MIFCO bought Funaddu for MVR 22.8m; no funds to develop
"Once we get the money, the company is ready to start operations there. However, we do not know the exact date or time frame when the funds will be disbursed,".
By
Ahmed Naif
It has been revealed that the Fisheries Ministry bought Th. Funaddu fish processing factory for MVR 22.8 million after the Bank of Maldives (BML) put the island for auction through foreclosure. However, there is no clarity on whether MIFCO will be able to rebuild the fish processing factory on the island and start operations.
BML announced the sale of Funaddu without paying for a loan taken by a company owned by former DRP leader Ahmed Thasmeen Ali.
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When Funaddu was bought by the government and handed over to MIFCO, the island was badly damaged
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The Fisheries Ministry had earlier said it was seeking USD 10.2 million (MVR 157.3 million) from MIFCO to start operations on the island.
In response to the committee's letter to MIFCO to a complaint filed by Thimarafushi MP Abdulla Riyaz to the Parliament's State Owned Enterprises (SOE) Committee to investigate whether MIFCO had done enough to open Funaddu.
In response, MIFCO said:
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MVR 236 million needs to be invested to renovate Funaddu and start buying fish
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MIFCO is already a loss-making company and the company does not have the money to make such a huge investment
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The timeline on how to raise the money is yet to be agreed
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MVR 22.83 million was spent to purchase the island from the bank
"Once we get the money, the company is ready to start operations there. However, we do not know the exact date or time frame when the funds will be disbursed," MIFCO said in a statement.
According to MIFCO, the ownership of the island has not yet been transferred to the company as it has accruements to be paid by the caretaker of the island in the past so that it can be legally settled. However, they are being arranged and the ownership of the island is now being transferred to MIFCO, the public company said in a statement.
"Though the ownership of the island has not changed yet, the material and the island is now under the company's control," the letter said.
According to MIFCO, the main cost of renovating Funaddu is to repair the harbour and bring it to a level where it can weigh the fish. MIFCO has estimated the cost of this to be MVR 146 million. MIFCO's letter states:
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We have now held discussions with the finance ministry on whether the port can be repaired under the government's PSIP budget
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The decision of the finance ministry in this regard is yet to be heard
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Then out of the cost of repair, MVR 90 million is being spent on repairing the plant set up in the island and procuring other machinery
"If funds are received for the project and it is started, it will be a great relief for the fishermen in the area," MIFCO said in the letter.
The members who expressed their views in the committee on Tuesday pointed out that though MIFCO had purchased Funaddu, the project was not feasible for the company. Some members even questioned the decision when the company took over such a huge amount without the financial capability.
However, after discussion, the members decided to inform Riyaz about MIFCO’s actions to bring Funaddu into operation and not proceed further and file it in the committee.
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