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Parliamentary reaction mixed as Majlis committee cuts MVR2.4billion from state budget

Opposition and government-aligned parties have given mixed reactions to a decision by Parliament’s Budget Review Committee to enact an almost 15 percent reduction to state expenditure proposed for 2013.

The government-aligned Dhivehi Rayyithunge Party (DRP) has claimed that cutting the budget to MVR 14.5 billion from a proposed MVR 16.9 billion would impact the provision of government services and functioning of independent institutions at a vital time.

The DRP added nonetheless that it has yet to make a decision on supporting the cuts when the reviewed budget is put to a vote on the Majlis floor.

The opposition Maldivian Democratic Party (MDP) meanwhile contended that the cuts would be made to “unnecessary” recurrent expenditure, such as transportations costs for 30-strong government delegations on overseas trips, as well as over MVR 400 million in office furniture and stationary.

While also hitting out at the “lousy” promises made by President Dr Mohamed Waheed Hassan for allegedly unrealistic development projects, the former ruling party also stressed that existing wage bills were not expected to be affected by the proposed cuts.

The comments were made after parliament’s cross-party Budget Review Committee yesterday announced that it had trimmed the proposed annual budget budget to MVR 14.5 billion from the previous figure of MVR 16.9 billion.

The committee opted to make cuts to the budget based on recommendations from both the International Monetary Fund (IMF) and Maldives Monetary Authority (MMA) Governor Fazeel Najeeb to ensure more manageable expenditure next year.

A recent mission from the International Monetary Fund (IMF) had urged the government to implement a raft of measures to raise revenues, advising that strengthening government finances was “the most pressing macroeconomic priority for the Maldives.”

Some senior finance figures within the country have confirmed to Minivan News under condition of anonymity that the reductions made by the budget committee were an “encouraging” development in trying to manage state expenditure and that the proposals were likely to receive Majlis support.

However, DRP Deputy Leader and MP Dr Abdullah Mausoom has said that despite the party’s own concerns, it would wait for the government to decide whether it could function during 2013 with a reduced budget of MVR14.5 billion, before deciding whether to back the changes.

“We need to know whether the government thinks it can manage to function with this MVR 14.5 billion. If it can then we would have no problem,” he told Minivan News today.

Mausoom said that considering the cross-party composition of the Budget Review Committee that approved the cuts, support for the amendments in the People’s Majlis could prove likely.

“Debatable: Chucking 15 percent of Maldives budget is a deliberate attempt by MDP and PPM [government-aligned Progressive Party of Maldives] to ‘choke’ government and institutions in 2013,” Dr Mausoom tweeted yesterday.

Mausoom contended today that the “drastic” nature of the proposed reductions had raised concerns about whether funding would be distributed “fairly and equally”, as well as having a detrimental impact on the running of the state.

“It is a shame that such drastic reductions have been made. We have had a very different year [in 2012] to other years with the change of government. With 2013 set to be a presidential election year should the budget be squeezed as a result of political rivalry,” he stated.

Mausoom said that of noticeable concern was how the budget cuts may potentially impact the work of independent institutions that he said would be increasingly vital over the course of a contentious general election next year. He added that a wide number of independent institutions in the country had already gone on record to address concerns about how the present budget would impact on their operations.

According to Mausoom, the MVR 16.9 billion budget presented to the Majlis by Finance Minister Abdullah Jihad earlier this month was already providing the “bare minimum” of funding needed to operate the state.

“There is a risk that when you cut into flesh you will go too far and touch bone. This nearly 15 percent reduction will impact services and independent institutions, we have to hear from government if it can manage with such finances,” he said.

With the budget amended by the committee now awaiting parliamentary approval, Mausoom added that the party had already been in general support of proposed measures to raise revenue.

State salaries

Amongst legislation considered by parliament ahead of approving the budget for 2013 has been the passing of a bill on state wage policy that will create a National Pay Commission tasked with determining salaries and allowances for the public sector.

In July, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

However, in the same month the Finance Ministry decided to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totalling MVR 443.7 million (US$28.8 million), were to be paid back in monthly instalments starting in July.

The original budget proposal also included salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, some MPs this month estimated that the state wage bill would shoot up by 37 percent.

When questioned on the government’s decision to reimburse civil servants and increase military expenditure for the current budget, Dr Mausoom said it was important for the country to prioritise rule of law in the country and respect the role police and military played in society.

He claimed that the biggest challenge on the budget was in fact dealing with what he claimed was years economic mismanagement, particularly during the administration of former President Mohamed Nasheed and the Maldivian Democratic Party (MDP) over the last three years.

Mausoom added that Nasheed government’s attitude towards privatisation had not helped with state expenditure, accusing the previous administration of staffing private corporations with political appointees to give the false impression the state had trimmed civil service employment.

In light of this alleged financial mismanagement by the former government, Mausoom argued that while there was a need to further streamline state expenditure under the present government, such cuts should be made gradually rather than the drastic cuts he believed had been proposed by the Budget Review Committee.

However, MDP MP for Nolhivaram and fellow review committee member Mohamed ‘Colonel’ Nasheed said that the cuts would be made largely by reducing “unnecessary recurrent expenditures” within the budget.  As such, no civil service wages are expected to be touched by the cuts, he added.

Nasheed claimed that the committee had looked at specific areas of the budget where “fat” could be cut from state expenditure without directly impacting services.

“What we proposed was that there could be reductions to internal and external transport [for government employees],” he claimed. “We have big delegations going abroad at present. What we have called for is a 50 percent reduction of transport costs. It is not necessary to send 30 people abroad on trip. Five people could go for example.”

Another area Nasheed claimed cuts could be more easily made was in the purchase of new office furniture that could reduce spending by some MVR 451 million in line with the costs of supplies like stationary and paper. He claimed such expenses could be reduced through more effective online governance.

Cuts were also said to have to be made in the proposed provision of specific services to islands around the country, which Nasheed claimed had never been viable considering the current economic challenges facing the Maldives.

“The president has made many lousy promises on his tours of islands for developments that cannot be granted. We cannot work from a fantasy budget,”

Finance Minister Jihad, Economic Development Minister Ahmed Mohamed and head of the Parliamentary Financial Committee Ahmed Nazim were not responding to calls from Minivan News at the time of press.

Budget criticism

When delivered to the People’s Majlis earlier this month, the state budget for 2013 presented by Finance Minister Jihad came under heavy criticism from both opposition and government-aligned parties over the course of a 16-hour budget debate.

MP Ibrahim Mohamed Solih ‘Ibu’, MDP Parliamentary Group Leader contended at the time that the proposed budget could not be salvaged or improved through amendments.

Meanwhile, MP Abdulla Yameen, Parliamentary Group Leader of the Progressive Party of Maldives (PPM), said that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.  Yameen was not today responding to calls.

While the debate over the budget regularly came to a halt due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies. These projects included developments such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.

Earlier this month, State Minister for Environment and Energy Abdul Matheen Mohamed moved to play down reports that his department had slammed the proposed state budget for neglecting the “fundamental rights” of Maldivians, claiming there had been a “misunderstanding” with local media.

Environment Ministry Permanent Secretary Ahmed Saleem was quoted by the Sun Online news agency at the time as claiming that some 15 projects proposed by his department had been excluded from the budget. These projects were said to deal with issues including waste management, as well as supplying water and sewerage systems to more islands around the Maldives.

However, Matheen claimed that Saleem’s reported comments had been the result of a “misunderstanding” by its author.  He alleged that the journalist had focused on a few points of a long meeting with the committee.

Consolidation

Speaking to Minivan News earlier this week, Jihad reiterated that in trying to balance state spending with providing national developments, the government favoured a policy of population consolidation – relocating certain island populations to larger administrative areas.

He added that a strong focus had also been provided to amending revenue raising measures, while also trying to cut spending at government offices.

The Finance Ministry issued a circular at the beginning of the month to all government offices and state institutions with instructions to implement cost-cutting measures during the final month of the year that included cancelling all overseas trips.

However, Jihad maintained that the circular was not a long-term financial strategy, but rather a traditional measure imposed by the government during December.

“At the end of the year some offices have a habit of spending lavishly,” he said. “This is just a regular measure at this time of year to curb costs.”

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MNDF divers retrieve body of missing Korean tourist

Police have confirmed that the body of a Korean tourist reported missing yesterday (December 17) from Meedhuhparu resort in Raa Atoll has been discovered today in a joint operation conducted with staff at the property and a Maldives National Defence Force (MNDF) dive team.

Authorities have said that the body of the deceased, identified as 32 year-old Korean national Dohwan Oh, has been transported to Male’ and is now awaiting repatriation.

In a statement issued today, the Maldives Police Service has said that the deceased was discovered 20 metres underwater in the area where he was first reported missing following a snorkelling excursion with his wife.

Police Spokesperson Sub-Inspector Hassan Haneef could not confirm when exactly the body would be repatriated at the time of press.

Tourist safety

Addressing the growing influx of tourists from Asian destinations coming to the Maldives, Tourism Minister Ahmed Adheeb Abdul Gafoor today pledged in local media to enforce stricter safety measures across the industry to try and cut down potential snorkelling incidents.

Adheeb stated that the industry must evolve and adapt to the changing market geared increasingly towards Asian visitors who were generally not as adept at swimming as tourists from more established markets.  According to the tourism minister, this evolution includes increasing ocean awareness for tourists while monitoring and strengthening existing regulations.

“If such incidents keep repeating it is a major concern. It will adversely affect our tourism. We need to change the services being provided with the market,” Adheeb told local media.

Missing Chinese national

Meanwhile, Police Spokesperson Haneef said today he was unable to comment over whether the case of another tourist who went missing from the Bandos Island Resort and Spa earlier this month – initially suspected to be a snorkelling incident – was presently being treated as a criminal investigation.

Immigration authorities confirmed Saturday (december 15) that a Chinese national allegedly linked to the disappearance of a tourist staying at a Maldives holiday resort had fled the country, defying a court-mandated travel ban issued Wednesday (December 12).

Local media had previously reported that the husband of Chinese tourist Song Yapin,who went missing from the Bandos Island Resort and Spa on December 6, had accused a fellow Chinese national staying at the property of murdering his wife.

Haneef said that as police investigations were ongoing into the incident, no details on the nature of its work could be given at present.

The MNDF confirmed on Saturday that the search to locate the missing Chinese national was continuing.  However, MNDF Spokesperson Colonel Abdul Raheem said that the country’s coastguard had presently ceased sending out dive teams to explore local waters.

“We will not be calling off our operation until the person is found, but we will be amending our operation on a daily basis,” Colonel Raheem said at the time.

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Bidding period for Herethera Resort extended for third time by Maldives Tourism Development Corporation

The bidding period for the management or purchase of Herethera Resort has been extended for the third time by Maldives Tourism Development Corporation (MTDC).

MTDC is still looking for a party to purchase or manage the resort after the last bidding period closed on Sunday (December 16). The latest bidding period will continue until January 21.

The company has not stated why the last bidding period ceased, but on previous instances they said that they had to cancel bids due to a lack of interest from potential investors.

ONYX, a company from Thailand, previously managed the resort until February this year.

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Stricter safety measures to ensure tourist safety: Tourism Minister Adheeb

Tourism Minister Ahmed Adheeb Abdul Gafoor has reiterated the importance of ensuring the safety of tourists in the Maldives through stricter safety measures.

In light of the recent suspected snorkelling incidents whereby one tourist died and another is still missing, Adheeb revealed to local media that efforts are underway to strengthen existing regulations to ensure such incidents are not repeated.

As of next month, Adheeb stated that preparations will be undertaken to initiate various activities in relation to tourist safety.

According the tourism minister, the industry had so far been based on the European market, where he said tourists were generally much more adept swimmers. However, he claimed that east Asians who were now dominating tourism numbers in the Maldives market were not so familiar with the ocean.

“Europeans are generally strong swimmers. But the ocean is a whole new experience for the Chinese. The level of excitement for them is very different. We have to take that into account and be more aware of it when we make arrangements,” Adheeb said.

Adheeb also stated that the tourism industry must evolve and adapt to the changing market, whilst also increasing ocean awareness for tourists. Additionally, existing regulations must be monitored and strengthened.

“If such incidents keep repeating it is a major concern. It will adversely affect our tourism. We need to change the services being provided with the market,” Adheeb told local media.

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Senior UK politicians to be quizzed over Scottish Police College’s training of Maldives officers

Senior UK government figures including Foreign Secretary William Hague are to be quizzed by politicians over the role of a Scottish police college in training Maldivian officers accused of perpetrating human rights abuses in the country.

Following an investigation carried out by UK-based newspaper The Guardian, politicians at Westminster and the Scottish Parliament of Holyrood are to press government ministers on the Scottish Police College’s role in training Maldivian officers.

The Guardian has reported that the MPS stands accused of using “torture and sexual assault against detainees and acting against democracy activists and journalists” after the controversial transfer of power that occurred on February 7 this year.

Police authorities in the Maldives have played down the abuse allegations raised by a number of NGOs such as Amnesty International, questioning possible bias in the data gathered in their reports. The MPS has also said that the allegations of abuse did not reflect the international scope of training provided to officers in the country.

The UK-based newspaper’s investigation reported that at least 77 senior Maldives police officers and commanders – including the Commissioner of Police Abdulla Riyaz – had been trained by the Scottish Police College, located in Fife.

Amnesty International, former senior Maldives officials and opposition activists said they had deep concerns about the UK’s links with the MPS after officers were accused of breaching human rights, the Guardian reported.

The Scottish Police College, which is reportedly earning significant sums of money through working with MPS officers, has an ongoing contract to train Maldives police officers on a diploma course for junior ranks and middle and senior rank officers.

Speaking to the Guardian, the MPS said that it took its obligations seriously, and that reforms recommended by British advisers, as well as consultants from Canada and Australia, were being implemented by the MPS.

MPS spokesman Superintendent Abdul Mannan told the Guardian: “On one hand calling for MPS to be more efficient in dealing with officers’ misconduct and violation of human rights, and on the other calling to suspend all the assistance MPS receives to achieve this, contradicts their [critics] known intention and their actions.”

Commissioner of Police Abdulla Riyaz was not responding to calls from Minivan News at the time of press.

Police Spokesman Hassan Haneef told Minivan News today that there was no link between the training local police officers received in Scotland and the allegations of abuses carried out by some of its officers.

“Our training is in accordance to regulation supplied from other countries all over the world, including the UK, Canada and Australia,” said Haneef.

The UK Foreign Office has meanwhile defended the UK’s record in the Maldives, but spoke of concern over the surge in violence since the ousting of Nasheed in February.

“We have serious concerns about allegations of police brutality in Maldives, especially in February 2012,” a Foreign Office spokeswoman told the Guardian.

“We have privately and publicly urged the Maldivian government to fully investigate all allegations and ensure perpetrators are brought to justice. We have also called on all parties to ensure institutional reforms are put in place to consolidate democracy and further protect human rights in Maldives.

Farah Faizal, the former Maldives high commissioner to the UK, told the Guardian that close links between British police and the MPS had to be urgently reviewed.

“What I can categorically say is that [the training] doesn’t appear to be working,” she told the paper. “If you see the brutality which is going on in Maldives and the impunity with what’s happening, if these people are being trained by the Scottish police, it’s a waste of taxpayers’ money. It’s unacceptable.”

In November a three-man delegation from the Inter-Parliamentary Union (IPU) expressed concern over the failure to punish the police officers who used “excessive force” against MPs earlier this year.

Philippine Senator Francis Pangilinan from IPU’s Committee on Human Rights of Parliamentarians, speaking to members of the press, revealed: “The delegation is deeply concerned that the police officers who used excessive force against the members of parliament earlier this year have not yet been punished, and that Members of Parliament appear to remain subject to intimidation.

“The delegation points out that in several of the cases in the use of excessive police force, there is clear video evidence available which should have enabled the authorities to take effective and swift action. The delegation therefore calls on authorities to do everything possible to expedite their efforts to a successful conclusion,” Pangilinan said.

A Spokesperson from Scottish Police College at Fife told Minivan News that it would not be reviewing its training procedures, but would be taking guidance from the High Commission on whether its existing agreement with the MPS would continue.

“We are continuing conversations with the High Commission on the matter,” the spokesperson said.

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Parliament passes bill on state wage policy to create Pay Commission

Parliament yesterday passed a bill on the state wage policy to create a National Pay Commission tasked with determining salaries and allowances for the public sector.

The wage policy legislation was passed with 46 votes in favour, two against and two absentions. The bill was submitted by Independent MP for Haa Dhaal Kulhudhufushi Mohamed ‘Kutti’ Nasheed and sent to committee for further review on March 30, 2011.

If ratified, a five-member National Pay Commission will be instituted within 60 days with part-time members appointed by the president for a five-year term.

The commission would be chaired by the Finance Minister and would determine salaries and allowances for state employees and authorise pay raises.

The commission would also formulate standards and rules for determining the state’s pay scale or appropriate salaries based on qualifications and nature of employment.

The bill stipulates that the commission must consider the cost of living, inflation and the consumer price index in determining wages.

Moreover, salaries should incentivise government employees to work in islands with small populations.

The commission would also have to consider the state’s resources, public debt and social justice in approving salaries and allowances.

Once the law comes into force, articles in the Human Rights Commission Act, Civil Service Commission Act, Defence Forces Act, Police Act, Elections Commission Act, Prosecutor General’s Act, Anti-Corruption Commission Act, Judicial Service Commission Act, Broadcasting Act, Customs Act and the Civil Aviation Authority Act that allows the institutions to determine wages for officials and staff would be abolished.

IMF recommendation

At a press conference held upon conclusion of a visit by an International Monetary Fund (IMF) mission last month, head of the mission Koshy Mathai stressed the importance of instituting a Pay Commission to streamline the pay structure for government employees.

“We have a lot of independent institutions in this country and they are all on different pay scales,” he observed.

“There’s no harmonisation within the public service. There are radically different pay scales. And that has problems in terms of incentivising staff to belong to one institution versus the other. And it also implies a lot of cost for the government. So establishing a Pay Commission that can set up a rational system of compensation for the entire public service seems like a priority.”

According to a report by the World Bank in May 2010 which identified the dramatic growth of the public sector wage bill as the origin of the Maldives’ ongoing fiscal imbalances, increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, which was “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

“Between 2004 and 2009, the average monthly salary of a government sector worker increased from MVR 3,223 (US$250) to MVR 11, 136 (US$866),” explained a UNDP paper on achieving debt sustainability in the Maldives published in December 2010.

Former President Maumoon Abdul Gayoom responded to growing calls for democratisation with “a substantial fiscal stimulus programme” of increased government spending, “much of which was not related to post-tsunami reconstruction efforts.”

“This strategy led to a large increase in the number of civil servants from around 26,000 in 2004 to around 34,000 by 2008 or 11 percent of the total population. Thus the government simultaneously increased the number of public sector workers as well as their salaries,” the paper noted.

Consequently, recurrent expenditure – wage bill and administrative costs – exceeded 82 percent of total government spending in 2010.

However, the new government’s efforts to enforce pay cuts of up to 20 percent and downsize the civil service – which employs a third of the country’s workforce – were met with “a severe political backlash from parliament,” the UNDP paper observed.

Recurrent expenditure

Presenting the 2013 budget to parliament earlier this month, Finance Minister Abdulla Jihad noted that of the proposed MVR 16.9 billion (US$1 billion) of government spending, more than 70 percent was recurrent expenditure.

“As in other years, the highest portion of recurrent expenditure is expenditure on [salaries and allowances for government] employees,” Jihad explained. “That is 48 percent of total recurrent expenditure.”

During the budget debate in parliament, Majority Leader MP Ibrahim Mohamed Solih ‘Ibu’ criticised Finance Minister Jihad for failing to mention budgeted salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, Ibu explained that the wage bill would shoot up by 37 percent.

Echoing the concerns of the parliamentary group leader, Maldivian Democratic Party (MDP) MP Eva Abdulla revealed that MVR 6 million (US$ 389105) was added to the budget of the Maldives National Defence Force (MNDF) following the controversial transfer of presidential power on February 7.

Since the MDP government was ousted in the wake of a police mutiny on February 7, Eva said that the police and army have hired 250 and 350 new staff respectively.

Consequently, the institutions spent more than MVR 75 million (US$4.8 million) in addition to the approved budgets for 2012, she claimed.

The proposed budget of MVR 930.9 million (US$60.3 million) for defence expenditure in 2013 was meanwhile 14 percent higher than 2012.

Eva observed that the increase in the government’s wage bill of 37 percent was approximately MVR1.7 billion (US$110 million), which was also the amount allocated for harbour construction in the 2013 budget.

These funds should instead be spent for “harbours, education, sewerage and housing,” she argued.

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Police arrest nine in Male’ during 24-hour special operation

The Maldives Police Service has said nine individuals were arrested during a recent 24 hour special operation conducted to try and curb crime rates in Male’.

In a statement, police said that the special operation, designed to try and make the capital more peaceful, was conducted between December 15 to December 16 – leading to the arrest of the nine men for a number of different offences.

Authorities have said that 359 persons were questioned in the capital during the operation, while 13 body searches were conducted over the 24 hour period.

Police reported that one case of theft, one case of robbery, three road accidents, one drug related crime and other seven cases were reported while the operation was going on.

Another key focus of the special operation was said to involve ensuring vehicles were being operated according to local regulations, law enforcement officials have said.

According to police, vehicle check points were therefore established at different areas of Male’ during the operation. 383 vehicles were checked during the operation.

Police stated that officers have also questioned individuals and groups deemed to be roaming around the capital without any purpose during the operation, which was conducted between Male’ City Police, Specialist Operations [SO] and Traffic Police.

Police powers

On December 4, during a press conference to give details of the investigation in to the death of late MP and Religious Scholar Dr Afrasheem Ali, Commissioner of Police Abdulla Riyaz called on parliament members to not hesitate in giving more powers to the police. Riyaz said at the time that such powers were required to curb growing criminal activities within Maldivian society.

“I know that members of the parliament are hesitant to grant more powers to the police because of the political views they hold. But we need stricter laws to stop such acts from happening. Hesitance to grant more powers isn’t a solution for police discrepancies. Powers should be granted and at the same time they can establish a proper accountability mechanism,” he said at the time.

The commissioner said that police would have “zero tolerance” towards criminals and would utilise all powers and resources at hand in preventing crimes.

“That means, we will not allow a drunkard to freely wander around the street. Police officers will question suspicious people on the road and they have been given the order to stop and search anyone who they feel is suspected of being a criminal or carrying out a crime,” he said.

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Government considering seeking compensation from GMR: Attorney General Azima Shukoor

Attorney General (AG) Azima Shukoor has said the Maldives government could opt to seek compensation from infrastructure group GMR after it decided to void the India-based company’s concession agreement to develop Ibrahim Nasir International Airport (INIA), according to local media.

GMR last week confirmed that it was seeking an estimated US$800 million in compensation in order to recover what it has claimed are investment and earnings after the government “wrongfully” terminated its contract.

In a press conference held yesterday (December 17), the attorney general maintained the government’s belief that the agreement with GMR to develop INIA was illegal.  She added that the government therefore intended to seek compensation for damages it “might” have incurred during the process of entering into the contract with GMR, local newspaper Haveeru reported.  The contract was signed during the administration of former President Mohamed Nasheed.

Highlighting the pending arbitration process in Singapore Court between the government and GMR, Shukoor said that efforts were being made to appoint arbitrators for the hearings. She added that the government and Maldives Airports Company Limited (MACL) had appointed a “member” of Singapore National University as their arbitrator.

Similarly, GMR will also be given a 30-day period to appoint an arbitrator on its behalf.

Shukoor suggested during the yesterday’s press conference that it may take a period of one year until the due procedures were completed before a decision was made in the courts.

“It will take about two months time to appoint the panel to overhear the arbitration case. After that, parties will exchange documents and affidavits and respond to it and only after that a proper hearing on the matter will be held and might take up a period of one year,” she suggested.

Indian media reported last week that GMR had sent a letter to the Finance Ministry stating that it would seek compensation worth US$800 million.  Shukoor denied such a communication had been sent, adding that she did not believe such a demand could even be made.

“We terminated the agreement on the grounds of void ab initio (void from the outset) , therefore we will begin the negotiation on the position that the government of Maldives do not require to pay back anything,” Shukoor explained.

However, she admitted that owing to the size of GMR’s investment, there remained a possibility that government might have to pay some amount that would be determined through the arbitration process.

“Even if we do require paying back as compensation, it would be based on the decisions reached during the arbitration process. If it is settled out of court, then it would be based on legal arguments raised by the parties to the contract,” she added.

Shukoor has also claimed that even before INIA was handed over to GMR, no asset valuation was carried out – a decision expected to cause problems for the government. She also said that it has not been yet decided how the asset valuation would be carried out or how the amount that the government might seek in compensation from GMR would be calculated.

Even with the arbitration process now proceeding, Shukoor told local media that if the government believed additional compensation was required, it would seek the additional amount through the same courts.

“A lot of work is being carried at the moment. However, we have not yet calculated the amount we might have to pay or the amount that had been invested and even the amount we expect to seek,” she explained.

GMR demands US$800 million in compensation

GMR is seeking US$800 million in compensation following the termination of its US$511 million concession agreement signed under the former government back in 2010.

The Indian infrastructure giant has said that the proposed US$800 million claim was based on its “provisional estimates” and that the company had also taken into account the Maldives’ ability to cover such payments if compensation was awarded by the Singaporean courts overseeing arbitration.

GMR’s chief Financial Officer (CFO) Sidharath Kapur previously told Minivan News that the sum was a “preliminary estimate” based on a number of factors including investments made by the company, debt equity and loss of profits as a result of the contract termination.

He also added that on last Tuesday (December 11) the company had communicated with Maldives Ministry of Finance by sending an official letter outlining its concerns that the contract had been “wrongfully” terminated without respect for the agreed procedures.

Meanwhile according to Finance Minister Abdulla Jihad, no mechanism is currently budgeted should the Maldives face a multi-million US dollar bill for evicting GMR, but stressed it was not for the company to decide on any eventual payment.

He also played down fears that any potential fine could prove perilous for the country’s economy, as well as attempts to reduce the spiralling budget deficit, stating that any possible fines would be set by the Singaporean arbitration court hearing the dispute.

“We will deal with the matter when we know the amount of compensation to be paid,” he said at the time. “GMR cannot decide, it will be down to the court [hearing the arbitration].”

The INIA concession agreement

In 2010, the government of Maldives through its Finance Ministry, MACL and GMR-MAHB entered into a concession agreement with INIA whereby the Malaysian-Indian consortium were to develop and operate the airport for a period of 25 years.

According to the concession agreement a “project company” under the name GMR International Airport Limited (GMIAL) was to carry out the development project.

However, a lengthy dispute between the new government of President Dr  Mohamed Waheed Hassan and the GMR Group led to the eviction of the agreement.

On November 27, President Mohamed Waheed’s cabinet declared the agreement void, and gave the company a seven day ultimatum to leave the country.

Shukoor at the time stated the government reached the decision after considering “technical, financial and economic” issues surrounding the agreement.

She also claimed the government had obtained legal advice from “lawyers in both the UK and Singapore as well as prominent local lawyers – all who are in favour of the government’s legal grounds to terminate the contract.”

The INIA was handed over to the government on December 8, in an invitation-only press conference; Finance Minister Jihad presented the official handover documents to MACL Managing Director Mohamed Ibrahim, and said that the Maldives would pay whatever compensation was required “however difficult”.

With arbitration proceedings underway in Singapore over the contested airport development charge (ADC), GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.

On December 6, a day prior to its eviction, the government successfully appealed the injunction in the Supreme Court of Singapore. Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

That verdict, effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”, he said at the time.

A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.

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Police ask PG to press charges against motorists involved in Gasim’s death: no mention of police involvement

Police submitted a case to the Prosecutor General’s office on December, asking it to press charges against the motorist and the passenger on the speeding motorcycle involved in the death of bystander Abdulla Gasim Ibrahim on August 17.

In a press release issued on December 15, police stated that the persons alleged to have caused the death of Gasim were 21 year-old Ahmed Nadhee Saleem, of NooruhSabah on Gemanafushi in Gaafu Dhaalu Atoll and an unnamed 17 year-old boy.

Although previous police accounts stated that the two persons had been speeding on a motorcycle after stealing a mobile phone from an expatriate, the latest press release adds that the motorcycle being driven by the two was also stolen property.

The statement reads: “The request to press charges against these two persons has been sent to the Prosecutor General with relation to the events of August 17, at a time of which day these persons stole a motorcycle parked in front of Twilight Rivery in Henveiru ward, drove it at very fast speeds, stole a Nokia mobile phone from an expatriate who was standing near what was formerly known as the Bond Street shop, ignored orders from police at the scene to stop, and continued speeding despite attempts by police officers to stop them, resulting in a collision with a parked motorcycle on Orchid Magu near the Justice Building, causing severe injury and the ensuing death of the motorist on the parked motorcycle.”

The statement makes no mention of the police officer who was shown in leaked CCTV footage of the incident to have struck the fleeing suspects with his baton, causing them to collide with Gasim.

Police cover-up

The leaked video of the incident, which has been making rounds on social media since the beginning of December, shows a policeman stepping in front of the speeding motorcycle and hitting the motorcyclist on the head with a baton.

The victim’s family has also previously written to the Police Integrity Commission alleging that there was police involvement in the death of Gasim, describing the event as was later publicly seen in the leaked video. The family has said that it has so far not received any official response from the commission.

Despite the video evidence, police are now pressing charges against the cyclist and the passenger, while no mention of police involvement which led to the death was mentioned in the press statement.

Police Media Official Sub-Inspector Hassan Haneef was not responding to calls at the time of press.

Minivan News also tried contacting PIC President Abdulla Waheed, whose phone was switched off at the time of press.

PIC Director General Fathimath Sarira stated that the commission would be able to comment on the matter on Thursday, and that they had no comment for the time being.

On December 3, Sarira had confirmed that the commission was looking into the allegations of police involvement in the incident, stating that the ‘investigations are nearing conclusion’.

Meanwhile, the Maldivian Democratic Party (MDP) has submitted a motion to parliament, requesting the Committee on Oversight of the Executive review the case.

Prosecutor General Ahmed Muizzu was unable to speak to Minivan News today.

Human Rights Commission of the Maldives (HRCM) President Mariyam Azra was also not responding to calls, while HRCM Vice President Ahmed Tholal and member Jeehan Mahmood had their phones switched off.

Warning: Some viewers may find the following footage disturbing

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