Auditor General's Office (AGO) reveals the prices of the flats in the Hiyaa housing scheme set by the previous government were economically unfeasible.
In an audit report, AGO stated the government and Housing Development Corporation (HDC) would have incurred a significant financial loss if the flats had been leased at the previous price of USD 363 per month. The audit was conducted after the HDC requested AGO to review the prices of the 7,000 housing units set by former President Abdulla Yameen's administration.
AGO stated it has reviewed the policies behind the various prices set for the housing units in its report. As such, the price of USD 712 set by HDC this year, the USD 427 price set by the previous government's housing ministry in 2018, the USD 359 price set by the new Male' City Council this year, and the USD 550 price set by the current government were reviewed by the AGO.
The report stated a debt of USD 583 million would be incurred in net cash flow in a 25-year period if the Hiya housing units were leased at the prices set by the previous government or the new Male' City Council. It also stated a debt of USD 8.9 million would be incurred in a 25-year period if the housing units were leased at the price of USD 550 set by the current government. However, the report stated a revenue of USD 130 million would be generated in net cash flow in a 20-year period if the housing units were leased at the price of USD 712 set by HDC.
AGO stated the estimates have taken into account the loans taken by HDC to complete the project as well as other costs related to the housing units. It stated the previous government would have also set a price close to USD 675 in 2018 if the equated monthly installment (EMI) method had been used to estimate the value of the housing units. Therefore, AGO stated the HDC and the government would have incurred a significant loss if the housing units were sold at USD 362 and would have been unable to pay back the loans used to finance the project.
In the audit report, AGO advised the relevant institutions to use the EMI method to estimate the monthly payments needed for housing units in order to take into account the revenue needed to repay the loans.