Companies in debt to govt barred from getting projects

Maldives' parliament on Tuesday, passed to changed the government's policies that would see private companies in debt to the state being barred from getting awarded government projects.

According to a report put together by the public accounts committee of the parliament, both government and private entities owe MVR 1.4 billion to Housing Development Corporation, a state owned enterprise managing parts of Hulhumalé.

While government offices and other state owned enterprises are also in the list of debtors, private companies account for about MVR 1.16 billion of the remaining debt.

The report highlighted that many of the companies that have not paid HDC use lands in Hulhumalé for their business, and that additional lands had also been issued to them.

While some of these agreements have been cancelled, adequate efforts have not been made to recover the money due, the report also said.

Based on its findings, the committee recommended a total of seven remedies for the situation.

One of the solutions includes developing a plan to recover the funds, provide repayment relief and cancel debts, and submitting the plan to the committee within 30 days. It also recommends HDC to withhold assets belonging to the companies that HDC has authority over, and ensuring all project bidders have no payments due to be paid to HDC.

The committee further decided to notify the Finance Ministry to change its policies to ensure whether companies have outstanding debts to the government or state owned companies before being awarded government projects.

The committee report also decided to notify the ministry to set up a system to offset government receivables and payments, and to have HDC run its CSR initiatives more transparently.

The committee's report was passed by the parliament with a unanimous 71 votes.