Debt at MVR 954 million when management changed: MTCC

Maldives Transport and Contracting Company (MTCC) has stated that its financial situation was very dire when the new administration had come into office and the company's new management had assumed responsibilities.

While MVR 1.7 billion owed to the company remains unreceived, there is a debt of MVR 954 million of the company, MTCC's senior officials revealed in a press conference on Wednesday.

MTCC CEO Abdulla Ziyad claimed that despite media outlets reporting that the company had been managed notably well in the past years, the facts are markedly different, and the situation of the company is worse than perceived.

"Management cost is very high. This is a situation where a large number of sites are idle, and we have to bare a lot of costs. There is also negligence is handling property. And especially, citizens will be concerned about the condition of the 'Mahaa Jarraaf' (a hopper dredger)," Ziyad said.

Ziyad alleged that the actions of the previous management had resulted in causing halts in several projects.

He said that efforts are ongoing to identify the specify issues that have arisen, and to take measures to find solutions for these. Audits are also being performed on matters that may cause loss to the company, he added.

MTCC's Chief Financial Officer (CFO) Hussain Mohamed Manik revealed that the company has MVR 1.7 billion owed to it at present. Approximately MVR 800 million of this is due from the government.

Debts due from MTCC stand at MVR 954 million, he said. Of this, 50 percent is owed to foreign companies.

"Company borrowings (loans) stand at 100 million. Our strategy in recovering receivables (money owed to the company) is to diversify private projects. By diversifying private projects, we want to earn dollars through them," Manik explained.

Manik claims that opting for projects that would bring in dollars would provide ease for the company even in debt repayment.

He announced that in last January alone, the company had commenced a USD 19 million project, and also conducted a USD 1.1 million project.

As per Manik, the aim of the company is to increase revenue in the trading area to 500 million. Although accepting there are challenges in achieving this, Manik expressed confidence that this can be done through adopting projects in new areas.

The quarterly report indicates that the company's revenue of 2023 was at MVR 3.2 billion, with a net profit of MVR 130 million. These numbers indicate a MVR 66 million decline from the previous year.

Ziyad said that when he had assumed management of the company, 85 percent of its revenue was from government run projects. He stated that major changes are being put in effect to rectify this. He indicated that this would be achieved by venturing into private sector projects, as well as trading and new businesses.

MTCCs Head of Projects Department Ahmed Latheef stated that there are 192 projects contracted to the company, three of which was completed within the last three months.

He stated that work is progressing on 123 of these projects, while 69 projects are yet to be commenced.

"We have recommenced 8 projects. This includes projects which had been previously signed by the former management. In addition to that, we have gained 7 new projects. The value of those 7 projects is approximately MVR 360 million," he said.

Latheef revealed that while land reclamation and dredging is one of the main areas of work undertaken by the company, the 'Maha Jarraaf' (hopper dredger) used in these projects has been damaged and out of commission for over a year now.

"Because of this the dredging capacity, meaning any revenue that could have been earned through dredging, has been lost. A third of our projects are from dredging. So, with the Maha Jarraaf being grounded for 20 months, we are losing any profits we could have made," he said.

MTCC CEO Ziyad said that efforts are ongoing to arrange a loan to source an additional barge and other related machinery to be used in the company's dredging projects.