Audit Flags Millions of MVR in Financial Losses, Project Failures in State Submarine Cable Initiative

A compliance audit by the Auditor General’s Office has identified financial losses and management failures in the implementation of the state-backed submarine cable project, including asset impairment, additional costs and delays in putting the infrastructure into operation.

The audit found that shortcomings by government institutions and state-owned entities in fulfilling contractual and operational obligations contributed to delays, unpaid liabilities and losses associated with project assets.

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The report identified several areas of concern, including expenditure on subsea fibre-optic infrastructure that remained underutilised or non-functional because of delays in connecting it to terrestrial networks. It also found that late payments to international vendors resulted in interest and other additional costs.

The audit further identified duplicated administrative costs and unallocated operational expenses, citing inadequate coordination between the Ministry of Environment, Climate Change and Technology and state-owned infrastructure entities.

According to the Auditor General’s findings, inadequate feasibility assessments and financial oversight before major stages of the project contributed to cost increases and affected the project’s intended broadband expansion.

The submarine cable project was developed by state-owned Ocean Connect Maldives (OCM), a subsidiary of the Maldives Fund Management Corporation (MFMC). OCM signed a USD 22.5 million agreement with Reliance Jio in 2022 to connect the Maldives to the India-Asia-Xpress (IAX) submarine cable system. The cable landed at OCM’s Hulhumalé site in August 2023.

The government later decided in August 2024 to continue the OCM project and finance USD 2.92 million owed as equity to resume loan disbursements. The government also provided a sovereign guarantee for MVR 231 million in loans linked to the project.

OCM was established in 2022 to invest in digital infrastructure and provide international gateway access, with the IAX project intended to strengthen the country’s connectivity and reduce internet costs.

The AGO’s website lists OCM’s 2023 audit as having been completed by the Auditor General’s Office on 20 July 2026.