Kolhufushi Council Leased 12 Plots To Ineligible Bidders, Audit Finds

The Kolhufushi Council leased 12 plots of land to bidders who did not meet mandatory eligibility requirements for a 2024 guesthouse development tender, according to a compliance audit by the Auditor General’s Office.

The council leased the 12 plots, each measuring 5,000 square feet for 50 years. According to the audit report, the tender required a minimum investment of MVR 12.5 million per plot, with bidders required to demonstrate equity or capital equivalent to 20 per cent of the proposed investment.

The AGO said the Public Finance Regulations require bids to be evaluated strictly against the criteria set out in the relevant bid information document.

Two parties submitted bids for the 12 plots. However, the audit found that neither bidder met the mandatory eligibility requirements, while the council proceeded to award the leases to both parties.

One bidder was awarded two plots. The financial documentation submitted by the bidder showed available funds of MVR 112,282. The audit found that this was below the required capital of MVR 5 million and therefore did not meet the tender requirements.

The second bidder was awarded 10 plots and submitted documentation showing access to a USD 20 million credit facility as evidence of financial capacity. According to the audit, however, a credit facility could not be treated as the bidder’s personal equity or capital under the tender requirements, making the bidder ineligible.

The audit also examined progress on the 12 leased plots. The party awarded two plots that had begun construction of a guesthouse, according to the report.

The council told auditors that, as of 12 July 2026, the party awarded the remaining 10 plots had not completed several mandatory prerequisites. These included land surveys, sand analysis, water quality and utility assessments, guesthouse architectural drawings, outlet and public-area designs, and Environmental Impact Assessments.

The audit found that the council had not taken enforcement action against either party despite both failing to fulfil their contractual obligations.

The AGO instructed Kolhufushi Council to monitor progress on the leased plots and take appropriate enforcement action where necessary.

It also said that leasing land to parties who did not meet the eligibility requirements was contrary to the Public Finance Act.

The council was instructed to investigate the matter and take action against responsible individuals in accordance with the law if negligence or wrongdoing is established.