Auditor General Hussain Niyazi has warned that Housing Development Corporation (HDC) would incur huge financial damages if it were unable to pay back the loans taken for the development of the Hiya housing scheme. He made the statement during a meeting between the Auditor General’s Office (AGO) and the Parliamentary Committee on Public Accounts.
At the meeting, Auditor General Niyazi said HDC has taken USD700 million in loans and that USD389 million were for the Hiya housing project. He added that HDC has defaulted on 30% of the loans for the Hiya housing project and that the corporation needs to take special priority in financing its projects and managing the Hiya project.
HDC had handed over the development of the Hiya housing project to the contractor that proposed the highest expenses. Five companies submitted proposals for the Hiyaa housing project, which was launched by the administration of former President Abdulla Yameen. The chosen company had proposed to complete the project at a cost of USD62,000 per housing unit. The company with the second-highest proposed expenses had proposed USD10,000 less per housing unit and the other companies proposed expenses in the range between USD50,000 and USD52,000. The proposed expenses result in USD105 per sqft, which is more expensive than more costly housing projects which cost USD77 per sqft.
China State Construction Engineering Corporation Limited was chosen to complete the development of 7,000 housing units as part of the Hiyaa housing project. The project was not completed to the standards and the loans taken to complete the project were beyond the commercial rate, the government has stated.
Furthermore, the AGO conducted an audit after HDC requested to review the prices of the housing units set by Yameen's administration. The audit has revealed the lowered prices of the flats in the Hiyaa housing project set by the previous government were economically unfeasible. The report stated a debt of USD583 million would be incurred in net cash flow in a 25-year period if the Hiya housing units were leased at the prices set by the previous government.
HDC began collecting rent and maintenance fees for the flats on April 1, after postponing rent collection three times. The government has allocated USD504 as monthly rent for Hiya housing units, with an additional USD64 as a maintenance fee every month.