MVR 59 million paid in advance for the construction of 400 housing units in Haa Dhaalu atoll Kulhudhuffushi has not been recovered following the cancellation of the contract over delays, according to an audit report.

The 2018–2023 audit report of the Ministry of Housing, released by the Auditor General's Office on Monday, found that the previous government had paid MVR 65.99 million in advance for the project.

Of the amount paid, MVR 59 million, or approximately 90 percent, remains unrecovered. Only MVR 6.7 million has been recovered so far.

Twenty-Third Metallurgical Construction Group Co. Ltd., a joint venture involving Donbez Pvt Ltd, was awarded the contract in July 2022 to construct the 400 housing units in Kulhudhuffushi.

Donbez Pvt Ltd has shares held by former Fuvahmulah North MP Mohamed Rasheed.

The contract was valued at MVR 439.9 million, with a completion period of 540 days.

However, the agreement was cancelled last year, and the project was handed over to the Housing Development Corporation (HDC) in August 2025. At the time, construction had not progressed beyond the installation of the pillars.

HDC subsequently awarded the project to Rainbow Construction as a subcontractor.

The audit found that only 18.74 percent of the project had been completed when the original contract was cancelled.

The Auditor General's Office called for action against those responsible for negligence, noting that failure to recover money owed to the state is unlawful.

The project involves the construction of 400 housing units, each measuring 1,000 square feet. The ground floor of the 11-storey building is designated for commercial purposes, maintenance offices and parking.