Audit Report: Kolhufushi Council Leased 12 Land Plots for 50 Years in Violation of State Financial Regulations
12 ސެޕްޓެމްބަރު 2026 | ހޮނިހިރު 18:31An audit report has revealed that 12 plots of land for guesthouse development in M. Kolhufushi were awarded to individuals lacking financial capability, in violation of state financial regulations. The Audit Office further noted that despite the projects failing to progress according to their agreements, the council has neglected to take action, raising concerns over potential financial losses and the failure to complete the developments within the stipulated timeframe.
President Dr. Mohamed Muizzu meets with the Kolhufushi Island Council and the Women's Development Committee. | President's Office
The Auditor General’s Office has stated that the M. Kolhufushi Council leased 12 plots of land for a 50-year period in violation of the state’s public finance regulations.
The 2024 compliance audit report of the Kolhufushi Council Secretariat, released by the Auditor General’s Office, highlighted that state financial regulations mandate bid evaluations to be conducted strictly in accordance with the criteria specified in the bidding documents, information sheets, or official announcements. However, the report noted that the council’s process for leasing 12 plots of 5,000 square feet for a 50-year period to develop guesthouses was not carried out in compliance with these regulations.
According to the report, Article 5.1 (Prerequisites) of the information sheet for the council’s guesthouse land lease announcement stipulates a minimum investment of MVR 12,500,000 (twelve million five hundred thousand) per plot. To demonstrate financial capability, bidders are required to submit documentation proving they possess capital equivalent to at least 20 percent of the total investment value.
The report stated that every bidder is required to demonstrate a minimum capital of MVR 2,500,000 for each plot of land they apply for. The office further noted that although two parties submitted bids, it was observed that neither met the eligibility criteria specified in the information sheet provided by the council administration.
The Audit Office stated, however, that the council administration had leased the land to these parties in violation of the principles of equity and competitiveness mandated by the State Finance Regulations.
The report highlighted that the audit assessed the progress of leased land plots, noting that lessees of two plots have already commenced guesthouse construction. However, the report also cited information from the Council Secretariat stating that the lessees of 10 plots had failed to complete several mandatory requirements under their agreements by July 12, 2026. These outstanding obligations include land surveys, soil testing, water quality and utility assessments, guesthouse blueprints, outlet and public area designs, and Environmental Impact Assessments (EIAs).
The audit report stated that although the requirements stipulated in the agreement between both parties had not been fulfilled, the council office failed to take any action regarding the matter. Furthermore, the report noted that if regular consultations are not held and corrective measures are not taken when work fails to progress according to the agreement, there is a significant risk that projects will not be completed within the agreed timeframe, leading to potential losses.
