It has emerged that China Railway Construction Corporation (CRCC) was paid a USD 13.2 million advance for the reclamation of five sites in Rasmale'—the mega-development project at Fushidhiggaru lagoon—before any physical reclamation work had even commenced.
CRCC was awarded the contract after the government terminated its initial agreement with Capital Marine Engineering Construction (CMC) and decided to divide the reclamation of Rasmale' among multiple contractors. CRCC’s scope included reclaiming 352 hectares of land across sites "A," "B," "H," "I," and "K."
However, the company failed to complete any of the tasks stipulated in the contract as agreed.
Details of the transaction surfaced following a report leaked by the whistleblower account "Hassan Kurusee" on X. The report is an independent evaluation conducted by Epoch Associates for the Housing Development Corporation (HDC), commissioned after CRCC claimed it was owed USD 9.4 million for work performed.
The agreement signed between HDC and CRCC was valued at USD 265.5 million, covering the project from the survey and design phases through to reclamation and coastal protection. The project was divided into three phases, with a total completion timeline of 18 months.
According to documents submitted by CRCC following the agreement, the company claimed to have completed only four percent of the project. Despite this, CRCC’s invoice to HDC demanded USD 6.2 million for preparatory works and USD 3.2 million for reclamation activities.
However, the evaluation by Epoch Associates concluded that CRCC had actually completed only three percent of the total project. The evaluation further revealed that the company had not fully completed a single line item as specified in the contract.
Furthermore, Epoch determined that several tasks CRCC claimed to have finished did not meet the specifications outlined in the contract drawings.
As an example, the report highlighted the construction of a temporary jetty required before the start of major works. CRCC attempted to pass off a small jetty it had reclaimed at Fushidhiggaru lagoon as this structure. However, the jetty did not conform to the designs submitted by the company.
Similarly, CRCC claimed to have largely completed the relocation of coral from Fushidhiggaru lagoon. This was the single most expensive item on their invoice, with the company seeking USD 2.6 million for the task.
But the consultant’s investigation found no evidence of where the corals had been relocated. Epoch noted there was no way to verify whether the relocation had actually taken place and advised against paying for these areas.
The report also indicated that the value of the work completed by CRCC that could actually be utilized by subsequent contractors did not even reach one million dollars.
HDC and CRCC are currently in negotiations to terminate the agreement. During these talks, HDC sought to recover the remaining balance of the USD 13.2 million advance after deducting the value of work performed. However, despite the consultant recommending a much lower valuation in the independent audit, the HDC board agreed to accept the figures proposed by CRCC.
While millions of dollars are being settled with CRCC—a company that failed to reclaim a single hectare of land—HDC completed the entire reclamation of Rasmale' Site "J" for a total cost of USD 21 million.
