State compensation for legal fees exceeds budget estimate sixfold

State compensation for legal fees exceeds budget estimate sixfold

The Ministry of Finance, on Thursday, revealed that the amount paid by the government to cover losses and fines incurred by courts exceeded 2019 State Budget estimates sixfold.

As per the ministry's Weekly Fiscal Developments (WFD), the total sum spent as compensation during the first four months of 2019 amounts to MVR 336.7 million. However, only MVR 50.4 million was allocated in the budget for this purpose.

The Ministry attributed the dramatic increase to the cost of paying off loans worth MVR 15.2 million issued by the Bank of Maldives (BML) following the 2004 tsunami and making compensatory payment of MVR 280 million to Malaysian security company Nexbis for terminating a border control system project signed in 2010. Neither of these were preplanned expenditures.

The Finance Ministry stressed the difficulty of accurately predicting the sum of total fines and losses incurred by courts.

Additionally, the Supreme Court had ordered the state to pay MVR 348 million to Dheebaajaa Investments over a case of contract violation. The Finance Ministry will pay the amount once the Attorney General's Office issues the order.

Following the settlement to Dheebaajaa, the total amount paid by the state as compensation will rise to MVR 684 million which is 13 times the budgeted amount.

In 2018, the government spent MVR 116 million to cover losses and fines incurred by courts, despite the 2018 State Budget only allocating MVR 56.3 million for the purpose.