State spends 90 percent of compensation budget

A total of MVR 92.6 million has been spent as compensation so far this year.

According to figures released by the Ministry of Finance this week, the amount accounts for about 90 percent of the total allocated for compensation in the state budget for 2023. This year's budget allocated MVR 101 million for compensation.

Over the last four years, the government has paid out MVR 1.6 billion in compensation to various parties for breach of contract, resulting in the cancellation of agreements. The government has exceeded its compensation budget every year for the past four years.

The government has also formed a settlement committee to seek compensation for the losses suffered by previous administrations. The state has previously said that the compensation owed to companies for the illegal cancellation of agreements by previous governments amounts to MVR 6.8 billion.

The settlement committee received 37 cases before it was dissolved in September 2021, following its last meeting in February of the same year. However, a new rule introduced late last year now allows for the possibility of filing for damages again.

The government has faced criticism for its handling of compensation cases, particularly with regards to the Settlement Committee. This committee, established by the state to handle compensation cases, lacks clear standards for settling disputes, leading to allegations of favouritism and potential corruption, according to a report published by the Anti Corruption Commission in 2021.