Audit reports have revealed that Maldives Airports Company Limited (MACL) agreed to pay MVR 1.76 billion ($114 million) under a settlement agreement for land reclamation work carried out by Capital Marine and Civil Construction (CMC) in Hulhumalé Phase 3, Giraavaru Falhu, and Thilafushi.
These transactions were conducted in secret between the government, the Housing Development Corporation (HDC), and the Maldives Fund Management Corporation (MFMC). To date, no official state institution has disclosed the details of how the operator of the country’s main international airport took over these reclamation projects or the terms agreed upon.
However, audits of the financial statements of MACL, Marine and Integrated Infrastructure Development (MIID), and Peninsula Infrastructure, published by the Auditor General’s Office and reviewed by Adhadhu, have begun to clarify the scope of the dealings.
According to audit documents, MACL agreed to provide these funds through its subsidiary, MIID.
In July last year, CMC announced that reclamation work had stalled because of non-payment and unclear cost-recovery terms. Two months later, on September 18, MIID was established. The timeline and official figures suggest MIID was created to resolve issues surrounding the agreements previously signed by CMC, HDC, and MFMC.
Under a Deed of Novation executed on October 7 last year, CMC’s prior obligations, rights, and works were transferred to MIID.
The audit classifies this transaction as an "acquisition of assets under construction." Of the total agreed value for work completed by CMC prior to the project transfer, MVR 323.8 million ($21 million) was paid by the end of last year. The remaining MVR 1.43 billion ($93 million) is scheduled for payment within the current year.
This arrangement has completely overhauled the framework of the original 2023 agreements. Initially, CMC was to be compensated with land and development rights. Under the new terms, CMC is to be paid in cash, while the land assets will be granted to MACL’s subsidiary, MIID.
Despite these changes, CMC continues to perform the physical reclamation work as a subcontractor. MIID paid MVR 123.6 million for work completed last year and also provided MVR 37.3 million worth of fuel for CMC’s dredgers.
MIID acquired this fuel on credit from the State Trading Organisation (STO). The audit notes that, as of the end of last year, this debt to STO remained unpaid.
According to the audit, a side letter to the settlement agreement stipulates that fuel costs are to be deducted from the future payments owed to CMC.
While the audits of MACL and its subsidiaries indicate that the MVR 1.76 billion is payment for work CMC performed prior to the project transfer, the documents do not specify how the funds are allocated across the various projects. It also remains unclear whether these payments are made directly to CMC or channelled through HDC.
On July 14 last year, Housing Minister Abdulla Muththalib stated that efforts were underway to terminate the agreement without paying compensation to CMC. At the time, he claimed that while the contractor had been paid $35 million for work at Giraavaru Falhu, only $20 million worth of work had actually been completed.
However, the Housing Minister’s previous assertions appear to conflict with the settlement agreement revealed in the audits, which commits to a substantial payout for CMC’s work.
Furthermore, it remains unclear whether the $35 million previously paid, or a reported $20 million advance for Hulhumalé Phase 3, has been deducted under the newly signed agreement.
The audit also revealed that in the same year MACL took over the reclamation projects, the company secured significant "working capital" loans by mortgaging the land and runway lease rights of Velana International Airport. In addition to MVR 1.26 billion in new loans, the company secured a $15 million loan by pledging government securities it held.
By the end of 2025, the total debt of MACL and its subsidiaries reached MVR 16.64 billion—an increase of MVR 3.2 billion within a single year. Budget documents for the coming year further show that the government provided a MVR 650.7 million loan to MACL this year specifically for the Giraavaru Falhu project.
Despite MACL’s debt and payables increasing by billions of Rufiyaa, the company receives no immediate cash flow from this transaction. Instead, it is compensated with land from HDC and MFMC. However, MACL has not specified the size, location, or handover date of this land anywhere in the audit records.
