State to seize Island Expert’s luxury flats to compensate for POLCO losses of MVR 291 million

Parliament’s Public Accounts Committee Sub Committee has decided to recommend that the state seize a luxury flat building under construction in Hulhumale' as compensation for a loss of MVR 291 million incurred by the police welfare company, POLCO.

The building, being developed by Island Expert, the contractor responsible for constructing the police housing complex, has been constructing a luxury building in Hulhumale' Phase 2 for some time. It has been revealed that some flats have been sold despite the project not being approved for sale.

Deputy Speaker Ahmed Nazim, who also chairs the sub-committee that reviewed the matter, announced the decision at a meeting held yesterday. The sub-committee found that POLCO suffered a loss of MVR 291 million due to the contractor’s misconduct, although an earlier audit estimated the loss at MVR 355 million.

“This is the first time the state is being awarded compensation in such a case,” Nazim said.

If taken over and redeveloped for social housing, the site could accommodate over 150 apartments, Nazim said, compared with the 117 luxury units currently planned.

The acquisition cost of the land has not yet been paid to the Housing Development Corporation (HDC), he added.

The 15-storey apartment block, located on Lot No. 20493 in Hulhumale' Phase 2, includes a mix of 1+4 bedroom, 1+3 bedroom, three-bedroom and two-bedroom units, with a building footprint of 2,095.99 square metres on a plot of 3,135.79 square metres.

Despite regulations requiring 20 percent completion before sales can begin, some flats have already been sold, with buyers reportedly charged unofficially.

“There is clear evidence that the contractor developed the building by siphoning money from POLCO. This is not a third party investment. This is public money,” Nazim said.

According to Island Expert’s website, the luxury apartment block is expected to house up to 80,000 people.

The committee also decided to recommend the establishment of a Serious and Complex Financial Investigation Office under the Anti-Corruption Commission (ACC) to investigate such cases further.

The police housing project, known as Blues Housing and launched in June 2013, has so far cost MVR 1.06 billion, according to the audit. The audit also found that costs had ballooned to MVR 1,851 per square foot.

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