Parliament passes bill to amend Decentralization Act

Parliament has passed a bill to amend the Decentralization Act, introducing new regulations to strengthen government oversight of the financial operations of local councils.

The bill, proposed by Fuvahmulah South MP Ibrahim Hussain, was approved with 52 votes in favor and seven against. Despite drawing criticism from the Maldivian Democratic Party (MDP) and some local councils, the bill was passed by the parliamentary committee last night.

Under the new amendments, councils are now required to operate in accordance with regulations set by the Ministry of Finance and the Local Government Authority (LGA). This includes rules on financial management and operational procedures.

1. Employment and Leasing Restrictions: In the final year of a council’s term, councils may only hire or contract employees, or lease land, lagoons, or reefs under their jurisdiction, following specific government rules.

2. Limitations on Economic Activities: Local authority companies formed under councils are allowed to conduct economic activities within their respective areas. However, these activities must not duplicate those already being carried out by private businesses on the island(s), unless deemed essential for the structural development of the area.

3. Investment Cap: The total capital or investment of local authority companies must not exceed MVR 10 million.

4. No Rent on Public Service Facilities: The bill prohibits the government from charging rent for land or buildings leased to parties providing essential public services.

5. Bank Account Regulations: Council bank accounts must be managed according to procedures set by the Ministry of Finance. Councils are also required to submit regular statements of their bank accounts to the ministry.