The Second Bill: How Preventable Failures Multiply Public Costs

In early August, heavy machinery returned to Ameenee Magu. Excavators began stripping sections of a road fully reopened only about two and a half years earlier, creating a visible contradiction in central Malé: the public had already financed its redevelopment, yet taxpayer-funded resources were again being used to achieve the same outcome.

The original 1.79-kilometre project was awarded to the state-owned Road Development Corporation in July 2022 for MVR 84.4 million. Eleven of the road’s 13 segments were completed during President Ibrahim Mohamed Solih’s administration. The final two were finished in 36 days after President Mohamed Muizzu assumed office, and the entire road reopened in January 2024. Defects later appeared in sections completed under both administrations, including ridges, lifting asphalt and potholes.

The Ministry of Construction, Housing and Infrastructure has assigned the Maldives Transport and Contracting Company to reconstruct damaged areas. The value of this corrective work has not been disclosed, making it impossible to calculate the second bill. What is clear is that additional state capacity and expenditure are correcting a road delivered under an MVR 84.4 million contract.

The unanswered contracting question is just as important as the engineering failure. There has been no public explanation of whether RDC must finance the reconstruction through a defects-liability provision, performance guarantee or other safeguard. Without the original contract, the MTCC assignment and any liability assessment, the public cannot know whether RDC is absorbing the cost or the state is funding a second public company to correct the first one’s work.

A failure shared across administrations

The technical explanations require care. Following core-cutting tests, authorities said the sub-base had not been adequately compacted. Infrastructure Minister Dr Abdulla Muththalib told Parliament that manual equipment and inexperienced workers had produced inconsistent asphalt thickness, while the design had not sufficiently accounted for large buses. These remain explanations advanced by officials, rather than findings from a published independent engineering inquiry.

The chronology makes a one-sided political account difficult. The project was conceived, awarded and mostly executed under the Solih administration. Its final sections were rapidly completed under the Muizzu administration, and both earlier and later sections developed problems. Responsibility may differ by segment and stage, but the failure crosses the transfer of power.

The cost extends beyond asphalt. Closures disrupt buses, access to the Villingili Ferry Terminal and traffic near IGMH and Dharumavantha Hospital. Businesses face reduced access while commuters absorb delays. Poor execution creates both corrective expenditure for the state and secondary costs for households and firms.

From a visible road to invisible leakage

The machinery on Ameenee Magu makes infrastructure waste difficult to miss. Administrative leakage is quieter. On 5 August, National Social Protection Agency Chief Executive Aminath Shirna disclosed that more than MVR 10 million had been deposited into accounts associated with over 700 deceased beneficiaries because records had not been updated. NSPA has around 15,000 registered beneficiaries.

According to Shirna, the problem followed the dissolution of NSPA’s Monitoring Section in 2020, during the Solih administration. The unit tracked changes in beneficiaries’ circumstances and updated records. The current leadership is working to restore the function and review eligibility.

The MVR 10 million should be described precisely. A transfer into a deceased beneficiary’s account is an erroneous disbursement, not automatically a permanent loss. Some money may remain in accounts, be frozen or be recoverable. NSPA did not disclose how much was withdrawn, remains accessible or has been returned. That missing figure is an accountability gap.

Nor should it be merged with an earlier MVR 18.4 million finding. NSPA’s 2022 audit separately identified payments to people found ineligible for single-parent allowances, disability assistance and therapeutic treatment. The audit found that disconnected systems prevented timely verification and that a one-person recovery unit was inadequate. Of a MVR 504,500 sample of excess payments made between 2015 and 2018, none had been recovered by August 2023. No current recovery total for the wider amount has been reported.

The lesson is larger than staffing. Whatever the reason for removing monitoring, any immediate saving can be outweighed by years of payments against outdated records. A benefits system should not depend principally on recipients reporting a change that ends assistance. Deaths, marital status and overlapping aid should be checked securely across authorised systems.

Fenaka and the larger cost of weak controls

Fenaka shows what similar weaknesses look like at a major state-owned enterprise. According to the Auditor General’s special audit covering procurement and financial management from 2021 to 2023, the utility spent MVR 8.8 billion on goods and services. That is total expenditure examined, not a confirmed loss. The audit found extensive departures from competitive procurement and serious weaknesses in project and accounting controls.

Fenaka awarded 674 contracts worth MVR 2.22 billion for materials and water and sewerage projects. The audit found that 439, or 65 per cent, were awarded without open bidding. It also reported that more than MVR 1 billion had been spent on 57 power plant and office projects, of which 41 remained unfinished and were estimated to require another MVR 241 million to complete.

A separate special audit found MVR 261 million in salaries and allowances associated with projects that had not begun or were seriously delayed. This does not mean every payment was unlawful. It shows how unfinished projects generate operating costs while the intended asset remains unavailable.

Auditor General Hussain Niyazi later told Parliament’s Finance Committee that purchase orders worth about MVR 3 billion had not been included in Fenaka’s accounting system when the audit began. This does not mean MVR 3 billion in cash disappeared. It means the records did not present a complete view of commitments, creating uncertainty over payments and liabilities.

These findings concern operations largely conducted under the Solih administration. Under the Muizzu administration, the President ordered investigations, Parliament reviewed the audit and the Anti-Corruption Commission said it was investigating 161 alleged corruption cases. The ACC ordered Fenaka to recover MVR 21.46 million. An instruction is not evidence that the money has been recovered, and no current receipt figure is public.

The recurring second bill

Across Ameenee Magu, NSPA and Fenaka, four weaknesses repeatedly convert an initial expense into a later cost.

The first is failure to establish and enforce liability. When defective infrastructure is repaired under a new assignment without disclosure of the original contractor’s obligations, the public cannot know who carries the financial consequence. When one state-owned company corrects another, the cost can move around the public sector without meaningful accountability.

The second is fragmented information. A welfare platform that cannot verify a recorded death or eligibility change turns outdated data into recurring expenditure. Monitoring should be designed into the system, not treated as optional administration.

The third is political timetables. Ameenee Magu was delayed under one administration and completed rapidly under the next. Speed is not evidence of poor work, but deadlines disconnected from design review, testing and independent supervision can turn visible short-term delivery into a long-term liability.

The fourth is weak follow-through. An audit finding is not a refund, an investigation is not a completed case, and a recovery order is not cash returned. Without reporting on amounts frozen, recovered, written off or disputed, accountability ends at announcement rather than financial resolution.

Corrective expenditure reduces the money available for roads, healthcare, social protection, education and other priorities. It can weaken state-owned company balance sheets, increase pressure for fiscal support and impose disruption costs on businesses. With tight public finances, the price is measured both by what is spent again and what can no longer be funded.

Prevention before recovery

Some corrective measures are under way. NSPA says it will restore monitoring. Fenaka-related cases are being investigated, and the administration has proposed an Asset Recovery Bill intended to help trace and reclaim assets linked to corruption and theft.

Such legislation may close legal gaps, but it operates after money or assets have been misused. The less expensive answer is prevention: integrated databases, competitive procurement, enforceable performance guarantees, independent engineering supervision, publication of corrective contracts and regular recovery reports. Officials and contractors responsible for preventable failures must also face proportionate consequences.

The real test is not how many audits, investigations or bills are announced. It is whether responsible contractors pay for defective work, NSPA retrieves erroneous payments, Fenaka completes useful assets without financing stalled projects, and the same failures stop recurring. Until those answers are public, the Maldives will know the cost of delivery while being left to guess at the price of failure.