Auditor General Hassan Ziyath has ordered to withhold the compensation amounts to be paid by the state to Dheebaja Investment Private Limited.
The auditor general issued the order following a special audit conducted on the project to establish a ferry service in the Northern Province in 2011, which had been contracted to Dheebaja. Following the termination of the contract in 2013, Dheebaja filed a lawsuit and won the case against the state, with the Civil Court ordering a compensation amount of USD 22.56 million.
The audit report stated the contract was terminated by the government after Dheebaja failed to provide the ferry services in accordance to the contract. It further said the company was given multiple durations to resume the services but had failed to do so, providing the government the right to terminate the agreement in accordance to the Request for Proposal (RFP) developed for the project.
The audit report also highlighted the lease of Kudakurathu, Raa Atoll to Dheebaja as part of the agreement, in order to subsidise the ferry services in the North Province. The audit report stated the agreement stipulated Dheebaja to hand over the island to the government upon the termination of the agreement. Noting the island had been sub-leased to another party when the agreement was terminated, the audit report stated the sub-lease party has been turned to the head-lease as per the agreement.
Speaking at the Parliamentary Committee on Public Accounts, Auditor General Ziyath said the government had acted in accordance with the contract signed with Dheebaja, although the company had been violating the contract since the beginning of the ferry services. He noted the contract clearly states it can be terminated if the ferry services are suspended for 5 days, adding the government was within its right to terminate the contract.
The auditor general also noted Dheebaja was asked to provide details of any investments made by the company under the agreement. However, he said no details of any investments were provided by the company, while the document prepared to seek compensation also did not include any revenue or expenses from operating the ferry services. Therefore, he said Dheebaja has not incurred any losses which need to be compensated by the state.
The settlement committee formed by President Ibrahim Mohamed Solih had decided to settle the Dheebaja case outside the court and agreed a compensation amount of USD 11.28 million, instead of the USD 22.56 million ordered by the Civil Court. Minister of Finance Ibrahim Ameer said no compensation amounts have yet been paid to Dheebaja.