Zariyand urges review of finance rules over state project awards
He further stated that some large projects had been awarded to companies that did not meet the required classification standards.
Long-serving finance professional Ismail Zariyand on Tuesday said that 206 state projects had been awarded to private companies in a manner that, in his view, meets the definition of state-planned corruption, and urged President Mohamed Muizzu to review recent amendments to the Finance Rules.
Zariyand made the remarks during President Muizzu’s meeting with residents of Galolhu, where he addressed changes made to the Finance Rules over the past two years and the procedures used in awarding state projects.
Zariyand, who served on the Finance Rules Committee for 15 years, said the Finance Act and the Fiscal Responsibility Act require governments to plan and implement policies in a way that does not place a burden on future generations.
He said that during his time on the committee between 2002 and 2017, this principle was maintained regardless of the administration in power.
Under the Finance Rules, Zariyand said that even when projects are directly awarded, three key factors are assessed: the financial capacity of the company, whether the company is capable of carrying out the assigned work, and whether the award protects the state from financial loss.
He said the amendment made to Rule 10.22 in December 2023 was appropriate, but noted that the Finance Rules had been amended four times and that a further amendment in October removed key safeguards.
According to Zariyand, the provision removed in October outlined circumstances under which companies submitting proposals could be disqualified from receiving state contracts. He said that following the repeal of this provision, contracts worth MVR 2.7 billion were awarded to 53 companies at a public event held in mid-October.
Zariyand said he had reviewed the registration status of those companies and found that around 10 were in the process of winding up or had ceased operations. He also noted that construction companies awarded projects should be classified and rated in the contract register.
He further stated that some large projects had been awarded to companies that did not meet the required classification standards.
Calling on the President to review the amendment to Rule 10.22, Zariyand said the current approach increases the risk of financial loss to the state. He added that the situation aligns with definitions of planned corruption outlined by the United Nations Office on Drugs and Crime.
Zariyand said repeated amendments to the Finance Rules have weakened accountability mechanisms and that some companies recently awarded projects are scheduled for liquidation.
He noted that banks provide loans to companies to carry out state projects and warned that if loans are not recovered or funds are lost, the state ultimately bears responsibility.
Zariyand said public debt is projected to reach MVR 160 billion by the end of 2026 and urged reforms to safeguard public finances for future generations.
