Massive Debt Owed to HDC: A Growing Concern for Maldives' Housing Sector

A growing financial crisis is unfolding within the Housing Development Corporation (HDC), with over MVR 1.2 billion owed by several private companies, including some of the largest firms in the Maldives. This alarming debt figure was revealed during a recent meeting of the Public Accounts Committee of the Maldives Parliament, sparking concerns about the future of major housing projects in the country.

Outstanding Payments from Private Companies

According to Baarah MP Ibrahim Shujau, a significant portion of the debt, totaling MVR 195 million, is linked to cancelled agreements. However, the bulk of the outstanding payments are attributed to private contractors involved in the development of flats in Hulhumalé, a key area for housing expansion. Reports indicate that more than MVR 900 million remains unpaid by these companies, raising serious questions about financial management and accountability.

Shujau expressed his concerns during the committee meeting, pointing out the troubling trend of well-established Maldivian companies failing to pay for land and development costs. "There are big, famous Maldivian companies which have not paid millions for the lands. This is concerning," he stated, underlining the urgency of addressing the non-payment issue.

Companies Owing Large Sums to HDC

The list of companies owing significant amounts to HDC is growing, with NPH Development topping the list. The company, currently involved in the development of a luxury flat building in Hulhumalé, owes MVR 213 million to HDC. Central Hithadhoo MP Ahmed Azan shared a document on social media, detailing the companies and the sums they owe, further exposing the financial strain faced by the corporation.

Preferential Treatment

Azan also raised concerns about the apparent preferential treatment some companies are receiving regarding payment extensions. While large corporations have been granted more time to settle their dues, smaller businesses have not been afforded the same leniency. "We have to look into the policies on which payment extensions were given to companies that have not paid for so long," Azan commented. "Many times, it is the ordinary, poor businesses that are not even given an extension for not paying this rent."

This has led to growing discussions about potential discrepancies in the payment policies, with calls for more equitable treatment for all businesses, regardless of size.

Financial Impact on HDC's Stability

The massive unpaid debts have raised alarms about HDC's financial stability and its ability to continue managing large-scale housing and development projects in Hulhumalé. MP Shujau linked the issue of unpaid dues to the broader conversation about the risk of bankruptcy for state-owned enterprises. He proposed that HDC's financial outlook could improve significantly if the outstanding payments were recovered, particularly by leasing commercial units and lands to those who can pay on time.

"Many lots are showing as terminated. Especially many commercial units and lands have been terminated. [I] believe that HDC's cashflow issues will be resolved when these lands are leased within the policy to parties that are able to pay the rent," Shujau suggested.

The Role of HDC Officials

In response to the growing concerns, the Public Accounts Committee has decided to summon HDC officials to gather more information about the corporation’s efforts to recover the unpaid amounts. The goal is to gain a clearer understanding of how HDC plans to address its financial challenges and ensure the timely completion of housing projects in Hulhumalé and other areas.