Audit highlights mismanagement, financial losses at MITDC
MITDC has received MVR 64.4 million from the state budget since its inception in 2016.
Auditor General’s special audit report on the Maldives Integrated Tourism Development Corporation (MITDC) has revealed significant issues in project implementation and financial management. Established to promote tourism in the Maldives, MITDC has failed to complete any of its projects, resulting in the wastage of millions of MVR allocated by the government.
According to the report, MITDC has received MVR 64.4 million from the state budget since its inception in 2016. Additionally, the government issued a $1 million loan to the corporation at an 8% interest rate, repayable within a year. However, the audit revealed that no repayment has been made, and there is no record of plans for repayment.
MITDC has incurred a cumulative loss of MVR 164.2 million over the last seven years. The report highlighted that MVR 52.4 million had been spent on three projects, all of which remain incomplete.
Summary of Key Projects
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L. Baresdhoo Integrated Resort Island (MVR 22 million): MITDC awarded a $22.8 million contract to Jausa Construction to develop guesthouses, hotels, restaurants, and other facilities. An advance payment of $975,000 (approximately MVR 15 million) was made to the contractor without obtaining the required $910,000 performance guarantee stipulated in the agreement. The audit found that no construction work had been carried out, and the advance payment has not been recovered.
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K. Kaashidhoo Tourist Village (MVR 26.7 million): MITDC initiated this project to build a 54-bed tourist facility and other infrastructure. A contract was awarded to Ningbo DeepBlue Smarthouse Corporation, with 33% of the work completed by the scheduled deadline in November 2018. However, 52% of the budget for the first phase had already been spent, and the project stalled due to a lack of additional funds. The audit found that the project began without a signed land agreement and without securing necessary funding.
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Project Palm (MVR 3.6 million): This project involved a feasibility study conducted by a Singaporean company for the development of three islands in the Kaafu Atoll. The project was halted due to unpaid acquisition fees. The audit revealed that the project commenced without proper financial planning or a mechanism to secure required funds.
Financial Challenges
The audit reported that MITDC has accumulated MVR 137.9 million in short-term debt, while its total capital stands at MVR 3.1 million, rendering it incapable of meeting its obligations.
Key debts include:
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Refunds owed to individuals for the Baresdhoo project: MVR 55.3 million
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Amount repayable as of October 2024: MVR 18.1 million
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Outstanding debts: MVR 36.1 million
The report noted that MITDC lacks a plan to repay these amounts, leaving the government responsible for covering the corporation’s financial liabilities.
Recommendations
The Auditor General’s report concluded that MITDC is not sustainable in its current state, given its inability to complete projects or generate revenue. The report recommended urgent measures to address the corporation’s financial and operational shortcomings.
“None of the projects undertaken by MITDC have been completed, and there are no expectations of revenue generation in the near future. The corporation is not considered sustainable,” the report stated.
