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Audit of GMR airport deal to be completed in February

Auditor General Niyaz Ibrahim has said that a special audit of the awarding of a concession agreement to develop, manage and operate Ibrahim Nasir International Airport (INIA) to a consortium of Indian infrastructure giant GMR and Malaysian Airports Holding Berhad (MAHB) is currently underway and will be completed in February 2013.

Niyaz told state broadcaster Television Maldives (TVM) yesterday (November 5) that an experienced British auditor was expected to join the team conducting the audit during the first week of December.

“We have completed a large portion of [the audit] with a special team dedicated to it,” Niyaz said. “We have been able to collect almost all the documentation we need and have reviewed them.”

He added that the audit of the bidding process has been completed. “After that, we will carry out a study of the contract and different analyses,” he said.

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Addu airport stake sold to Champa Afeef’s Kasa Holdings

An agreement was signed last night to sell 30 percent of the Addu International Airport Company Pvt Ltd (AIA) to tourism pioneer ‘Champa’ Hussain Afeef’s Kasa Holdings to raise finances to develop the Gan airport in Addu City.

AIA is a joint venture formed by the Gan Airport Company Ltd (GACL), Maldives Airports Company Ltd (MACL) and the State Trading Organisation (STO).

The airport infrastructure and facilities in the uninhabited Gan island of the southernmost Seenu atoll was leased to the government-controlled consortium for 50 years with a mandate to develop and operate the asset as an international airport.

The agreement to sell a 30 percent stake in AIA for MVR 60 million (US$3.9 million) was meanwhile signed on behalf of the company by Managing Director Shahid Ali – also Managing Director of STO – and ‘Champa’ Mohamed Moosa on behalf of Kasa Holding.

The agreement was signed in spite of a public threat by Jumhoree Party (JP) Leader and MP for Alif Dhaal Maamigili, Gasim Ibrahim, that Shahid Ali would be sacked from his post if the sale went through.

Gasim, who had previously alleged corruption in the deal, told reporters on Sunday night that Shahid could not “stay in his post if he signs it,” according to newspaper Haveeru.

He also warned that the STO MD could “not live on this island” if the sale was finalised.

Shahid meanwhile reportedly said after the signing ceremony last night that the agreement was signed after the Finance Ministry and Public Enterprises  Monitoring and Evaluation Board (PEMEB) gave clearance for the sale.

Shahid noted that Afeef’s stake in the seaplane operator Trans-Maldivian Airways (TMA) would be an advantage in the development of the Gan airport.

Following the signing ceremony, Shahid told private broadcaster Raajje TV that the sale was made after a decision by the AIA board of directors, a public tender, evaluation of shortlisted candidates and “authorisation from the Finance Ministry”.

Proceeds from the sale would finance “a major project to develop Gan airport,” he said, including expanding the runway and repairing damages in the airport as well as establishing a new drainage system and a seaplane base.

“The estimate of the consultants for all this is US$40 million. So even if we obtain loan finance or contractor finance for this US$40 million project, we would need an equity injection,” he explained. “Therefore, we need an investment to get this equity injection – a party that would give this money to the company as an equity injection.”

The AIA board in consultation with the government decided to invite proposals from Maldivian companies, Shahid said, adding that Kasa Holdings was the only local company to submit a bid.

Shahid stressed that Kasa Holdings was sold a stake in the management company AIA and not the Gan airport.

On the allegations of corruption by the government-aligned JP, Shahid insisted that the sale was made “through an open and transparent bidding process,” adding that AIA would “welcome” an investigation.

The Anti-Corruption Commission (ACC) revealed to local media today that it commenced an investigation into the sale of the AIA stake last month based on assertions in the press.

ACC Deputy Chair Muaviz Rasheed told newspaper Haveeru that the investigation would be completed this week.

Letter to the President

Speaking in parliament yesterday, JP MP Alhan Fahmy claimed that the “self-interest” of Dhivehi Qaumee Party (DQP) was behind the sale of the AIA stake, alleging that DQP senior officials Imad Solih and the party’s leader and Special Advisor to the President Dr Hassan Saeed were complicit in corrupt dealing.

“The government should not sign this agreement. This case should be investigated at a national level,” he said, claiming that the 30 percent stake “could be sold tomorrow to an Israeli party.”

“Addu Atoll Gan is a military strategic location the whole world is watching,” he claimed, calling on the government to reconsider the decision.

Alhan told Raajje TV last night that JP would submit the case to the ACC and parliamentary committees, repeating the corruption allegations and questioning the valuation of the 30 percent stake.

Alhan claimed that Dr Saeed had asked JP Leader Gasim not to oppose the deal at a meeting at the President’s Office yesterday.

In a letter to President Dr Mohamed Waheed Hassan Manik last week, Gasim contended that MVR60 million for 30 percent of AIA’s share was “a very small amount” as the value of the airport would exceed MVR 3 billion (US$200 million).

Moreover, while US$44 million had been estimated as the cost of developing the airport, the JP MP claimed that the project could be completed with US$24 million.

An “open tender just in China alone” for the project would suffice to prove his assertion, Gasim wrote in his letter to Dr Waheed.

Gasim warned that Kasa Holdings would be positioned to acquire 70 percent of AIA by moving to sell 40 percent to a buyer of its choice.

“If a member representing the government does not attend a board meeting held to sell this 40 percent, Kasa Holdings will have the power to sell 40 percent of shares to whoever it pleases at whatever price it wants,” Gasim wrote. “In light of my experience on how these [deals] are completed, I have to say that the ultimate result would be the remaining unsold 40 percent being sold to a buyer of Kasa’s choice and the opening up of the opportunity for Kasa Holdings to control 70 percent, and within this opportunity, for [Kasa] to sell 51 or more percent of AIA to another foreign party.”

Gasim further contended that the move would pose a risk to national security, as the government would have no legal powers over the company.

Cancelling the agreement would mean paying the foreign party a “huge amount in compensation,” he claimed.

Gasim insisted that the Gan aiport should be developed by MACL and offered in his letter to reclaim land for the project free of charge “using my own dredger, employees and machinery with the government only providing oil.”

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38 year-old man arrested on suspicion of molesting six year-old boys

A 38 year-old man has been arrested in the island of Ihavandhoo in Haa Alif atoll on suspicion of molesting three 6 year-old boys, reports Sun Online.

A police media officer confirmed that the suspect was taken into custody on October 29 but declined to reveal further information.

The suspect is reportedly from Meemu atoll and was married to a woman from the island. He had previously been arrested on drug-related charges.

Newspaper Haveeru meanwhile reported yesterday that the suspect had sexually abused six under-aged boys.

A resident of Ihavandhoo told the paper that the man had been living in the island for many years and had two children. The male victims, aged 6 to 12, were however not related to the suspect.

The Ihavandhoo islander claimed that the man took his victims to boat sheds and that the abuse had been going on for some time.

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Resolution on fuel subsidies for fishermen sent to committee

A resolution (Dhivehi) submitted by Maldivian Democratic Party (MDP) MP Mohamed Rasheed ‘Kubey’ calling on the government to issue without delay MVR 100 million (US$6.4 million) allocated for fuel subsidies to fishermen from the 2012 state budget was sent to committee at yesterday’s sitting of parliament.

The resolution was accepted and sent to the Economic Affairs Committee for further review with 42 votes in favour and five abstentions.

On October 17, parliament’s Finance Committee approved guidelines for the Fisheries Ministry to issue the subsidy directly to fishing boat owners.

However, Auditor General Niyaz Ibrahim then questioned the legality of issuing the subsidy, suggesting that it could be in violation of the Public Finance Act.

Fisheries Minister Ahmed Shafeeu told Sun Online yesterday that legal issues remained to be resolved before releasing the funds.

“We requested the AG [Attorney General] for advice, because subsidies cannot be provided without a [specific] law. The AG said that if it’s identified as a basic right, it can be provided based on the former Supreme Court’s ruling. But it involves legal problems. We are prepared to provide subsidies, we just have to follow the legal procedures,” he was quoted as saying.

Shafeeu said that the subsidies could not be released until the legal issue was resolved but expressed hope that it could be done before November 15, leaving one and a half months for the ministry to release funds to 1,053 vessels registered for the subsidy.

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STO obtains US$32 million loan facility for construction of five-star hotel in Hulhumale’

The State Trading Organisation (STO) and Export-Import (EXIM) Bank of Thailand co-signed a US$32 million syndicated loan agreement on October 30.

Under the agreement, Exim Thailand and Bank of Maldives will jointly finance STO’s construction of the 5-star, 250-room Radisson Blu Hotel in Hulhumalé.

In a press release yesterday (November 5), STO revealed that according to the agreement 85 percent of the loan must be paid to contractors from Thailand or used to purchase construction material and equipment from Thailand.

The disbursement of the loan is to begin in 2013.

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Government entertainment company to be dissolved

The government has decided to dissolve the 100 percent government-owned Maldives Entertainment Company Ltd (MECL) and made an announcement on Thursday seeking a liquidator.

The announcement invited interested parties to submit proposals before November 27.

According to the terms of reference for the liquidation, the government “decided to liquidate the company, given the level of engagement by the private sector in the development of the industry, and to allow their maximum engagement in the development of the industry.”

In June 2011, the Anti-Corruption Commission (ACC) discovered irregularities and discrepancies in the entertainment company’s finances.

“Even though records of expenditure were kept, the figures in the records and the actual amount withdrawn from the [corporation’s] bank account differs,” the ACC found.

“While company records show that MVR676,262.95 (US$43,800) was spent, the bank account showed that MVR807,703.95 (US$52,300) was withdrawn for expenses. Therefore, MVR134,470 was withdrawn from the bank without any record [of how the money was spent].”

Discrepancies in income statements meanwhile revealed that MVR524,121 (US$33,900) worth of income was not entered into QuickBooks (accounting software) records.

Moreover, as a result of the corporation’s spending exceeding its revenue, MECL had outstanding debts amounting to MVR122,178.98 (US$7,900), owed to various parties for purchases and services as of June 2011.

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Hulhumale’ Magistrate Court suspends all cases

The Hulhumale’ Magistrate Court has announced that it has suspended all ongoing cases following an injunction issued by the High Court on Sunday halting the trial of former President Mohamed Nasheed.

The High Court granted the temporary injunction or stay of the former President’s trial pending a ruling on procedural points raised by Nasheed’s legal team, which included the legitimacy of the Hulhumale’ Magistrate Court.

In its announcement on Monday, the Hulhumale’ Magistrate Court said it has suspended proceedings on cases involving marriage, divorce, guardianship, family matters, property lawsuits, civil cases, criminal cases involving extension of detention periods as well as other matters that could be affected by the questions raised over its legal status.

Meanwhile, at Sunday’s hearing of Nasheed’s appeal at the High Court, the Judicial Service Commission (JSC) revealed that it had filed a case at the Supreme Court to determine the legitimacy of the court.

Writing in his personal blog last month, Independent MP Mohamed ‘Kutti’ Nasheed explained that a magistrate court could not legally be established at Hulhumale’.

The Judicature Act states that magistrate courts should be set up in inhabited islands aside from Male’ without a division of the trial courts (Criminal Court, Civil Court, Family Court and Juvenile Court).

According to appendix two of the constitution, Hulhumale’ is a district or ward of Male’ and not a separate inhabited island. The former magistrate court at Hulhumale’ – controversially set up by the JSC before the enactment of the Judicature Act in October 2010 – should therefore have been dissolved when the Judicature Act was ratified.

Meanwhile, local media reported yesterday (November 5) that the Supreme Court ordered the Civil Court to send over all files and documents on a case submitted by a lawyer, Ismail Visham, over a year ago challenging the legitimacy of the Hulhumale’ Magistrate Court.

The Supreme Court had issued a writ of mandamus ordering the lower court to suspend its hearings and had taken over the case. The apex court had however not conducted any hearings on the case.

A court official told local media that a hearing on the case of the Hulhumale’ Magistrate Court’s legal status has not been scheduled.

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CCHDC allays fears of disease outbreak

The Centre for Community Health and Disease Control (CCHDC) has allayed fears of an outbreak of diseases in islands affected by flooding caused by heavy rainfall last week.

At a press conference on Sunday, Fathmath Nazla Rafeeq, officer in charge at the CCHDC, said the biggest threat was the spread of diarrhea caused by damaged sewage systems in islands hit hardest by the flooding.

She revealed that there was an outbreak of fever in the island of Kelaa in Haa Alif atoll. The centre has supplied chlorine and medicines to the island in the northernmost atoll, she added.

Nazla also appealed to the public to be wary of the spread of dengue by taking measures to prevent mosquito breeding.

Meanwhile, the Maldives Red Crescent sent teams of volunteers to Haa Alif Hoarafushi, Haa Dhaal Hanimaadhoo and Laamu Gan reportedly to provide information on prevention of communicable diseases and managing hygiene.

The teams will also participate in cleaning up efforts, the Red Crescent said in a press release, including 45 trained volunteers working at Hoarafushi to assess the cost of damages caused by severe flooding.

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Auditor General, ACC Chair dismiss Attorney General’s delay allegations over GMR issue

Auditor General Niyaz Ibrahim and Anti-Corruption Commission (ACC) Chair Hassan Luthfy have dismissed claims by Attorney General Azima Shukoor last week that the government was awaiting completion of investigations by the independent institutions before making a decision on annulling the concession agreement with Indian infrastructure giant GMR, to develop and operate the Ibrahim Nasir International Airport (INIA).

“I would like to point out that the Anti-Corruption Commission still hasn’t finished the complete investigation into the GMR matter. This also presents difficulties for us,” Azima said at a press conference last week.

“I have met with the heads of ACC and Auditor General two, three times. I can’t say anything about the investigations. But I haven’t heard back anything after I shared the information I had available with them.”

However, ACC Chair Hassan Luthfy told newspaper Haveeru yesterday that he did not believe that the government was awaiting the completion of the ACC investigation to take action.

Luthfy said that the government had failed to take action on corruption cases investigated by the ACC and forwarded for prosecution.

“Hence in reality this is blaming someone else while failing to undertake their own responsibilities. I do not think that a party [government] who cannot take action over our previous findings on inquiries can take action in this [GMR] case,” Luthfy was quoted as saying.

Luthfy told Minivan News in September that the investigation could “take some time.”

Auditor General Niyaz Ibrahim meanwhile told state broadcaster Television Maldives (TVM) yesterday that he “could not accept” the Attorney General’s claim.

“If the government believes the agreement should be annulled, the government has the discretion or powers to do so,” he said. “The work of the Auditor General’s Office is not part of the government’s decision-making process. If the government made decisions based on what the Auditor General’s Office says, that would compromise the independence of the Auditor General’s Office.”

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