The Waste Management Corporation (WAMCO) had procured waste disposal services vehicles worth millions of Rufiyaa in 2016 and 2017 while circumventing the tender process, an Auditor General’s Office special audit report has revealed.
The report scrutinising WAMCO’s procurement practices identified that the company had, on several instances between 2016 and 2017, conducted processes in a manner that led to corruption.
The report noted that WAMCO had purchased vehicles worth MVR 43.9 million outside of a competitive bidding process. The report said the decision to purchase certain brands of trucks was undertaken so that specific suppliers would benefit and that the purchase of 10 dump trucks in 2016 for transporting garbage also facilitated corruption.
The decision was taken as some of the required vehicles were available from only one supplier WAMCO had said as justification, but vehicles should be purchased based on the specifications, not on any particular brand, and from the lowest bidder, the report highlighted.
According to the report, the vehicles procured by WAMCO were, contrary to their specified need of a specific brand, modified with the country of origin and brand of the vehicles fraudulently declared. Although the supplier agreed to supply 10 dump trucks at a cost of MVR 6.8 million, they were paid MVR 407,642 in excess of the agreed amount and while WAMCO had reported the excess payment as Goods and Service Taxes (GST), the supplier had not paid any such amount to Maldives Inland Revenue Authority (MIRA), the report noted.
The audit report further noted that WAMCO’s 2016 purchase agreement for the three ferries, valued at MVR 35.32 million, stipulated that the ferries should be equipped with Yanmar brand engines. When the supplier offered to change the brand of the engine at a discount, the US$10,000 discount offered by the supplier was not included in the amendment to the agreement and the ferries were paid for without the deduction, the audit found.
The Audit Office suggested that the Anti-Corruption Commission (ACC) investigate WAMCO, asserting that while Cummins brand engines were cheaper than Yanmar engines, WAMCO had agreed to change to the lower price brand without adjusting the contract price, potentially benefiting the supplier’s bottom line.
Two of the three ferries leased to WAMCO for one month have been extended monthly for over 20 months without the lease period being reviewed and, while the board had decided not to engage in sponsorships, funds were disbursed outside of standard procedure, the WAMCO audit report noted.
The report said that MVR 850,000 was disbursed for sponsorships to three associations over four occasions, with funds released after a memo signed by the company’s managing director was sent to the finance department.
In addition, MVR 1.92 million was spent in 2016 on five contracts awarded to various parties without agreements, and these contracts were executed through purchase order forms, but the forms did not include important provisions, such as measures to be taken if the works were not completed or were below standards, the report noted.