Compensation Money Budgeted for Next Year to be Four Times Higher than 2023

The Ministry of Finance has projected a substantial increase in expenditures concerning court judgments and settlements, estimating a total spending of MVR 397 million by the year’s end.

While the initial budget for compensation had been allocated for this year, subsequent revisions reflected in the latest supplementary budget and the forthcoming budget for the following year indicate a fourfold surge in anticipated expenditure by the finance ministry.

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Notably, the specific reasons for these drastic changes in the budgeted compensation amounts have not been clearly outlined in the budget book. Such details are traditionally absent in these budgetary documents.

Additional specifics about the expenditure remain undisclosed. However, the fiscal statement released by the finance ministry delineates the utilisation of the budgeted funds for the current year. Up until May, out of the allocated MVR 100 million, MVR 95.5 million has been disbursed as compensation to various stakeholders.

Of the disbursed compensation, a significant 96 per cent was attributed to a case involving the contractor responsible for the development of Maafaru Airport, Singaporean Tuff Infrastructure Pvt Ltd. A sum of MVR 92.5 million was paid by the state to resolve this case.

The remaining MVR 3 million was directed towards compliance with an Employment Tribunal ruling mandating the payment of unpaid special duty allowances to employees who had served in the Ministry of Housing and Infrastructure under the Civil Service Commission.

Criticism has been levelled at the government for disbursing substantial sums of money to private entities as compensation. Particularly, the Settlement Committee, responsible for determining compensation cases, has faced scrutiny. The committee operates under the oversight of the President’s Office and the Attorney General’s Office.

Various sources have revealed that the government has already dispensed MVR 1.7 billion in compensation over the past four years (2019-2022). With the projected outlay for this year, the cumulative figure is anticipated to surpass two billion.