Kulhudhuffushi City Council has decided to take legal action against Fenaka Corporation over its refusal to sign an agreement for providing electricity services in the city.

This marks the first time a local council is initiating legal proceedings under the Decentralization Act over a public service dispute.

According to the Decentralization of Administrative Areas Act, local councils are responsible for providing electricity services to residents. If a third party provides the service, a formal agreement must be made between the provider and the council. Despite repeated written requests, Fenaka has refused to sign such an agreement.

On June 3, 2024, the council sent a letter to Fenaka stating that, as a separate legal entity, it holds the mandate to provide electricity, water, and sewerage services. In response, Fenaka claimed it was not a third party, citing its status as a company established by presidential decree.

The council refuted this position, arguing that Fenaka qualifies as a third party under the law and that its dealings with other councils are irrelevant to its legal obligations in Kulhudhuffushi. Fenaka has not responded to the latest correspondence.

As a result, the city council, during its 206th general meeting, passed a resolution to file a lawsuit against Fenaka to ensure proper service delivery and compliance with the law.