Housing Development Corporation (HDC) has revealed the previous administration contracted a foreign company to develop the new 25-storey building of Ministry of Finance without securing the funds for the project.
In a statement issued in the wake of Malaysia-based WZR Property Sdn Bhd filing a case at Asian International Arbitration Centre, HDC said initially the Malaysian company was contracted to develop the building in Male' City at a cost of USD 122 million.
However, the cost rose to USD 155 million when the administration decided to develop the building in Hulhumale', instead of the capital city, according to HDC. The company maintained it took over the project on behalf of the Government of Maldives in March 2017, adding by then only USD 7.9 million were paid for the Malaysian company.
Furthermore, in the statement, HDC said it had no means of financing the project as the project was not included in its business plan. HDC said the only way it could finance the project was by leasing land plots from Hulhumale' for below the market prices.
The state-owned company further said it is negotiating with the Malaysian company to continue the project in a way it does not inflict loss even if it means to change the design of the building.
According to media reports from Malaysia, WZR Property Sdn Bhd is seeking the USD 29 million it has invested for the project and a further USD 30-40 million as compensation if the Government of Maldives decides to abandon the project.