The Edition


ACC orders Fenaka to halt mega sewerage system project

Fathmath Shaahunaz
08 October 2018, MVT 18:09
Fathmath Shaahunaz
08 October 2018, MVT 18:09

The Anti-Corruption Commission (ACC) has ordered state-run utilities firm, Fenaka Corporation, to halt a mega sewerage system project that was awarded to a Sri Lankan firm.

Fenaka had awarded the project to establish sewage systems in 20 islands, to Haycarb of Sri Lanka on July 31. While the project is yet to commence, reports surfaced that Fenaka is abruptly moving to sign loan agreements for the project, soon after the Presidential Election held late September.

Following a case filed at the graft watchdog over Fenaka's actions, ACC ordered the utilities firm last week to halt the mega sewerage system project until the commission completed its investigation. The complaint submitted to the ACC alleged that corruption was involved in the project, and that it was awarded unlawfully to Haycarb.

In its letter to Fenaka, ACC pointed out that Fenaka was suddenly moving to sign loan contracts for a project that was on hold until now, during the ongoing transitional period after the presidential election. Highlighting that the government is to issue a sovereign guarantee to finance the project, ACC warned that Fenaka Corporation's borrowings would spike to 75 percent if the firm proceeded with the project, and that could face great challenges in securing loans in the future.

While Fenaka had also originally revealed that the government would issue a sovereign guarantee for the project, local media Mihaaru reports that ACC's order to halt the project came while Fenaka was working to secure loans totalling USD 52 million (MVR 866 million) from five banks of Sri Lanka.

According to Mihaaru, this includes loans of USD 15 million from Sampath Bank, USD 10 million from People's Bank, USD 10 million from National Savings Ban, USD 7 million from Pan Asia Bank, and USD 10 million from Bank of Ceylon.

Regarding the project's finances, Mihaaru cited a lawyer that should Fenaka disregard ACC's order and sign any loan agreements, the government would have to bear responsibility.

While ACC ordered to halt the project last week, rumours also surfaced that Fenaka's Managing Director Mohamed Lamaan was in Sri Lanka this week to sign loan agreements for the project. Mihaaru reports that while the media was unable to reach Lamaan for comment, he returned to the Maldives late Sunday.

Meanwhile, Fenaka's spokesperson Mohamed Manik has stated that he is not aware of ACC's order to halt the project, and that he would have to consult with the corporation's legal department.