR , MWSC Dhiraagu and SAARC summit projects also.
Still GMR is paying huge amount of money to MDP to bring them back to power with the hope of taking airport back. But i guess soon GMR will realize that they are wasting money and they will stop funding MDP.
Ha ha ha, I like all the above Rants. Keep going 'hammer and tongs' guys keep it up.
What is the problem if you get those Police and military to do some hard work who get paid for doing nothing?. It was a fantastic idea to get the work done by the people who are paid by the government for doing nothing and you give that money to some other needy people. The police should be happy at least they have helped some people indirectly. Morons….. Just learn to be little generous. Also what is the purpose to keep the toilet paper in the coffers it is better that you distribute them freely and may be this will help for people to do some work to chase that toilet paper you call them Rufiya and ultimately you can add some values to it once it is bargained in the market.
@ABABS: I know dear brother. And I truly am very sorry. No human can have so much power without, at some point, abusing it, in many many ways which hurt us - DEEPLY.
The only way to work towards stopping this system of patronage I am referring to is by demanding, through collective action, through the threat of your voting power, that these guys need to pay enough taxes to provide social services. These taxes need to enable you to access support for health, education, and other needs without you having to go through them or through any political party, power broker or politician.
I know there will be teething problems with designing such a system, such as, ensuring accountability, transparency so we know where the taxes are going and can make sure they are going to the needs of the people.
I know this is going to be a difficult struggle. It is a battle which we could take many years to win. But, we have to undertake the struggle for the dignity of the people. This is the real "Jihad" (struggle not physical warfare...) that the Maldives needs. This is the struggle which is truest to the principles of Islam. And thats another apsect of the struggle we need to win. We need to prevent Mullah's from ususrping the principles of Islam to use these principles to serve the power hunger of the "patrons..." the way they have done. We have to make it clear that authentic nationalism, authentic religion, is social justice. Sheik's, humanists all need to be drawn to the side of the people, where they SHOULD BE anyway, and help us.
We saw what happened to Nasheed and MDP Cabinet last time they tried to do this, so I am under no illusions that I am speaking a fantasy. But it is a fantasy we must fight to make a reality.
this sound great it might have increase the financial budget of our southern neighboring country