High Costs, Low Transparency : The Troubling Saga of Dharumavantha Hospital’s Construction

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The Dharumavantha Hospital project initially conceived as a monumental endeavor, has plunged into a storm of controversy marked by accusations of corruption, mismanagement, and inflated costs. Emerging under the tenure of former President Abdulla Yameen Abdul Gayoom, this project’s trajectory has been marred by claims of financial impropriety and abuse of authority.

During ex-President Yameen’s administration, the contract for the Dharumavantha Hospital project was granted at a substantially higher expense than initially proposed. The oversight of the project, alongside other significant government undertakings, was under the purview of then-Housing Minister Dr. Mohamed Muizzu. This course of action immediately raised suspicions of potential kickbacks and questionable dealings, with Qasim Ibrahim, leader of the Jumhooree Party (JP), directly leveling allegations against Muizzu. Qasim contended that Muizzu exploited his position to construct an extravagant 15-story residence, potentially financed through illicit means.

Moreover, it came to light that the hospital project was awarded at a price that was notably inflated. Bids submitted by companies post-tender indicated that the hospital’s construction could have been achieved at a significantly lower cost than what was eventually agreed upon. Astonishingly, one company proposed a cost of approximately USD 50 million for the project – a stark contrast to the final contract of USD 150 million. This decision seemed to be guided by questionable motivations rather than sound financial acumen, underscored by the absence of transparent parliamentary endorsement.

Experts repeatedly criticized the project’s exorbitant cost, asserting that a facility of Dharumavantha Hospital’s specifications could have been constructed for a fraction of the funds disbursed. Specialists estimated the highest conceivable cost for the building at USD 40 million, suggesting that an additional MVR 1.5 billion was unnecessarily expended.

The project was handed over to Shenhua Construction during ex-President Yameen’s tenure, following an amendment to the Public Finance Act that allowed large-scale projects to be awarded without a competitive bidding process. Funding was secured from Shenhua and China Harbour Engineering Company, a subsidiary of China Communications Construction Company, Ltd. (CCCC), which had previously constructed the Sinamale’ Bridge.

Media reports revealed that Shenhua initially projected a cost of USD 140 million to complete the 25-story building in an email to Indira Gandhi Memorial Hospital on January 15, 2016. However, a week later, Harbour Engineering contradicted this estimate, submitting a document to IGMH stating that the building could be finished for USD 53 million – a USD 86 million difference from Shenhua’s estimate.

The succeeding President, Ibrahim Mohamed Solih, who followed Yameen, openly denounced the corruption and mismanagement entangling the Dharumavantha Hospital project. He contended that extravagant sums were squandered on equipment for the 25-story edifice, alleging a climate of corruption and deceit. President Solih, prior to his presidency, had already expressed concerns regarding corruption during the hospital’s construction and the unjustified expenses incurred.

In President Solih’s assessment, the construction of the hospital could have been realized for USD 54 million – far below the USD 140 million actually expended. He accused the project implementers of procuring outdated and unwieldy equipment, contrary to assurances of cutting-edge technology. This miscalculated equipment added to the overall costs as it proved incompatible with the hospital’s design.

The controversy encircling the Dharumavantha Hospital underscores the critical need for transparent and responsible governance in major public endeavors. Allegations of corruption and mismanagement have cast a shadow over the process of awarding contracts, the oversight of financial transactions, and the utilization of public funds.