Government has amended the Public Finance Act to ease advance payments without guarantee for some projects. The sixth amendment to the Public Finance Act was gazetted yesterday.
According to the new amendment, projects that do not have formal bidding will no longer require approval from the Finance Minister and a ‘guarantee’ to sanction advance payments. These projects are classified as essential services provided by the government that do not include bidding and are contracted to companies with majority state-owned shares and companies listed on the Maldives Stock Exchange.
However, depending on the project’s value and type, it is required to submit information of the contractor along with a letter of recommendation from the Finance Minister to the tender board. Moreover, advance payment can only be sanctioned for projects with a procurement value of no less than MVR 250,000 and the advance payment cannot be more than 15% of the total value of the project. The amendment also detailed how to sanction advance payment if it is more than 15%.