Addu City condemns government’s “obstruction” of guesthouse venture

Addu City Council has condemned the government’s alleged “obstruction” of its flagship guesthouse venture which aims to establish up to 2000 guesthouse beds.

“Government officials are spreading falsehoods to reduce investor confidence with the aim of obstructing Addu City Guesthouse Venture,” read a council statement released on Monday (October 20).

Condemning the “atrocity,” the council urged “government officials to stop such acts and facilitate an environment for this project – intended to bring development to the people – to succeed.”

The tourism ministry has denied the allegations, though the President’s Office has told local media it believes the scheme was designed purely to benefit members of the Maldivian Democratic Party (MDP).

The council on October 13 had handed over 29 plots of privately owned land to an India’s SG18 Realty to develop approximately 250 beds.

Companies from Denmark, Australia, and the United Arab Emirates have also expressed interest in building and operating guesthouses, the council has said.

A source close to the Addu City Council said government ministers had told investors foreigners they would not be allowed to operate and manage guesthouses.

However, State Minister for Tourism Hussein Lirar has dismissed Addu City Council’s allegations, and said he has to consult with a lawyer to definitively say if Maldivian laws and regulations bar foreigners from operating guesthouses.

“If foreigners get involved in guesthouse business, it narrows the opportunity for Maldivians to benefit,” he said.

An amendment to the Guesthouse Regulation of 2010 says licenses will be issued only to Maldivians, or partnerships without foreigners or companies registered in the Maldives as per the 1996 Company Act.

The Company Act says foreign companies may do business in the Maldives if they register in the country.

Meanwhile, President’s Office Spokesperson Ibrahim Muaz Ali has today said the Addu City Guesthouse Venture is a scheme by opposition MDP to benefit its supporters. All six Addu City Councilors belong to MDP.

“It seems to us as if it’s a plan to benefit individuals of a certain party. MDP members have participated in Addu City Guesthouse Venture meetings, and it seems from the photos and media that it is aimed to benefit party members. So it appears the project is designed for political gain,” he told newspaper Haveeru.

He claimed the council should have shared information on the venture with the government and the Local Government Authority if they sincerely intended the project to benefit all Addu residents. The council has previously said the Ministry of Tourism has been informed and Minister of Tourism Ahmed Adeeb has written a letter approving the venture.

The ministry has meanwhile revealed plans to establish guesthouse islands where multiple investors will be invited to build guesthouses on uninhabited islands.

The guesthouse island consists of three components, leasing of 5000 square feet plots for 25 rooms, 10,000 for 50 rooms and water villa plots for 100 rooms.

Foreigners can only invest in the 5,000 and 10,000 square feet plots if they form a joint venture company with a Maldivian. However, they will be allowed to bid for the water villa component without a Maldivian partner.

The Addu City Council in its statement said investors have expressed interest in developing guesthouses in all areas designated for guesthouse development in Addu.

Although landowners will have the option of operating guesthouses once they are built, the majority of landowners have no desire to manage them, Mayor Abdulla Sodiq previously told Minivan News.

The council has said the aim of the US$20million venture is to create jobs in the country’s second most populous region and increase living standards in Addu.

The region’s Gan International Airport will only become viable with 3,000 – 4,000 beds in operation in Addu, the council has said.

There are only two resorts in Addu at present and only a few additional islands for resort development. Even if all the remaining uninhabited islands are developed as resorts, it would not increase bed capacity to the required figure, the council said.

Hence, guesthouse tourism is key to ensuring the viability of the Gan International Airport, the council added.

Despite being the country’s second largest urban area, Addu is home to just 3.6 percent of the industry’s registered bed capacity.

The Maldives’ tourism industry, with over 100 resorts and nearly one million visitors per year, brings in approximately US$2 billion annually.