Opposition allege corruption in Thilafushi port deal

The opposition has alleged corruption in a new government deal with a Dubai-based marine terminal operator to establish a commercial port and free trade zone near Malé.

Opposition members have criticised the deal over an apparent lack of transparency, noting the government had signed an MoU with Dubai Ports (DP) World last month without an open bidding process.

DP World, among the world’s largest ports operators, is expected to invest up to US$300 million in a deep-water complex on the industrial island of Thilafushi, and create hundreds of jobs for Maldivians according to the government.

Tourism minister Ahmed Adeeb said the government will sign an agreement for a joint-venture company with DP World this month.

Former MP and MDP member Visam Ali said DP World was only interested in the Maldives to protect its multi-billion dollar port in India’s Cochin.

“Dubai World has already made a huge investment in the Maldives region. There are three main ports in this region, Colombo, Tutticorin and Cochin. Dubai World has made a US$2billion investment in the Cochin port, to handle a million containers at the same time,” she said at a rally in Kulhudhuffushi this weekend.

“Their only reason to invest in the Maldives is to protect that investment, because if there is a major port in the Maldives their investment in the Cochin port will fail. Maldives’ strategic location will make a port here more beneficial to traders. So Dubai World knows if there is a major port in the Maldives, their Cochin port will not be economically viable. So they are attempting to take control of the Maldives port. There is black money in this.”

Adeeb and DP World were unavailable for comment at the time of going to press.

Meanwhile, London-based maritime analysts Drewry Equity have characterised DP World’s interest in the Maldives as an attempt to take on Colombo’s position in the Indian Ocean, as the Maldives is “more strategically ideal as a cross-road between Far East-Europe and Far East-Africa trade lanes than the Colombo port.”

However, a Maldives port may “cannibalise” transshipment volume at DP World’s main port at Jebel Ali, Drewry said, adding that the best strategy for the company would be to operate the Maldives port as a low margin facility, possibly in partnership with a shipping line.

The maritime research organisation also said Maldives as a transshipment hub “is a digression from DP World’s core strategy of handling higher gateway cargoes, which allows for higher margins.”

Ruling Progressive Party of the Maldives MP Ahmed Nihan last week said the port was a first step in transforming the country into Singapore.

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Government signs MoU with Dubai Ports World

The Maldivian government signed a Memorandum of Understanding (MoU) with Dubai Ports (DP) World on Thursday (March 19) to develop a port at Thilafushi as a free trade zone.

In a press statement on Sunday (March 22), DP World said the MoU was signed for the development of the Maldives’ “ports and logistics industry” by DP World Chairman Sultan Ahmed Bin Sulayem and Tourism Minister Ahmed Adeeb.

“The Maldives has been growing rapidly, driven largely by its tourism development. We are working with them to help diversify the economy through building infrastructure, logistics and transport links needed to make this happen,” said Bin Sulayem.

“The UAE has much experience and expertise in this area thanks to the vision of our leaders to explore new growth strategies. We are proud to share our expertise with the Maldives as they develop their capabilities in the global supply chain industry.”

The press release added that the MoU was the outcome of several meetings between DP World and Maldivian government officials over the past few months, including discussions between Bin Sulayem and President Abdulla Yameen in July and September 2014.

Economic Development Minister Mohamed Saeed and Youth and Sports Minister Mohamed Maleeh Jamal also attended the signing ceremony along with key DP World company officials

The global marine terminal operator said the meeting “provided an opportunity to highlight DP World’s global portfolio and expertise in assisting partners with the development of their infrastructure and transport networks.”

After signing the MoU in Dubai, Adeeb told local media that DP World has agreed to complete the new Thilafushi port with a free trade zone within two years of signing a joint venture agreement with the Maldives Ports Limited (MPL).

A timeline for the project has been agreed upon and the MoU was signed with a view to signing the joint venture agreement in a month, he said.

“The fiDP Worldrst phase would also include a big cargo container terminal. First the port service, then a free trade zone for the imported cargo which will be isolated with a fence. Import and export cargo will be kept there,” the co-chair of the cabinet’s economic council was quoted as saying by Sun Online.

Adeeb – also chairman of the Special Economic Zones investment board – told the press last week that the central commercial port would be relocated from Malé to the industrial island of Thilafushi.

The envisioned free zone at Thilafushi port would include facilities for bulk breaking and transhipment cargo handling, he said, adding that the project would be divided into three phases with an estimated investment of between US$250 and US$300 million.

A larger port was essential logistically if 50 new resorts were to be developed, he continued, noting difficulties at present in importing and clearing resort supplies through the central port.

Economic Development Minister Mohamed Saeed said the Maldives was ripe for “an ocean economy” and the current administration has undertaken unprecedented efforts to diversify the economy with a focus of maritime businesses.

Congestion was a serious problem at the Malé commercial port, which has space for about 60,000 containers, Saeed explained.

“Due to the efficiency of the ports in Singapore and Dubai with an established efficient free trade zone, cargo from all over the world is being brought to these ports. It’s collected and then go to their destination. So merchants can get items even if they didn’t produce the cargo and it’s cheaper to bring things in bulk and redistribute,” Adeeb told local media after signing the MoU.

Photos by Economic Development Minister Mohamed Saeed 

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