The Office of the President-elect has identified significant financial issues with utility companies, which have a combined debt of USD584 million.
The transitional committees have compiled reports on 77 state institutions, including the utility companies. They are Fenaka Corporation Limited, Waste Management Corporation Limited (WAMCO), State Electric Company Limited (STELCO), and Male' Water and Sewerage Company Private Limited (MWSC). The President-elect's Office divulged details of the reports, including the current debt of the companies, the weak financial and administration operations, and the burden on the state due to the policies of the central government.
At a press conference, Spokesperson Mohamed Firuzul said that the President-elect's office is most concerned about the operations and debt situation of Fenaka, which is the main company that provides electricity, water, and sewerage services in the atolls. He noted that the total debt of Fenaka reaches USD266 million, of which USD208 million are payments owed to suppliers and companies, while USD58 million are unpaid loans. He highlighted that Fenaka is yet to pay 1,149 companies for their services and that the debt incurred due to over a year of non-payment to companies reaches USD62 million.
Additionally, Spokesperson Firuzul highlighted that concerning rise in the number of employees at Fenaka. He noted that the company had 2,756 employees at the end of 2018, which has now increased to 8,126, with a total of 747 workers hired since March alone. This has led to the cost of paying salaries increasing from USD1.5 million to USD5.3 million. He also said that Fenaka has failed to maintain the standard for approving the budget, as USD104 million of the budget approved for 2022 was deficit debt while USD62 million was earmarked for debt repayment in 2023. However, Fenaka did not implement any debt repayment strategies and the company's policies related to hiring employees and conducting projects have led to a further increase in debt.
Furthermore, Firuzul said that Fenaka has continued to take loans at high interest rates, which increased debt and worsened its financial burden, leading to the government spending USD32 million on Fenaka every year. He also said the company did not complete its 2022 financial statement audit and has not shared its 2023 financial statement with the transitional committees.
Speaking on STELCO, Firuzul said the company's debt stands at USD240 million, adding that it is a profitable company in an adequate financial position. He added that the company has to repay USD12 million in debt in 2024 and has also significantly increased its workforce, from 928 to 1,688 employees since 2018, with 400 employees hired this year and 42 hired after the presidential election.
Regarding MWSC, Firuzul said that the company has USD91 million in debt, of which USD8.9 million is owed to suppliers, USD53 million is owed to creditors, and USD32 million is unpaid loans. He also said that WAMCO has USD15 million in debt and that the government has to provide assistance to the company due to its worsening financial situation. The President-elect's Office has begun formulating plans to restructure the companies after evaluating the reports.