MTCC's new management paints bleak picture

Maldives Transport and Contracting Company (MTCC) was described by the previous government as one of the most profitable and well-run government companies. The annual reports also showed large profit figures. The unprecedented profits in recent years have also changed the public perception of MTCC and the belief that the company is on the upswing became widespread.

However, at Wednesday's press conference held to publicise the state of affairs of the company when the new management took over, and list its efforts to overcome the situation, proved to be the opposite of what everyone had believed.

"It's been portrayed in the media as a very good and efficient company. But in reality it's been facing a lot of challenges and problems," said Abdullah Ziyadh, who took over as CEO three months ago.

"... The financial situation is very poor. The running costs are high. Many project sites are idle and costs are being borne very heavily. There is negligence in the management of company assets, especially the condition of the Maha Jarraafu. "

He also said that administrative matters were disrupted to such an extent that the pace of projects was slowed down and policies have been implemented within the company that would be detrimental to itself.

Everything he said showed that the 'people's company' was in great trouble.

MTCC Chief Financial Officer (CFO) Hussain Mohammed Manik highlighted the current financial situation of the company at the press conference. He read out some statistics:

This is the state of the company that posted revenue of MVR 3.24 billion last year. When the figures were analysed, the company's profits showed a steep decline at the end of last year. The company posted an operating profit of MVR 43 million in the last quarter of last year. This is a 58% decline compared to the operating profit of MVR 103 million in the third quarter.

According to current senior officials, the reason behind MTCC's fall is the damage to its most valuable assets, the leases made, and the implementation of policies in a manner that is detrimental to the company.

However, MTCC has always received a large amount of money from the government. The company relies heavily on government projects. Adam Azim, who has been the managing director of MTCC for the past five years, and is now the Male City Mayor, has mentioned this several times before.

During the former government, projects worth billions of rufiyaa were carried out by handing it over to MTCC. 

The new management also talked about MTCC's largest dredger Mahaa Jarraafu on Wednesday. Even in the previous government, MTCC described it as a financial loss as the dredger could not be used. The previous management carried out repairs by sending the vessel to the UAE even.

"There are five dredgers in the MTCC dredging fleet. When I took over here, only one was mobilised and working," he said. 

That had happened because, according to the CEO, the vessel had been neglected during use and maintenance since it was brought.

The Mahaa Jarraafu was at that time described as one of the best investments made by MTCC during the administration of former President Abdulla Yameen.

"Every machinery will have a lot of maintenance from the time it is used for; the resting period it needs, regular fuel change. Due to the lack of proper adherence to the procedure, there were a lot of issues coming up, one after the other," Ziyadh said.

MTCC's dredging fleet accounts for one-third of its revenue. MTCC Chief Projects Management Officer Ahmed Latheef said the company's profits have been severely reduced due to the lack of use of the most important vessel in its dredging fleet, The Mahaa Jarraafu.

Latheef also spoke about MTCC's international logistics fleet. According to him:

Without barges, goods cannot be transported from one island to another, CEO Ziyadh said, adding that projects run using only two barges are carried out with many challenges. The fleet is so small that logistics are disrupted and the pace of projects is extremely slow.

“We are most confident that if we can add our moving assets; a few barges and a few landing craft, the speed we are going at now will become much faster,” he estimated, adding that the speed could be doubled then.

He said he sees progress in talking to financial institutions to take out a loan to expand the fleet. MTCC aims to procure a few more barges. The management hopes to repair the salvageable ones.

Azim has always said that he has taken over MTCC and made it a profitable company under his leadership. Azim used the line as one of the biggest reasons to vote for him in the mayoral election.

However, for the current MTCC executives, things had not been well under Azim’s leadership. The projects, the administration and the way the money was spent were wrong. Latheef pointed out:

In addition, he said projects were implemented in the previous government without obtaining permission from the relevant authorities.

“The previous management of MTCC has completed about 15 projects without obtaining the permission of the relevant authorities”.

The current team is working to get permission from the relevant authorities. In addition to working without permission, they also noted that the company has been harmed in acquiring machinery for the work.

"The former management had leased barges for their incomplete works. They kept renewing the lease on the barge and kept it up for several years, until the original cost of the barge had been covered with the lease price only," Ziyadh said.

He said the current team will continue to work on learning from such mistakes that have been made, and have been detrimental to the company in the past term.

One of the things that MTCC officials have been repeatedly saying now is that they have started working to find solutions to the issues that have been identified. He also did provide details of some of the work being done.

According to the CEO, some of the top priorities while addressing the major issues are:

“We want to diversify into private projects and generate income in dollars from private projects,” he said.

That way, we will get the dollars needed to buy goods and materials sustainably, reduce costs and make it easier for MTCC to pay others," Manik said. Thus, he added:

"Our company has always been running government projects and we are managing the company with that money. We have abandoned that concept in our company now. We want to focus on other areas and make it a self-sufficient company," the CFO said.

He listed such strategies as further reclaiming more land from shallow lagoons across the country and leasing it out for tourism development and in the fisheries sector, for MTCC to invest.