Government announces completion of all tsunami housing units

The government has announced the completion of all housing units constructed by the state for people made homeless in the 2004 tsunami disaster.

In a joint press conference held today by the housing and finance ministries, Minister for Housing and Infrastructure Dr Mohamed Muizzu declared that 298 housing units in four islands in Gaafu Dhaalu Atoll, and 41 housing units in Thaa Madifushi have now been completed.

Muizzu stated that the government had taken direct control of the project last November on the decision of President Abdulla Yameen following numerous attempts to negotiate with the contractors regarding the delays in work.

On the ninth anniversary of the disaster in December 2013, Yameen had pledged to complete permanent housing for all the 427 families who remained homeless.

Muizzu did not reveal whether new private contractors had been brought in to complete the unfinished work, saying only that there would be no “legal problems in any of the work the government has directly been involved in”.

He also stated that the government took over the project after seeking legal advice from the attorney general and noted that the Anti Corruption Commission and the auditor general were invited to review the proceedings.

Finance minister Abdulla Jihad stated that Vimla Construction Pvt Ltd was awarded a US$20 million contract in October 2008 to build the housing units in Gaafu Dhaalu Atoll for completion within 14 months. Jihad said that approximately US$16.6 million had been spent up to now.

He also noted that the delays and the need for the government to become directly involved in the completion of the housing units meant the projects were likely to cost more than expected, although the full amount has not yet been determined.

“STO has supplied substantial amounts, we estimate that the value (of supplies by STO) will be a significant sum,” Jihad said.

The finance ministry’s audit report of 2011 revealed that it had spent MVR17.5 million to transport materials for the construction of the tsunami housing units in Gaafu Dhaalu. The audit report noted that the expenses, which were not included in the finance ministry’s budget, should not have been paid.

Further, the audit report also recommended a specific audit be done and a report published on the tsunami housing units contracted to Vimla Construction.

The 2004 tsunami resulted in 82 deaths and 26 missing persons in the Maldives. Figures from the UN show that the disaster displaced nearly 10 percent of the Maldives’ population, severely damaging a quarter of inhabited islands with 14 completely evacuated.

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Auditor General’s Office to verify disputed figures in finance ministry audit report

The Auditor General’s Office has said it is verifying whether Vimla Construction Pvt Ltd was in fact given an advance payment of MVR 198.1 million (US$12.8 million) in February 2009 as flagged in the finance ministry’s 2011 audit report.

In a press release last week, the Auditor General’s Office said it was in the process of “further checking and verifying” the disputed figure stated in the audit report (Dhivehi) released earlier this month following questions raised in the media over its authenticity.

The case highlighted in the report concerned a large advance payment for delivery of construction materials for a tsunami-related housing project in Gaaf Alif Atoll.

Vimla has claimed in local media that the company received MVR 5 million (US$324,254).

“The audit report did not state that the advance payment to Vimla Construction for the Gaaf Alif housing project was made in violation of the law and regulations,” the press release stressed, adding that the audit office did not make any recommendations concerning the advance payment.

The case was uncovered during auditing of the finance ministry records, the press release added, and the figures were based on information collected from the ministry for its 2011 audit.

Auditors met with senior officials of the finance ministry on February 24, 2013 to verify the figures stated in the audit report and invited feedback from the ministry in a letter sent on March 19, 2013, the press release revealed.

“However, as a result of not receiving comments for the Ministry of Finance and Treasury’s 2011 audit report as of its publication date, this office believes that errors in the figures concerning the cases highlighted in the report are possible,” the Auditor General’s Office conceded.

The press release added that the Auditor General’s Office regretted “any difficulties” or “diminished name or reputation” caused by inaccuracies contained in its audit reports.

The press statement concluded by providing assurances to the public on the professionalism and impartiality of the audits conducted by the office.

The case flagged in the finance ministry’s audit report for 2011 concerned payments made on February 18, 2009 – just over three months after the Maldivian Democratic Party (MDP) administration took office.

However, following the controversial transfer of presidential power on February 7, 2012, President Dr Mohamed Waheed appointed members of then-opposition parties to cabinet and senior government posts.

Current Finance Minister Abdulla Jihad was also the finance minister during the last year of former President Maumoon Abdul Gayoom’s 30-year reign.

Auditor General Niyaz Ibrahim meanwhile told newspaper Haveeru last week that the office has uncovered a number of issues in the tsunami-related reconstruction projects commenced by the Gayoom government in Gaaf Alif atoll.

Niyaz told the local daily that the finance ministry’s audit report for 2011 was published after a long period awaiting comments from the ministry.

“There could be a mistake since they have not said whether there is anything they object to or not,” he was quoted as saying.

Tsunami reconstruction

Niyaz also revealed that the Auditor General’s Office was in the process of completing a special audit of the tsunami reconstruction projects, which would also shed light on the disputed advance payment made to Vimla Construction.

According to the section of the audit report dealing with the advance payment, the “Reconstruction and Development of Gaaf Alif Atoll Project” was to be undertaken with loan assistance from the Saudi Fund.

However, in 2011, the finance ministry spent MVR 17.6 million (US$1.1 million) out of its special budget to transport material needed for the project from the Hithadhoo Regional Port in Addu City to Gaaf Alif atoll.

While Vimla was contracted for the project and given an advance payment, the report explained that a foreign company named Performance Builders was contracted under a “deeds of assignment” on March 25, 2010 to replace Vimla on the project as the local company had been unable to complete the contracted work.

According to local media, the project was eventually awarded to the Maldives Transport and Contracting Company (MTCC) after Performance Builders also failed to complete the work. The government-owned company reportedly faced a loss of MVR 17 million (US$1 million) due to nonpayment.

The case is currently the subject of an inquiry by parliament’s Finance Committee.