Anti-graft watchdog prompts criticism for ruling out corruption in biggest ever property deal

Anti-graft watchdog prompts criticism for ruling out corruption in biggest ever property deal
December 13 17:21 2016

The anti-graft watchdog has come under fire for declaring legal the government’s choice of a contractor to build a new wing for Malé’s public hospital, a project worth MVR2.1billion (US$140million).

The cabinet’s economic and youth council was accused of graft in March when it chose Singapore’s Chang Hua Construction Pvt Ltd for one of the largest property deals in Maldivian history without a competitive bidding process.

The Anti Corruption Commission on December 5 approved the choice stating that amendments brought to public finance regulations allowed the government to award major projects without an open bid.

The ACC did not comment on how Chang Hua was invited to submit a proposal in the first place.

Anti-corruption campaigners have slammed the ACC’s findings, saying that legal changes cannot be used to exclude the possibility of corruption.

Transparency Maldives, an anti-graft group, said the ACC’s findings were of concern, as it had omitted its own concerns over the amendments brought to the public finance regulations in 2015.

“The ACC should have mentioned that this amendment, like they had earlier said publicly, is one that will easily lead to corruption,” said Mohamed Thoriq Hamid, a project manager at Transparency Maldives.

“Changing the law or the regulation allowed this to happen. That cannot be used to definitively say that corruption did not take place, especially since these ‘mega-projects’ are very expensive projects involving a lot of public money,” he added.

In its findings, the ACC said President Abdulla Yameen had given “special permission” for the construction of a new 25-storey wing for Indira Gandhi Memorial Hospital.

A total of three companies had expressed interest; two Singaporean and one Chinese company. Only two responded to an invitation for further discussions.

“Among these two companies, it was found that the Chinese company lacked experience in the field of constructing medical facilities and had only submitted a preliminary price,” the ACC said in a statement in English. The preliminary design by Chang Hua was “found to be a lot more professionally appealing.”

The price tag of US$140million it proposed was closest to the price estimated by the health ministry’s technical team at US$134million, the ACC said.

It was the IGMH’s governing board that chose Chang Hua, the ACC said. The economic and youth council approved the project. The council decided that the price was reasonable as Chang Hua had proposed selecting a third party for “the architecture and planning” and a ten-year master plan for the building.

“Moreover, the Singaporean company is obliged to make large investments in acquiring the necessary materials and capital to execute the project and is also required to use separate electrical wirings for each floor, which further justifies the need to allocate a high price for the particular project,” the ACC said of the deliberations held by the ministers.

“Consequently, as it was agreed upon that $140,000,000 is an appropriate price for this project and as the Singaporean Company is believed to be a highly capable company in successfully completing the project within the allocated time span, it was concluded by the president’s office to assign this project to the Singaporean company for the price of $140,000,000.”

The case has now been closed “as there was no offence of corruption in the case,” the ACC said.

Responding to the ACC’s findings, the main opposition Maldivian Democratic Party meanwhile said the report raised questions over the commission’s impartiality.

“Upon a change of government, we will review every one of these projects and rescind contracts awarded through corruption and favouritism,” said Ibrahim Ameer, the chair of the party’s economic committee.