Public Service Media (PSM) allocated MVR 22 million in breach of regulations to the company responsible for the 'Medium Wave' project, which involves relocating the antennas of Dhivehiraajjeyge Adu from its former location in Henveiru to Kaafu atoll Thilafushi, according to the company's audit report.
The audit report, released by the Auditor General's Office last Monday, indicates that after rejecting the bids submitted in response to PSM's public announcement for the project, they solicited proposals through a restricted tendering process. The report also highlights that the bid documents were altered to remove the requirement for assessing the financial capability of the proposing parties.
The report states that the project was awarded without evaluating the financial capacity of the contracted company, which also lacked the technical expertise required for the project's core tasks.
In September 2022, during his appearance before the Parliament's State-Owned Enterprises Committee, PSM's former Chief Internal Auditor, Ahmed Fazeel, also brought up this issue, alleging irregularities in the project that PSM initiated in 2017.
The project, initially announced twice, saw bids in the first round from American company Gates Air, Sri Lankan company Tantri, and several smaller companies. Following the second announcement, the MVR 44 million project was awarded to Sri Lanka's Tantri.
According to the audit report, although PSM's approval was required before subcontracting any portion of the project, the contractor subcontracted work to other parties without securing this approval.
The report further states that despite the project being given a deadline of five months and 14 days, it remains incomplete after more than six years.
Additionally, the report notes that although the contractor was obligated to pay all taxes, duties, and fees to the state related to the project, PSM spent MVR 1.39 million to cover the clearance fees for items imported for the project. This amount has not been reimbursed to PSM by the contractor.
"Contrary to PSM's procurement policy and work agreement, the contractor was paid 50 percent of the total cost (MVR 22.5 million) as an advance payment before the commencement of the project work, without securing a bank guarantee or advance payment guarantee," the audit report states.
The report also mentions that 90 percent of the project cost, amounting to MVR 40.5 million, was paid to the contractor without obtaining necessary documents like progress reports.
According to the report, although payments to the contractor were made according to the Schedule of Payments included in the agreement, this schedule was not aligned with the prices set for the contractor's work in the BOQ. Consequently, this has allowed for advance payments for uncompleted work by the contractor.
The audit report also uncovers several other instances of mismanagement by PSM in handling this project.
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