#Maldives: More cases of corruption in #MDP Govt: Mrf 12 million funneled to MP Reeko Moosa on one project

#Maldives: The scale and range of corruption rampant in the administration of former President Mohamed Nasheed is only now being brought to light as the Auditor General reports on Nasheed's various Ministries and Government projects. In his report to the Parliament last November on a Harbor Project for Haa Dhaalu Kumundhoo, the Auditor General reported that the Nasheed Government had paid the contractor, Heavy Load Maldives, nearly 12 million Mrf in excess of the contracted amount of Mrf 10.3 million. Heavy Load Maldives is owned by MDP's Interim Chairman Reeko Moosa Maniku, MDP MP for Hulhu-Henveyru.

The Auditor General reported that, by giving various unsubstantiated reasons, Heavy Load had stopped work on the project from 12 June 2008 to 7 Februay 2009. However, within months of coming to power, the Nasheed Government had paid Heavy Load over Mrf 4.7 million for this period, calling it "idle time", although the delays were on the contractor's side. In this way, 46% of the original project cost was paid to Heavy Load without the company doing any work. Based on the correspondence between the Construction Ministry and Heavy Load, the Auditor General concluded that there was no valid justifiable basis for the Construction Ministry to determine that the company's non-working time was "idle time". The Auditor General also noted that the Construction Ministry, headed by another Nasheed faithful, Minister Mohamed Aslam, had also calculated the Mrf. 4.7 million payment amount using wrong rates.

Further payments were also wrongfully made to Heavy Load by making a nominal expansion of the project scope. The Audit Report notes that the President's Office itself had issued a directive in 15 July 2009, expanding the scope of the project and increasing the contract value and changing the terms of the contract, even though the company had not done any work on the project since June 2008. Based on this directive from the President, the Government had paid MDP Interim Chair MP Reeko Moosa and additional 8 million Mrf, all without any actual work done.

With this change in the Heavy Load contract brought by the President's Office, a contract which should have been completed in September 2008 was extended up to 26 January 2010. However, even by that date, Heavy Load had completed only 45% of the contract, yet been paid far in excess of this work. At this juncture, Construction Minister Aslam, without claiming liquidated damages for late completion as in the contract, further extended the contract for another 5 months.

The Construction Ministry had also paid an additional Mrf 5.2 million of state funds to procure materials for the project, which it had agreed in the "Amendment to the Contract" ordered by President Nasheed in July 2009.

Additionally, upon another directive by President Nasheed, the Maldivian Government had illegally provided Heavy Load with access to its US 50 million dollar loan facilty with the Indian Exim Bank executed through the State Bank of India. Some part of the material imported for the project was obtained through this facility, although the Government had paid Heavy Load Mrf 5 million as advance payment for the same material.

The final completed project (completed in 2 years and 7 months) resulted in more than double the contract value being paid for a substandard harbor. An engineering report by the Construction Ministry notes that the harbor is substandard, with the access channel being dangerous to vessels (pic), and the quay wall being much lower than design specifications resulting in an unsafe harbor due to waves breaking over the quay wall (pic).

MP Reeko Moosa has been implicated in far bigger scams than this, during the Nasheed Government. The biggest being the award of a massive contract to Heavy Load by Thilafushi Corporation, without a valid tender process. The MRf 323 million ($US21 million) project was awarded to Heavy Load Maldives in September 2010, with the work to begin in February 2011. The scheme was to involve the reclamation of 157 hectares of land over six months.

The ACC issued a stay order to stop the illegal contract, but was over ruled in court on appeal by the Thilafushi Corporation. However, it has since then found various illegal actions taken in handing the contract to Heavy Load. In May 2012, media reported that the PG’s office had filed cases against three former TCL board members in relation to the award of the reclamation project to Heavy Load.

Earlier media reported last month that the guarantee cheque from Heavy Load, worth 5 percent of the deal’s value, MRf 16.1 million (US$1 million), had expired. A spokesman from the Finance Ministry said that a new cheque was required but had not at that time been received, although the company had assured it would be done. On September 11, 2012, media reported that the case of the bounced cheque of MVR16.1 million issued by Heavy Load as guarantee to Thilafushi Corporation had been submitted to Police. A Police Media Official confirmed to media that this case was currently under investigation. TCL told media that Heavy Load had not tried to pay this money, despite the cheque having bounced over a month ago.

In another fraud case, in November 2011, the Civil Court ordered MP Reeko Moosa, MDP Interim Chairperson, to pay 2.9 million MRf to the Asian Branch of the American Company Caterpillar Financial Services. Caterpillar filed lawsuit against Reeko Moosa on 19th February 2007, when Heavyload Maldives had defaulted in repayment of a loan amounting to 700,000 US Dollars, that the company had issued to Heavyload. The guarantor to the loan was Reeko Moosa, and the lawsuit was filed to obtain the unpaid amount, amounting to 2,921,257 Maldivian Rufiyaa. The decision of the court made it incumbent upon Moosa to pay up the whole amount over a period of three months starting from today.

Additional cases of corruption and embezzlement of state funds have been reported by the Auditor General and are being investigated by the Parliament's Finance Committee. Parliament's Finance Committee told media last week that the Auditor General had reported over 55 million MRF state funds had been given by former President Mohamed Nasheed's government to various parties without receiving any services or goods in return for the payment. The three cases totalling over 55 million MRF involved high ranking officials of Nasheed's party, Maldivian Democratic Party (MDP).

One case involved Mrf 12.7 million paid by the Health Ministry to a company called F-Tech Solutions to supply medical supplies. F-Tech Solutions was owned by high ranking MDP officials, one of its Director's and Human Resources Officer being a Ms. Fathimath Shiuna (aka "Prepaid Shiuna), a leading MDP activist working closely with Nasheed. "Prepaid" Shiuna is reported to be Nasheed's personal secretary.

An even closer example is the multimillion dollar contract given to his family company Renewable Energy Maldives to provide 6 islands with solar power, (see RN January 2012 report Renewable Energy Maldives: President Nasheed's gift for elder brother Naashid). The family company's CEO is Nasheed's elder brother Naashid, who until Renewable Energy was set up to take the STELCO contracts worked with Nasheed in their other family business Dhivehi Meysthiri. In addition to the STELCO project, Renewable Energy Maldives has landed other projects to supply solar panels and other renewable energy products to government agencies and companies.

The litany of corruption carried out by MDP leaders being reported by the Audit Office and the Anti-Corruption Commission continues. Most Audit and ACC reports recommend legal action against the individuals involved in defrauding and embezzling from the State. However, few cases have been brought before the courts.