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Public Finance Act amended, will be gazetted soon: Minister Ameer

Shahudha Mohamed
25 September 2020, MVT 16:26
Minister of Finance Ibrahim Ameer. PHOTO: MIHAARU FILES
Shahudha Mohamed
25 September 2020, MVT 16:26

Minister of Finance Ibrahim Ameer, on Thursday, revealed that the state amended the Public Finance Act to prevent opportunities for corruption and forwarded the document to be gazetted.

Ameer's announcement comes after the Anti Corruption Commission (ACC) requested the ministry last week, for the second time, to slash Section 10:27 from the Act.

The corruption watchdog made this request due to various issues identified in ongoing investigations, stating that the Section increases the risk of corruption by minimising transparency and reducing competition in the bidding process.

The Public Finance Act was previously amended in July 2020 on ACC’s request as well.

Amendments to Section 10:27

The recent amendments to the Public Finance Act lists the instances in which the state can award projects without a bidding process.

1. The state can award a major project, which is preplanned by the government, to a company, or a subsidiary company of a company, in which the state holds a majority of shares over 50 percent, without a bidding process. The state can also similarly award such projects to a company listed on Maldives Stock Exchange, at which the state holds the majority of shares.

2. The aforementioned company must be fit to undertake the work required by the project awarded by the state without a bidding process.

3. If the state awards a project under these circumstances without a bidding process, the company contracted with the project is prohibited from making third-party contracts to complete the project.

4. However, if the nature of work required for project completion cannot be undertaken by the contractor, they are obligated to make a third-party contract with another company, with a permit acquired under Section 10:09 of the Public Finance Act.

5. The state must ensure that the company and, if necessary, third-party contracted for the completion of project have the capability.

6. In case of a third-party contract, the primary contractor must ensure that the third-party will not need to hire another company to complete the tasks stipulated in their contract.

7. During cases where the state awards projects without a bidding process, the contractor must be chosen with the counsel of the Finance Minister after acquiring a permit under Section 10:09 of the Act. Details on the type of project, total cost of project and reasons for choosing the contractor must be submitted to the minister.

The Public Finance Act, which initially did not leave room for corruption, was amended during former President Abdulla Yameen Abdul Gayyoom’s tenure on May 28, 2015.

Leaders of the incumbent administration alleged that 2015’s amendments were brought to allow stealing chunks of funds from projects.

After conducting an assessment into the state’s policies on awarding projects without a bidding process, the corruption watchdog raised several concerns to the President’s Office and Finance Ministry, noting that 2015’s amendment contradicts with the main framework of the Public Finance Act as well as the international guidelines on preventing corruption.