ADK Chairman Defends Land Lease and Raises Concerns Over Gov’t Debts
Chairman of ADK Hospital Group, Ahmed Nashid defended the company’s land lease amid below-market rate criticisms and expressed concerns over the hospital’s financial stability due to millions in unpaid government dues.
https://x.com/mvpeoplesmajlis/status/1823319506946531776
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Nashid’s remarks were made during yesterday’s Public Accounts Committee meeting in Parliament, where ADK’s management was summoned to provide details on a matter raised by the company. The discussion focused on the escalating unpaid Aasandha fees owed by the government, which now total over MVR 251 million, placing significant financial strain on the hospital.
Nashid explained that while the committee does not typically intervene in private company debts, the issue was brought to its attention due to its implications for public interest. He revealed that when ADK first wrote to the Public Accounts Committee in October 2023, the state owed MVR 166 million. By December, this amount had increased to over MVR 200 million.
He warned that if the current situation continues, the government’s debt to the hospital could reach MVR 400 million by next year. He highlighted that the state pays MVR 25 million per month towards these outstanding fees, but the monthly expenses incurred by the government at ADK exceed MVR 40 million, leaving the hospital struggling to cover its operational costs, which amount to MVR 45 million per month.
Nashid expressed concern over the hospital’s ability to meet its financial obligations, including payments to suppliers and banks. Procuring essential supplies for the hospital has become increasingly difficult, and the company has had to rely on funds from other businesses within the ADK Group, such as resorts, to ensure uninterrupted services.
The situation has been further exacerbated by HSBC Bank’s decision to cease operations in the Maldives in October. ADK had taken loans from the bank to manage the gap created by the government’s non-payment, but now faces pressure to settle these dues before the bank’s departure. Nashid disclosed that the company currently owes MVR 150 million in loans, with an additional MVR 17 million due in interest.
The hospital’s strained relationships with suppliers have also led to the suspension of credit facilities by some suppliers of life-saving drugs, raising concerns about the potential impact on patient care. Nashid emphasised the gravity of the situation, warning that the hospital may have to discontinue some doctors and services if the issue is not resolved.
ADK has proposed that the government increase its monthly payments to over MVR 25 million to cover the hospital’s operational costs. Nashid suggested that without a resolution, the hospital may be forced to stop offering Aasandha services, which would have serious consequences for the country’s healthcare system.
Addressing the criticism over the land lease, Nashid defended the current agreement, stating that the hospital pays MVR 8.2 million annually for the land, which equates to USD 92 per square metre. He argued that this rate is significantly higher than what resorts pay for land, despite tourism being a major revenue generator for the country. Nashid pointed out that if ADK were to pay the same rate as a recently sold plot of land to another private hospital, it could have purchased the land outright within four years.
He also noted that ADK contributes MVR 80 million annually in government taxes and fees, suggesting that the hospital’s financial contributions extend beyond the lease payments.
