Audit Report Reveals MACL Spent MVR 1.05 Billion on Land Reclamation in 2025

The Maldives Airports Company Limited (MACL) incurred MVR 1,051,863,065 in expenditure on land reclamation and associated national infrastructure projects during the year ended 31 December 2025, according to the financial statement audit released by the Auditor General’s Office.

The disclosure provides the first public accounting of how the state airport operator assumed financial ownership of reclamation projects that fall outside its traditional airport development mandate.

Project Breakdown

The audit report sets out a detailed breakdown of the expenditure. The largest allocation was for K. Rasmale at MVR 435.3 million, followed by HA. Dhidhdhoo at MVR 262.4 million and Th. Vitufushi at MVR 238.7 million.

Smaller allocations were recorded for EIA, bund wall and associated costs at Mathiveri (MVR 407,000), Adh. Maafaru Lagoon (MVR 711,000), Sh. Komandoo (MVR 117,000), Sh. Milandhoo (MVR 346,000) and K. Galufalhu (MVR 283,000). For Th. Vilufushi, the report separately lists EIA costs of MVR 1.187 million, bund wall costs of MVR 4.551 million and sand shifting costs of MVR 3.797 million.

In addition to project-specific lines, the audit records fuel costs of MVR 68.26 million and other direct costs of MVR 35.809 million, bringing the total to MVR 1,051,863,065.

Subsidiary Conduit and CWIP Treatment

The audit disclosures reveal that the expenditure was incurred through Peninsula Infrastructure Private Limited, a wholly owned subsidiary incorporated on 8 October 2025 to carry out dredging, sand mining, reclamation and civil engineering. According to Note 2.6.1 of Peninsula’s financial statements, the company incurred the MVR 1,051,863,065 on behalf of MACL.

Following a formal directive from the Ministry of Finance and Planning, the entire sum was removed from Peninsula’s books and recognised as Capital Work-in-Progress (CWIP) directly on MACL’s balance sheet. Peninsula subsequently applied the MVR 1.05 billion against payables owed to MACL, extinguishing the intra-group liability. The audit report states that the Ministry of Finance and Public Enterprises, through letter Ref: 13-M/16/2026/40, confirmed the expenditures relate to strategic reclamation and infrastructure development projects to be treated as CWIP as at 31 December 2025.

Broader Financial Exposure

The audit report also details significant financial risks arising from MACL’s expanded role. The company’s total debt has reached MVR 16.64 billion, secured against the leasehold rights of high-value land in Hulhulé as collateral for loans from foreign financial institutions, including MVR 6.2 billion owed to the Export-Import Bank of China.

A separate subsidiary, Marine and Integrated Infrastructure Development (MIID), established on 18 September 2025 to manage projects such as the Giraavarufalhu reclamation, assumed MVR 1.76 billion in settlement obligations to contractor Capital Marine and Civil Construction (CMC) under a Deed of Novation executed on 7 October 2025. Of that total, MVR 323.8 million was paid by the end of 2025, with the remaining MVR 1.43 billion scheduled for settlement in 2026. MIID’s outstanding payables to contractors and dredging companies reached MVR 1.47 billion.

The audit report notes that securing large loans by mortgaging Hulhulé land, combined with the substantial financial burden of reclamation projects placed on MACL, poses a significant financial risk to both the company and the state. It identifies the burden of financing large-scale state land reclamation projects that fall outside MACL’s core mandate as one of the most significant challenges to the company’s financial sustainability.

The CWIP recognition provides accounting clarity on the MVR 1.05 billion outlay, classifying it as an asset under development rather than a current-year expense. The audit report notes the Ministry’s confirmation and Management’s assessment that the expenditures are expected to generate future economic benefits. Whether that expectation is borne out and whether the projects deliver returns sufficient to justify the financial exposure they have created remains a question the audit disclosure leaves open.