Audit: MVR 23.2M Excess Paid to UMET in Compensation for Kurendhoo Harbour

An audit has revealed that the government overpaid MVR 23.2 million to UMET Investment Pvt Ltd as compensation for the Lh. Kurendhoo Harbour project, despite clear court rulings that no such compensation was legally due.
The audit, released by the Auditor General’s Office, stated that the Economic Council under President Ibrahim Mohamed Solih’s administration approved a payout of MVR 26 million to UMET after the contract for the project was terminated. However, auditors found that only MVR 2.8 million was payable, resulting in an excess payment of MVR 23.2 million.
The Kurendhoo Harbour project was initially contracted to UMET for MVR 14.9 million through a joint venture agreement signed on January 27, 2011, by the government-owned Works Corporation Limited. The contract’s value was later increased to MVR 21.1 million in October 2011. The government terminated the contract on March 10, 2013, because UMET failed to complete the work as required and was not compliant with the agreement terms, as confirmed by an assessment conducted by the Maldives Transport and Contracting Company (MTCC).
Later the project was awarded to MTCC on 18th March 2013. The work for this project, awarded by the Ministry of Housing and Infrastructure, was completed on 29th December 2017.
According to the audit, the payment was made despite a series of court rulings that went against UMET’s claims for compensation. The Civil Court had initially ruled that MVR 13.4 million should be paid to the company, but this was overturned by the High Court, which held that the contract had not been unlawfully terminated. The Supreme Court later upheld the High Court’s decision, stating that compensation was not warranted.
Auditors noted that the compensation awarded by the government was calculated based on projected revenue and work pause durations, without proper consideration of UMET’s obligation to mitigate losses caused by project delays.
The audit recommended that the state recover the MVR 23.2 million from UMET and conduct a thorough investigation to identify those responsible for the misuse of public funds. It also called for appropriate action to be taken against those involved in the decision to proceed with the compensation in violation of court rulings.

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