Audit reveals missing docs in POLCO flats over server failure
MVR 1.06 billion has been spent on the project.
Key documents related to the POLCO Flat project have been lost due to a server issue, according to Auditor General Hussain Niyazi.
An audit report released last month by the Auditor General's Office highlighted multiple allegations of fraud in the Blues Housing Project. The project, awarded to the Police Cooperative Society (POLCO) in 2013 to support police welfare, has undergone contractor changes, cost escalations, and delays.
At a Parliament Finance Committee meeting on Monday, Hanimaadhoo MP Abdul Ghafoor Moosa questioned whether POLCO was aware that the project had been reassigned to two companies operated by the same individuals.
Niyazi confirmed that the audit covered the project's bidding process but noted that many documents were unavailable. POLCO management stated that a server issue had resulted in the loss of key records.
Without access to these documents, auditors were unable to determine how the bidding and evaluation processes were conducted. The project was not publicly announced in the government gazette, raising further concerns about transparency.
Blues Housing Project Timeline:
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19 June 2013: The project was awarded to Noomadi to construct three 13-storey towers with 300 housing units for MVR 580.2 million, with completion expected in two years.
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November 2013: The agreement was amended to include a 20% upfront payment.
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January 2016: The contract with Noomadi was cancelled due to non-performance. Of the MVR 96.3 million paid, POLCO had recovered MVR 20.1 million, while the penalty fee imposed was MVR 1.4 million.
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March 2016: The project was reassigned to Island Expert for MVR 628 million to build 361 units in 14 months.
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March 2016 - October 2019: The contract was amended three times, increasing costs by MVR 122.2 million and extending the deadline to 54 months.
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January 2021: The contract with Island Expert was terminated due to incomplete work. POLCO had paid MVR 633 million, including payments to subcontractors, but a quantity survey estimated the completed work to be worth MVR 448.2 million.
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September 2023: A new agreement was made with Island Expert and Ensis Pty Ltd, under which Island Expert owed POLCO MVR 42.6 million out of MVR 129.5 million. Ensis committed to repaying MVR 100,000 in 57 instalments, with no liability placed on Island Expert if payments were not made.
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December 2021: The project was transferred to the government, which awarded a new contract to Amin Construction for MVR 274 million. Additional work was assigned to Decomas, Hao, and MTCC.
The audit found that the original contract was awarded without a bidding process, and the company’s financial and technical capacity was not assessed. The lack of competitive evaluation led to project delays, cost overruns, and additional reassignments.
Audit Findings:
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MVR 1.06 billion has been spent on the project.
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The average construction cost per hectare was MVR 1,851, exceeding the standard rate of MVR 1,300 per hecatre.
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Based on standard rates, the total project cost should have been between MVR 745 million and MVR 859.9 million.
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Over MVR 600 million of the total expenditure was circulated through private companies.
The audit report highlighted concerns regarding financial management, transparency, and accountability in the project.
