In a stark revelation, the Maldives Transport and Contracting Company (MTCC) has exposed the precarious financial condition it inherited from the previous administration. The state-owned enterprise, once touted as a success story, is now burdened with MVR 954 million in debt while facing a staggering MVR 1.7 billion in outstanding receivables.
MTCC’s CEO, Abdulla Ziyad, pulled no punches in blaming the previous management for the company’s woes. “Management costs are very high,” he declared. “This is a situation where a large number of sites are idle, and we have to bear a lot of costs.” Ziyad further cited negligence in asset management and a damaged ‘Maha Jarraaf’ hopper dredger as key issues hindering operations.
Allegations of mismanagement were highlighted by the revelation that several projects initiated by the former leadership had ground to a halt, forcing the new team to scramble to identify root causes and implement urgent solutions.
The company’s financial woes were laid bare by CFO Hussain Mohamed Manik, who detailed MVR 1.7 billion in owed payments, a significant portion of which (approximately MVR 800 million) is due from the government itself. MTCC’s own debt stands at MVR 954 million, with half of that owed to foreign entities.
“Company borrowings (loans) stand at 100 million,” Manik added, highlighting MTCC’s reliance on debt financing. He outlined a strategic shift towards private projects aimed at earning dollars, a move designed to ease the company’s debt burden and increase financial resilience.
The dire situation is reflected in the company’s quarterly report, which indicates an MVR 66 million decline in net profit compared to the previous year. Ziyad attributed this partly to an overreliance on government projects, which accounted for 85 per cent of MTCC’s revenue when he took over. He emphasized the need for diversification into private sector projects, trading, and new business ventures as critical for restoring profitability.
In a further blow to MTCC’s operations, Head of Projects Ahmed Latheef revealed that the ‘Maha Jarraaf’ – a key asset for dredging and land reclamation projects – has been out of commission for over a year. This has resulted in a significant loss of potential revenue, as dredging constitutes roughly a third of the company’s project portfolio.
Despite the challenges, MTCC is taking steps to address the crisis. It has recommenced stalled projects, secured new contracts, and is seeking loans to acquire additional dredging equipment. Whether these measures will be enough to steer the company out of troubled waters remains to be seen. Observers are likely to question the role of the government, both as MTCC’s main debtor and as overseer of this vital state-owned enterprise. The situation underscores the fragility of state-led enterprises in the Maldives and raises concerns about their long-term sustainability.
