Government on Tuesday gave a 10 day ultimatum to India's Noorul Islam International Private Limited (NII) to resolve the problems currently plaguing the regional hospital in Haa Dhaal Atoll Kulhudhuffushi island.
The firm has been under intense pressure over falling standards at the hospital with the public urging the government to annul the agreement with the hospital operator.
Speaking to reporters on Tuesday, health minister Abdulla Nazim said the Indian firm was trying hard to address the issues at the hospital.
Nazim said the government would take "legal action" against the firm if it fails to address the problems within the 10 days.
According to sources, the firm has been ravaged by a rift between its shareholders.
The firm has also been accused of neglecting existing facilities at the hospital arguing that the regional hospital has slumped since its operations were handed over to NII.
