“Have you seen the madness?": the 2026 budget and MVR 2.7 billion project giveaway

He shows me the speaker of parliament’s wife has been awarded a contract for 100 housing units. He shows me an island has received MVR 17 million (US$ 1.1 million) for a rostrum (a rostrum, mind you), while another island receives MVR 10 million less for exactly the same works. 

These are the government’s project awards under the 2026 state budget: MVR 2.7 billion worth of contracts distributed without competitive bidding.

I start reading the full list myself, joining what appears to be the entire nation in shaking my head in utter disbelief. Four million for a waste and resource management centre for Hirimaradhoo, an island undergoing planned depopulation. Kulhudhufushi with its 10,000 residents gets three million for infrastructure works, while an island with fewer than 700 residents gets 17 million for essentially the same scope. Dhaalu Meedhoo gets 38 million for 25 housing units while Meemu Mulah gets practically the same, but for 50 units. There wasn't even a semblance of technical logic, no attempt whatsoever to even pretend to make fiscal sense.

It’s not that we don’t expect such shenanigans from our governments; they’re par for the course in the country. But to not shake our heads to friends over Friday night conversations, to not vent to lovers over lunch, to not gossip to sisters at the gym, to not mutter to neighbours at every street corner, to not see this for the madness it is, you’d have to be comatose. 

The way the government has awarded these projects is wrong on almost every front: technical, fiscal, moral.

The government has amended the public finance regulation to permit direct award of projects without competitive bidding. The regulation does contain provisions for bypassing standard procurement in specific circumstances: national emergencies, national security issues, or works financed through foreign loans with specific terms. These are legitimate carve-outs for exceptional situations where standard procedures would be impractical or contrary to the public interest.

What the government has done is wholly inconsistent with this intent. It has taken provisions requiring good faith application and turned them on their head. These are 206 separate projects across housing, education, health, environment, sports, religious affairs, fisheries, homeland security, and youth empowerment, distributed among 53 private contractors. This is precisely the type of procurement that requires competitive bidding to ensure value for money, assess contractor capacity, and maintain fiscal discipline.

Contractors receive 15 per cent advance payments without providing performance guarantees or bonds. Performance bonds exist to provide recourse when contractors abandon projects or fail to meet specifications. Without them, advance payments become gifts rather than working capital. Without competition, there is no benchmark for reasonable pricing. Some awarded companies are not registered as contractors. Others are reportedly inactive. Some are clearly paper companies. The regulation explicitly requires pre-award assessment of financial and technical capacity. These assessments were most certainly not conducted.

The minister of finance has repeatedly invoked the term "contractor financing." The entire premise of contractor financing is that the private sector entity assumes the financing risk, arranges its own capital, and recovers costs. What has instead been structured here is government-guaranteed financing through Bank of Maldives at nine per cent interest, with the state assuming liability for defaults. 

This is not contractor financing by any definition. This is cronyism.

The financial exposure to Bank of Maldives too is substantial. The bank has extended MVR 2.7 billion in loans at nine per cent interest to 53 companies, the majority of which lack demonstrated capacity or even basic registration requirements. Quite simply, the Bank of Maldives’ balance sheet takes a massive hit when the loans go bad (and they are very likely to; the country knows the track record of PSIP projects awarded just for political favours: headlines are still emerging of a MVR 44 million project given to a former MP, another for MVR 48 million, and so on).

Internationally, the implications are equally damaging. The country cannot afford further reputational fallout. With credit ratings under steady decline from Moody's and Fitch, with World Bank and IMF outlook far from rosy, with the economy's heavy dependence on foreign investment, and the government's current ambitious efforts to attract offshore financing hubs and diversify partnerships, instability at the country's largest financial institution sends precisely the wrong signal to creditors and investors.

For a debt-ridden country, this is reckless behaviour. This kind of financial bad behaviour deters the very creditors the country needs. Bilateral lenders and private bondholders considering debt restructuring or loan rollovers look for fiscal discipline and commitment to reform. When the country finds new ways to misbehave financially, it squanders regional and international goodwill. No creditor will extend favourable terms to a government actively inventing new methods of fiscal irresponsibility. With domestic debt on a steady increase and largest chunk of debt repayments due in 2026, the country is burning through goodwill at precisely the moment it can least afford to.

This isn’t just fiscal mismanagement. This is the systematic destruction of trust in the system. The message to the many women and men and young people hustling every day is brutal: hard work is for suckers. The system is rigged, and no amount of effort will change that. Study hard, build skills whilst contracts go to cronies. Work honestly whilst corruption pays better. 

But this is just what the people have systematically rejected with each consecutive presidential election: jobs for loyalty, loyalty over merit, the wastage, the corruption. They have voted out every incumbent government accused of the same. These 2026 budgeted projects are likely nothing more than a scam to finance the approaching local council elections. The lesson keeps getting ignored. President Muizzu would do well to remember: Maldivians shake their heads to friends, they vent to lovers, they gossip with their sisters, they mutter to neighbours, and then they go out and vote out governments who mistake their patience for acceptance.

Eva Abdulla is a former deputy speaker of parliament and three-term lawmaker who represented the Galolhu North constituency in Malé.