A $15 million submarine cable project, initiated by the previous administration to lower internet costs and boost digital trade, has reached a complete standstill after the current government failed to secure the necessary funding to operationalise it.
The "OCM-IAX" submarine cable project was spearheaded by the Maldives Fund Management Corporation (MFMC) through its subsidiary, Ocean Connect Maldives (OCM).
Under this project, OCM successfully landed the cable for India’s Reliance Jio Infocomm’s international submarine cable system, "IAX," three years ago.
The plan was to operationalise the cable by 2024. However, to date, the cable remains inactive, and there is no clear path to recover the invested capital.
According to MFMC’s 2023 audit report, the project has ground to a halt due to a lack of funding. All project activities have been suspended because of these financial constraints.
The OCM Cable Project
- MVR 236 million had been spent on project activities by the end of 2023.
- The government has invested MVR 224.8 million in equity into the project.
- Although construction of the Cable Landing Station in Hulhumalé is complete, MVR 19.9 million remains unpaid to the contractor.
To sustain the project, the current administration issued a sovereign guarantee of MVR 115.6 million and USD 7.5 million in 2024. However, the current status of that guarantee remains unclear.
The financial health of the parent company, MFMC, is also in a precarious state. The audit report indicates that the company’s losses are mounting annually.
In 2023, while the company generated MVR 5.6 million in revenue, it recorded a loss of MVR 41.3 million for that year alone. The company’s accumulated losses reached MVR 94.7 million by the end of the year.
The most alarming figure in the audit is the amount MFMC owes to contractors and suppliers for goods and services. This debt surged from MVR 5.8 million in the previous year to MVR 133.9 million by the end of 2023.
The audit also noted that MFMC has indicated it is exploring ways to proceed with the project in collaboration with other telecom operators. This information has not been officially disclosed by the government until now.
If the cable is sold to existing telecom operators, the decision would contradict the government’s objective for the investment: establishing independent state-controlled internet infrastructure.
The government maintains that the project will proceed as originally planned. President Mohamed Muizzu previously stated two years ago that the Cabinet had reached a decision to continue the project in this manner.
