The Maldivian Democratic Party (MDP) has decided to pursue legal action against the government’s decision to award 206 development projects worth MVR 2.7 billion, citing violations of the Public Finance Act. The decision was finalised during the party’s National Council meeting held last night, where members reached a consensus to take the issue to court.
The projects, valued at a total of MVR 2.7 billion, were awarded to 53 local contractors during a ceremony at Barceló Nasandhura in Malé. Implemented under the Public Sector Investment Programme (PSIP) on a contractor-finance basis, the projects span housing, education, health, environment, sports, religious affairs, fisheries, homeland security, and youth empowerment.
According to the Ministry of Finance, the initiative is aimed at accelerating infrastructure development and increasing private sector involvement in national projects. However, opposition figures and financial experts have questioned the transparency and legality of the procurement process.
The MDP contends that the government’s use of the Single Source procurement mechanism, which allows for direct project awards without open bidding, breaches the Public Finance Act. The party’s resolution argued that this approach lacks fairness and transparency, further claiming that companies without government affiliations were excluded from participation. The Council’s decision also included a call for all project agreements to be voided and for independent institutions to investigate the matter.
The issue stems from amendments introduced earlier this year to Section 10.22 of the Public Finance Rules, which permit the cabinet to allocate projects directly under Single Source procurement. Critics, including former Tender Board Chairperson Ismail Zariyand and former Finance Minister Ibrahim Ameer, have voiced concern that such amendments weaken fiscal accountability and create opportunities for misuse of public resources.
Zariyand has also raised doubts about the capacity of some selected companies, noting that several lack registration or operational history as contractors. He further suggested that, although the projects are described as contractor-financed, financing has been facilitated through the Bank of Maldives at a nine percent interest rate, leaving the state responsible in case of default.
Ameer, who chairs the MDP’s Economic Committee, has said the process undermines established fiscal safeguards and could expose both the government and BML to unnecessary financial risk. He noted that the feasibility of completing the projects within the next two years remains uncertain, given the country’s fiscal constraints.
President Dr Mohamed Muizzu has defended the decision, stating that all contracts were awarded in compliance with the Public Finance Act and that companies met eligibility criteria, including audited financial statements and bank clearance. The Ministry of Finance maintains that the framework is intended to accelerate island development and attract greater private investment in infrastructure.
Despite these assurances, growing scrutiny over procurement procedures and fiscal transparency has intensified political debate. With the MDP preparing to take the issue to court, the government’s largest project allocation to date now faces legal and public accountability challenges.
