Author: Neil Merrett

State failing to prove ‘Usfasgandu’ lease terms violated: Mayor ‘Maizan’ Ali Manik

Male’ City Council (MCC) Mayor ‘Maizan’ Ali  Manik has maintained the state has failed to provide clear examples of any laws or regulations violated in the leasing of the ‘Usfasgandu’ protest area to the Maldivian Democratic Party (MDP).

Manik told Minivan News that the state’s allegations, presently the basis for a Civil Court case against the MDP-majority MCC, were politically motivated and had failed to take into account the site was being used by the wider public regardless of politics.

“We have not broken any rules or regulations on this matter,” he said. “Even if somebody takes this area away, people will instead take to the streets to have their voice heard.”

The mayor’s comments were made following the latest hearing on Tuesday (August 14) of a Civil-Court cased filed by the state against the MCC to hand over the ‘Usfasgandu’ area.  The case concerns allegations that the municipal authority had acted illegally in leasing the protest site.

Local media reported that the state had responded in the Civil Court by claiming the city council was in violation of both articles five and six of the agreement to lease the land – charges documents submitted along with the case were said to prove.

The state also alleged that the MMC was deliberately attempting to delay the ongoing case by claiming the charges “were not clear”, according to newspaper Haveeru.

Addressing the case, Mayor Manik claimed that no specifics had been given by the state as to where the council had violated its agreement in providing the land.

The case was reportedly adjourned Tuesday in order to provide the state time to respond to the MCC’s allegations. Manik claimed that a date for the next hearing of the case had not yet been set.

Minister of Housing Dr Mohamed Muiz was not responding to inquiries from Minivan News today regarding the case.  President’s Office Spokesperson Abbas Adil Riza and Media Secretary Masood Imad were also not responding to calls at the time of press.

Legal wrangling

The case is the latest development in ongoing legal wrangling between the MCC and the Ministry of Housing over the Usfasgandfu site.

Earlier this month, the Civil Court ruled that the Maldives Police Service does not have legal authority to order the MDP to vacate its ‘Usfasgandu’ protest camp on May 29.

The court noted the same day that the a wider dispute between the MCC and Housing ministry over guardianship of the Usfasgandu area could only be settled once the Civil Court reached a verdict on the case being heard this week, which was filed by the ministry requesting the MCC be ordered to hand over the plot.

On May 29, police raided Usfasgandu with a search warrant from the Criminal Court and ordered the MDP to vacate the area before 10pm, after which the Maldives National Defence Force (MNDF) began dismantling the protest camp.

The Civil Court however issued an injunction ordering the security forces to halt the dismantling after the MDP challenged the legality of the operation. The injunction was to stand until the court reached a verdict and was later upheld by the High Court.

Police had obtained a warrant to search Usfasgandu on the grounds that the MDP was using the area as a hub for criminal activity and black magic.

MDP lawyers however argued at court that the warrant did not provide a legal basis to dismantle the demonstration area.

Following the dismantling of the MDP’s protest camp at the tsunami memorial area on March 19, the Male’ City Council (MCC) leased the Usfasgandu area to the former ruling party for three months, prompting repeated attempts by the government to reclaim the area.

The MCC – which has nine MDP councillors and two government-aligned Dhivehi Rayyithunge Party (DRP) councillors – however refused to hand over the area to the Housing Ministry despite a cabinet decision authorising the Housing Ministry to reclaim the plot.

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Surfing association attacks MNDF resort proposal over fears for local access: “Like England selling off Wembley Stadium”

The Maldives Surfing Association (MSA) has hit out at a proposed resort development on a Maldives National Defense Force (MNDF) training island, claiming it will substantially reduce local access to an already limited number of high-profile waves in the country.

Ahmed Rifaee, a member of the MSA’s Steering Committee, claimed that while Maldivians were largely unaware of the significance of the waters around the island of Thanburudhoo to the country’s sporting heritage, the proposed resort development threatened to leave local people with access to just two world-class surf points.

Rifaee said that tourism laws presently prohibit non-guests from using prominent surf points based at the country’s resorts – legislation that threatens the future development of a sport he noted had gained the Maldives its greatest athletic successes and recognition internationally.

The resort proposal, first discussed under the previous government as part of plans to fund a state-of-the-art military training complex, was forwarded to the Anti-Corruption Commission (ACC) this week to determine the legality of an island set aside for the military being leased for commercial purposes.

However, the private group linked to the development, Telos Investment, told Minivan News that a “robust development plan” was being put in place for local surfers, adding that discussions were already under way with surf authorities – including the MSA – over the issue.

Earlier this week, the MNDF confirmed to Minivan News that it would be leasing Thanburudhoo to a third-party that would develop the site as a surf resort. The island is currently used by officers for training and recreational purposes.

The country’s military authorities this month registered the MNDF Welfare Company in a bid to generate income to fund welfare services for the armed forces by investing in various businesses, including the tourism sector.

With an ACC investigation set to be tabled in the coming days, the development proposal was slammed by Rifaee, who claimed that the waters around the island were a unique experience for local and international surfers alike. He added that the waters housed two world class waves that had been used for generations to allow local surfers to hone their skills – no matter their levels of experience.

“We have been surfing these waves for a long time, they are one of the best training grounds for local surfers,” Rifaee said. “Outside the local community, it is little known by the wider Maldivian people about what a loss this would be to the country. I would say it was equivalent in England to selling off Wembley stadium to a foreign company.”

Former government proposal

In a proposal said to have been discussed last year between the government of former President Mohamed Nasheed, then senior MNDF figures, and Telos Investment, Thanburudhoo was to be leased for an initial 50 year period for development as a “boutique surf resort” to secure US$5 million in funding for an MNDF training facility.

The resort development plan was initially submitted by Telos Investment President Dr Gunnar Lee-Miller, who is said in the proposal to have experience “serving the Ministry of Human Resource, Youth & Sport, the Maldivian Olympic Committee, and several associations in a sports development capacity.”

MNDF spokesperson Lieutenant Abdulla Ali said this week that the concept of development of its training island as a tourist resort was approved by the former government in 2010, but that work had stalled “for various reasons”.

“However, we have started that process again, and the discussions are continuing,” Lieutenant Ali said.

No agreement at the time was reached on the proposals, which included a clause to allow local Maldivians “in good standing” with the MSA to have access to the waves around the resort twice a month, on every other Friday and Saturday.

While accepting that even limited access to local surf points was a less restrictive policy compared to other resorts in the country, Rifaee said even allowing access twice a month would be a major setback for national surfing.

“By allowing us to surf only on Saturday or Friday morning , when the waves are not always going to be there, this might not be too helpful,” he said. “It’s not just local surf spots that would be affected by such a proposal either. I’ve been told that there are one or two top dive spots in the waters. However, any resort development would need reclaimed land and a harbour, which will endanger these spots.”

Rifaee contended that while the MSA had yet to take a formal stance to oppose the resort development, discussions were ongoing over how to proceed.

“We are going to protest this if we have to. It’s part of our culture and has been for many years. Even my grandfather used to surf.”

Responding to the claims, Telos Investment told Minivan News that it would be issuing a statement soon regarding the project and the potential impacts on national surf development.

“To be sure, there is a robust surf development plan for local surfers and fruitful discussions with Maldivian Surf Association Leaders have already commenced,” Dr Lee-Miller responded by SMS at time of press. “We care greatly about the development of Maldivian surfers both in Male’ and the outer atolls.”

Minivan News was awaiting a full statement from Telos Investment at time of press.

Minister of Tourism, Arts and Culture Ahmed Adheeb was not responding.

Proposal

In a proposal submitted in July 2011 by Telos Investment and senior Ministry of Defence figures, Telos Investment would pay US$5 million dollars for a 50 year master lease for Thanburudhoo to develop a surf property for tourists. The money would be used to fund the development of a ‘Leadership and Management Centre for Excellence’ at the MNDF’s Girifushi facility.

The proposal stated that Thanburudhoo had originally been given to the MNDF to carry out combat training exercises – a purpose that it could no longer maintain due to the number of surrounding resorts.

“So rather than letting an under-utilised island continue, MNDF believes that Thanburudhoo can be utilised to give a new lease and life and strong future to Girifushi and the emerging leadership of MNDF and the country,” the proposal stated.

The proposal was not an attempt by the MNDF to enter the tourism market, collect a yearly lease from an island, or form a joint venture with a foreign investor.

Former Economic Development Minister Mahmoud Razee, who was acknowledged in the same proposal as having provided “constructive counsel” to Telos Invesment and senior MNDF officials, confirmed to Minivan News that discussions over the proposal had taken place. However no agreement was reached with the Nasheed government, Razee said.

Razee claimed the decision to not move ahead with the proposal was “partly due to timing”, but also concern over providing access to the surfing areas around the island for “young people”.

The government of the time had checked the offer in line with its wider Corporate Social Responsibility (CSR) programme and found it comparable to other privatisation projects, Razee said.

“However, what we didn’t do was make the project a joint venture with the MNDF,” Razee added.

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“Subterranean tunnels” and “private submarines”: Dutch Docklands details floating golf course

Proposals for the creation of a series of five man-made islands to support leisure developments such as a 19-hole golf course in the Maldives are expected to become a reality by the end of next year, project developers have told UK media.

Combining an underwater club house, subterranean tunnels and private submarines, architects have told prominent UK media that the golf course, estimated to cost £320m (Rf7.6 billion), will be “anchored” to the seabed through the use of cables or telescopic mooring to stabilise the landforms.

Once complete, golfers are expected to begin teeing off on the island’s surfaces by late 2013 -ahead of an official launch proposed for 2015.

The project was first approved back in 2010 under the government of former President Mohamed Nasheed as a means to try and diversify tourism in the country. An agreement was made with the then government to develop floating properties on five lagoons within Kaafu Atoll to include a convention centre and an 18-hole golf course as part of a joint venture agreement.

The UK-based Daily Mail newspaper has reported that European developer Dutch Docklands, which formed a joint venture with the authorities back in January 2011 to raise some US$500 million in funding, has unveiled further designs for the golf course – set to be based “five minutes” from Male’ by speedboat.

“The islands will also be designed for swimmers, divers and even private submarines to enter them from below, and the Dutch firm designing the scheme has said visitors will be able to rent private submarines that can surface right in the middle of their living rooms,” the newspaper reported.

Dutch Docklands, claims to have previously produced floating islands for several purposes including residential properties and jails out of a technology using concrete and polystyrene foam.

Company CEO Paul Van De Camp told the Daily Mail that he had promised the nation’s president that the man-made island developments would be an environmentally friendly project, as well as a solution to potential fears that the low-lying country could face extinction should sea levels rise sufficiently.

“’We have a way of building and sustaining this project that is environmentally friendly too. This is going to be an exclusively green development in a marine-protected area. The first part of the project to be built will be the golf course. This will be the first and only floating golf course in the world – and it comes complete with spectacular ocean views on every hole,” he was quoted as telling the Daily Mail.  “And then there’s the clubhouse. You get in an elevator and go underwater to get to it. It’s like being Captain Nemo down there.”

Koen Olthuis, who is working on the project through his Netherlands-based firm, WaterStudio, told the paper that the islands would be constructed outside of the country – potentially in India or the Middle East – a decision he claimed would ensure “no environmental cost to the Maldives”.

“When it comes to the golf course, the islands will be floated into position first and then the grass will be seeded and the trees planted afterwards,” he said.

The Daily Mail added that designers were aiming for the project to be run on renewable energy technology such as solar power, while claiming the construction would be carbon neutral.

Dutch Docklands had not returned calls to Minivan News at the time of press regarding the project.

Minister of tourism, Arts and Culture Ahmed Adheeb and Deputy Tourism Minister Mohamed Maleeh Jamal were also not responding to calls.

Environmental assessment

When the project was first announced back in 2010, the Maldives’ Environmental Protection Agency (EPA), which is responsible for conducting environmental impact assessments, said project would “definitely have negative environmental impacts”.

An EPA spokesperson at the time said: “it is not for the EPA to assess the risks of this project at this stage. The contractor [Dutch Docklands] is responsible for finding a suitable consultant to assess the risks.”

At the same time, a spokesperson for local environmental NGO Bluepeace said that as long as the project was conducted in an environmentally friendly manner, the proposals were “very exciting” and “innovative and weird”.

“I don’t think there should be a problem,” a Bluepeace spokesperson claimed, “but it depends on how they do it.”

Since the controversial transfer of power in February that brought President Dr Mohamd Waheed Hassan into office, the present government has pledged to try and transform the Maldives into the world’s largest marine reserve.

The government has claimed it also remains committed to the aims outlined by former President Mohamed Nasheed to make the Maldives a carbon neutral nation by 2020.

Minister of Environment and Energy Dr Mariyam Shakeela was not responding to calls from Minivan News today about the project.

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CNI committed to August deadline as co-chair temporarily departs for Singapore

The revised Committee of National Inquiry (CNI) charged with investigating February’s controversial transfer of power has said it remains committed to releasing its findings later this month, despite its Singaporean co-chair returning to Singapore until August 25.

Former President Mohamed Nasheed’s member on the commission, Ahmed ‘Gahaa’ Saeed, said today that the CNI’s investigations were continuing, despite co-chair G P Selvam – a retired Singaporian Judge – having to return to his home country to work on an arbitration case.

Saeed maintained that the commission’s report was expected to be sent to authorities on August 29, before being publicly released the next day, with Selvam believed to be working on the findings during his trip. Local media, citing a source in the CNI, reported yesterday that Selvam had been out of the country on business since August 3.

Without wanting to discuss the commission’s findings so far, Saeed told Minivan News that in previous cases where Selvam had been called to Singapore, any interviews with “important”, high profile witnesses had been rescheduled to allow him to hear such testimonies.

“When working with international partners, in some cases they will have existing commitments,” he said. “However, the commission’s work is continuing. Right now, [Selvam] is also preparing the report.”

A person familiar with the CNI’s workings meanwhile told Minivan News on condition of anonymity that there was some concern that the absence of the judge’ “may constrain” the panel’s ability to investigate at full capacity.

President’s Office spokesperson Abbas Adil Riza said the government had been aware of Selvam’s plans to return to Singapore, and believed that the CNI’s work would be completed “on schedule”.

“The CNI has not requested any additional time from the government to complete its findings,” he said.

CNI deadline

Earlier this month, Selvam stated at a press conference that the CNI’s findings would not state against whom the state should press possible charges.  He contended that this was for the Prosecutor General (PG) to decide.

Days earlier, former President Maumoon Abdul Gayoom, said he would not accept that the toppling of former President Nasheed’s government on February 7 was a coup d’état, even if the Commission of National Inquiry (CNI)’s report came to such a conclusion.

Initially, the commission was mandated to release its findings on July 31, but CNI members stated that their final report will be delayed, after hundreds of people have come forward offering new information.

Selvam at the time said that the new date for the report’s completion would be the end of August, which was later approved by the government.

Saeed said at the time that 244 people had registered to provide information to the commission following the reforming of the CNI.

“There has been a lot of interest. We will speak to each and every single one,” he said.

The new names joined the 87 spoken to by the government’s original three member panel, taking the total number of contributors to 331.

“That’s one contributor for every 1000 of population,” Saeed remarked.

Following the remarks by the commission, President Mohamed Waheed Hassan extended the deadline by which the CNI must conclude its report into February’s transfer of power by August 30, 2012.

The first three-member CNI was appointed by President Mohamed Waheed, following a police and military mutiny and Nasheed’s resignation, in what he and his party have described as a coup d’état.

Facing pressure from the Commonwealth and civil society NGOs, the government eventually agreed to reform the commission to include a retired Singaporean judge and a representative for Nasheed.

The former CNI subsequently released a ‘timeline’ into events that took place from January 16 to February 7.

The MDP accused the commission of trying to prejudice the work of new commission, and then released its own version of events in response – the ‘Ameen- Aslam’ report based on interviews with the security services. The government described the publication of this report as a “terrorist act”.

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Vice president’s party talks solely focused on resuming Majlis: President’s Office

Talks scheduled this week between senior parliamentary representatives and Vice President Mohamed Waheed Deen will be focused solely on trying to find a resolution to the ongoing suspension of the Majlis, the President’s Office has said.

However, the opposition Maldivian Democratic Party (MDP)  today accused government representatives of giving “conflicting” messages after contending that an agreement had been made for discussions to also focus on facilitating early elections to resolve the deadlock surrounding the controversial transfer of power on February 7.

Government Spokesperson Abbas Adil Riza told Minivan News today that talks at the President’s Office scheduled for 11am on Tuesday August 14, were being held at the request of Parliamentary Speaker Abdulla Shahid following the suspension of the People’s Majlis late last month.

Abbas maintained that Tuesday’s talks would be focused solely on addressing parliament’s suspension rather than topics already agreed under the agenda of the all-party talks, which include issues such as early elections.

“This meeting is being held at request of the speaker as the various parties felt they needed to speak with the executive,” he claimed.

In a statement released today, the opposition MDP said the vice president had agreed to an offer to engage in dialogue to try and find what it called a way forward in the “current political crisis.”

“[President] Waheed’s government has assigned their Vice-President Mohamed Waheed Deen to participate in the talks agreed among leaders of political parties represented in parliament,” the statement read.

Speaker Shahid opted to suspend parliament “indefinitely” on July 31 after claiming that “an atmosphere of calm necessary to conduct sittings could not be assured” following confrontations between MPs in the Majlis chamber.  Several sittings had been cancelled owing to disorder in the lead-up to the suspension amidst reports of MDP MPs confronting the speaker.

On Thursday (August 9), the now opposition Maldivian Democratic Party said that a date to resume parliamentary sessions was “yet to emerge”, though claimed it was confident discussions were on the right track.

MDP spokesperson and MP Hamid Abdul Ghafoor today claimed that the severity of the speaker’s decision to suspend parliament last month had effectively seen the country come to a political standstill.

“The party made it very clear at the time in a statement that we would not be cooperating with the Majlis unless we were able to address our grievances,” he said.

Ghafoor added that Tuesday’s talks between key parliamentary figures and the vice president would be aimed at addressing the issue of hosting early elections before those presently scheduled by the Waheed administration for July 2013.

Responding to President’s Office claims that only the issue of parliament’s suspension would be focused on in the talks, Ghafoor alleged that the party was continuing to receive inconsistent responses from the government.

“Right from the start of this process we have seen the government giving us conflicting messages,” he said. “We have chosen to ignore these contradictions for practical purposes.”

As such, the MDP claimed that its representative at the talks – MP Ali Waheed – would look to discuss issues including facilitating early elections.

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Date to resume parliamentary sessions “yet to emerge”, claims MDP

An exact date for resuming parliamentary sessions in the Maldives has “yet to emerge” following the suspension of the Majlis Speaker, the Maldivian Democratic Party (MDP) has said, as government-aligned parties request for the chamber to be reopened to MPs.

MDP MP and spokesperson Hamid Abdul Ghafoor told Minivan News today that the decision by Speaker Abdulla Shahid to suspend parliament “indefinitely” on July 31 had been the correct course of action, adding that MPs were on the “right track” to finding a potential resolution during the final 10 days of Ramazan.

Despite the claims, government-aligned MPs have continued to criticise the conduct of the MDP over the Majlis suspension.  The Dhivehi Qaumee Party (DQP) has this week urged that parliamentary sessions continue with the assistance of security forces to remove any members attempting to disrupt hearings.

Speaker Shahid at the time of announcing the suspension of parliament said that MDP MPs had confronted him in his private chambers after party member Mohamed Rasheed ‘Kubey’ was forcibly removed at the beginning of sitting.

“Moreover, confrontations occurred between MPs in the chamber to the point of becoming dangerous,” an official statement read, adding that “an atmosphere of calm necessary to conduct sittings could not be assured” as all recent sittings had to be cancelled due to disorder.

Shahid explained that he decided to invoke the Speaker’s authority under section 213(e) of the rules of procedure to cancel sittings indefinitely as he believed a political solution had to be sought through dialogue among parliamentary group leaders.

However, local media yesterday reported that DQP Vice President and Vilufushi MP Riyaz Rasheed had sent a letter to the speaker citing the conduct and perceived role of the MDP in having parliament suspended as an “infringement” of democratic rights in the country.

As well as calling for notification of the present situation to the Commonwealth Ministerial Action Group (CMAG) and the Inter Parliamentary Union (IPU), Riyaz was quoted by local newspaper Haveeru as calling for parliament to press ahead with its work to amend and enact national legislation such as through the various parliamentary committees.

“The work of the committees is stalled due to the suspended parliament. Hence as the laws to combat the rising crime rates, unrest, violence and acts of terrorism are held up at the committees, we request [the Speaker] facilitate the resumption of Parliament sessions and Committees,” a letter attributed to Riyaz read.

“Article 105 of the Constitution obligates the security forces to assist the speaker.”

When contacted today, DQP Secretary General Abdulla Ameen forwarded Minivan News to Riyaz himself for a response to the letter, however the MP was not answering calls at the time of press.

Meanwhile, a spokesperson for the DQP’s coalition partner the Dhivehi Rayyithunge Party (DRP) said it had not been involved in any talks to resume the Majlis sessions.

DRP Parliamentary Group Leader and MP Dr Abdulla Mausoom nonetheless called on the MDP to give up on its “stubbornness” and respect democratic rights in the nation in order to facilitate parliament resuming its work.

Dr Mausoom did not elaborate on the exact commitments he believed the MDP should make regarding addressing its “stubbornness”.

Meanwhile, MDP MP Ghafoor contended that the suspension of parliament had been the result of an understanding with the speaker concerning “internal security” in the Majlis chamber.

“The Majlis is not a place where you should be forced to remove an MP from chamber, it was not feasible to continue like that,” he said, concerning the atmosphere in parliament leading to the institution’s suspension.

Ghafoor contended that the speaker had decided under existing parliamentary regulation to discontinue holding sessions in the Majlis until a solution to the current unrest could be found through proposed talks between parliamentary leaders.

“Dr Waheed is also invited to join the discussions,” he said. “As far as I know talks are on track.”

Ghafoor claimed that the party had nonetheless committed to calling off it’s “direct action” street protests – conducting on consecutive nights last month as part of aims to “topple” the present government of President Waheed. The MDP alleges the administration of President Dr Mohamed Waheed Hassan came to power on February 7 in a “coup d’etat”.

“Although we are within our right to protest, we have suspended these protest for the last ten days of Ramazan,” he said. “We have done this voluntarily to give enough time for talks to be conducted in the Majlis and this is shaping up well.”

According to Ghafoor, the decision to stop protests during the remainder of the Islamic holy month had been in order to open talks with government-aligned parties and the president within the Majlis to outline a plan to move forward with parliament.

“I believe we are on the right track [regarding recommencing parliamentary sessions],” he claimed. “There is now a ten day window for all parties represented in the Majlis to hold discussions. All the conditions are right for talks to resume.”

Sun Online reported today that discussions were taking place between representatives of the government coalition parties on whether President Waheed should join the proposed discussions between the country’s parliamentary group leaders.

The report added that the president was presently yet to decide on whether he would be participating in talks in line with requests from the opposition MDP.

President’s Office Media Secretary Masood Imad told Minivan News today that aside from the previously proposed all-party talks that were established by as part of a wider roadmap plan announced in February, Doctor Waheed was not presently involved in trying to resolve the issue of parliament’s suspension.

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Former finance chief questions timing of MMA private sector T-bill reform

Former Finance Minister Ahmed Inaz has questioned the timing of the Maldives Monetary Authority’s (MMA’s) decision to offer Treasury Bills (T-bills) to the wider private sector claiming it would compound the country’s budget deficit rather than directly address state debt.

Inaz, who served as Finance Minister under the administration of former President Mohamed Nasheed, said that until the present government put a lid on its expenditure to levels agreed in the national budgets of the last two or three years – extending T-bills to the wider private sector in the current climate would only prolong economic uncertainty.

The comments were made as local media reported yesterday that the Maldives Monetary Authority (MMA) had opted to allow “private groups” to purchase T-bills.

Such bills, which are sold by governments all over the world, serve as a short-term debt obligation backed by sovereign states. In the Maldives, T-bills are said to have a maximum maturity of six months, in which time they must be repaid, according to Inaz.

The economy, particularly national debt, has become an increasingly important issue for the coalition government of President Dr Mohamed Waheed Hassan.

Parliament’s Financial Committee in May released projection that the Maldives’ budget deficit will reach 27 percent of the GDP by the end of 2012, a 175 percent increase on earlier forecasts.

In recent weeks, the government has downplayed delayed payments of civil servant salaries as being the result of a banking “administrative error”, while also admitting to facing “economic difficulties” in covering months of outstanding premium payments resulting from the Aasandha universal healthcare programme.

Yesterday, Abdulla Yameen, parliamentary leader of the government-aligned Progressive Party of Maldives (PPM) told local media that the country was in “dire need” of financial assistance from the international community to help set right the economy.

Yameen and fellow PPM MP and Spokesperson Ahmed Mahlouf were not responding to calls from Minivan News today to clarify the comments.

T-bill extension

Finance Minister Abdulla Jihad said the decision to extend the availability of T-bills to private enterprise was a condition outlined by the Asia Development Bank (ADB) to secure loan funding. He was unable to give the exact amount of the loan at the time of press.

According to Jihad, T-bills had been previously only open to private financial institutions, a market place that he said was presently “saturated” in terms of demand, limiting the amount of T-bills the institutions were willing, or had the capacity, to purchase.

“The issue was to open the market to private groups,” he said.

In regards to criticism from the previous administration about state spending, the Finance Minister pointed to a recent order for all government institutions to immediately reduce their budgets by 15 percent – a pledge Jihad stressed had been successfully realised.

However, former Finance Minister Inaz said by that extending the T-bill scheme without addressing wider concerns of groups like the International Monetary Fund (IMF) over government expenditure, authorities were only prolonging current economic instability rather than tackling the present spending shortfall.

“My reaction to the MMA’s proposals is that issuing T-bills to the private sector or these private groups is not going to help the situation. The budget deficit should be reduced at all costs. Then these T-bills could be introduced as a way to meet capital expenditure,” he said.

“Expenditure should of course not be reduced to a level that would kill off independent institutions and the democratic reform of recent years. But the best way forward is to maintain expenditure say to the levels set in the 2010 or 2011 budget, while increasing income.”

While accepting that current political tensions between the government and the now opposition Maldivian Democratic Party (MDP) made it difficult reach parliamentary agreement, Inaz said that the Majlis would need to agree on any changes to the state budget.

Inaz also called on policy makers to adopt a “broader mindset” by reviewing the present government’s decision, announced earlier this year, to restore import duties and reduce GST.

He believed that taxation measures such as the GST remained the easiest solution to boosting revenue.

Inaz contended that a focus on more direct taxation would allow the government to serve as a facilitator to encourage the private sector to generate economic activity.

T-Bill reliance under Nasheed

Despite concern over the timing of the MMA’s proposals, Inaz conceded that the previous administration had itself relied on debt financed through the sale of T-bills that amounted to about Rf 1.4billion in 2011. However, he claimed that the final budget passed under the Nasheed government in December 2011 was designed to reduce the nation’s budget deficit, while also cutting down on short-term debt obligations such as T-bills.

“The T-bills issued in 2011 amounted to Rf1.4 billion (US$90.8 million). We foresaw the need growing every year, but this is very difficult to maintain as the maximum maturity for T-bills is six months, during which time they must be paid back,” he said

However, Inaz added that before the controversial transfer of power in February that brought President Waheed into office, the Nasheed government had pledged to reduce its reliance on T-bills by focusing on generating revenue through economic reforms such as GST.

“This year though we were set to reduce our reliance on T-bills to about Rf 700 million (US$45.4 million) with a view to cutting back completely through repayments in the next two years or so.”

Local media reported in April last year that government debt accrued through the sale of T-bills to banks and financial enterprises was estimated to be equivalent to more than a third of this year’s Rf 12 billion (US$778.2 million) national budget, according to Maldives Monetary Authority (MMA) figures released at the time.

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Government must assess financial, investor impacts of airport renationalisation: Thasmeen

The Dhivehi Rayyithunge Party (DRP) has called on the government to consider the potential financial repercussions and impact on investor confidence should it renege on a contract with Indian infrastructure group GMR to develop Ibrahim Nasir international Airport (INIA).

DRP Leader Ahmed Thasmeen Ali today said the party had asked the current government to assess the possible implications of cancelling the GMR agreement in three key areas before his party decided on whether to agree to proceed with renationalising INIA.

An agreement now thought to amount to US$511M was signed between GMR and the previous government of Mohamed Nasheed in June 2010 to manage and build a new airport terminal by 2014, as well as renovate the existing airport facilities in the meantime

The deal, the largest single financial investment in the Maldives’ history, has since faced several protracted legal disputes resulting this month in the infrastructure giant referring a disputed US$25 Airport Development Charge (ADC) included in its contract to a court of arbitration in Singapore.

Several pro-government parties – including the DRP, the Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – advised President Waheed in June this year that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised.

The agreement endorsed six main points which included taking legal action to prevent the government’s decision to award the contract to GMR.

Thasmeen’s comments today about assessing the potential impacts of terminating the contract were made as Progressive Party of Maldives (PPM) Deputy Leader Umar Naseer alleged in local media that the DRP was now the “main obstacle” to the state resuming management of the airport.

The PPM is a coalition partner of the DRP in the government of President Dr Mohamed Waheed Hassan.

According to newspaper Haveeru, Naseer contended that an invitation from Indian Prime Minister Manmohan Singh to meet with Thasmeen this week was directly related to the GMR airport dispute.

With the Maldivian Democratic Party (MDP) and the PPM respectively holding the majority and minority leadership roles in parliament, he questioned the reason for Thasmeen’s invite other than discussing the airport case.

“I do not think this trip is related to anything else. The DRP not the main opposition anymore as everyone knows. Even if it is taken in an official manner, the parliament minority leader is from PPM,” Naseer was quoted as saying.

Naseer also claimed that President Mohamed Waheed Hassan’s government wanted to reclaim the management of the airport from GMR – a pledge he hoped would be carried out even without the support of the DRP.

An Anti-Corruption Commission (ACC) investigation into allegations that DRP Leader Thasmeen and Parliamentary Speaker Abdulla Shahid accepted US$1 million in bribes from GMR was last year reported to have “investigated thoroughly”, both men were cleared of wrongdoing over the case.

Thasmeen, Shahid and GMR have all vehemently dismissed the allegations of bribery.

Responding to Naseer’s claims today, Thasmeen told Minivan News that his recent visit to India was the result of a long-standing invitation by the Indian government to discuss a number of issues including the current political situation in the Maldives. He added the visit had not been related to GMR’s dispute with the government.

Thasmeen was not drawn into whether the issue of the GMR contract formed part of discussions, adding only that the prime minister had shown a desire for long-term stability in the Maldives during the talks.

“He was clear in his desire to see a resolution to the current political problems in the Maldives,” he said.

In addressing the issue of GMR, Thasmeen claimed that the DRP has already responded to a request by President Waheed for the views of his coalition government on how to proceed over the matter of the GMR case – but had yet to decide on possible renationalisation.

“In making a decision on this case and the GMR contract, there are three things to consider. These are the impacts on investor confidence from pulling out of such a deal,  the impact this will have on bilateral relations with friendly nations and the extent of the financial repercussions from terminating such a contract,” Thasmeen claimed. “What sort of compensation might there be for example?  The government is best placed to make such an assessment and we will wait for it to do so before making a decision on the case.”

While GMR has pledged to have the new terminal open by July 1, 2014 “irrespective” of outside issues, the Maldives government has pledged to back the will of parliament should it decide on re-nationalising the project.

The relationship between the airport developer and the government soured further late last month after the government temporarily called for a halt to work on the new airport terminal, alleging it had “violated rules and regulations” by not acquiring certain permissions from the Civil Aviation Authority.

In a statement, the infrastructure giant said the GMR Malé International Airport Private Limited (GMIAL) joint venture company had obtained “requisite approvals” under the regulations at the time construction commenced, but had since been asked to seek further approval from authorities.

“We have received a letter from Maldives Civil Aviation Authority asking us to seek its approval pursuant to a recent regulation, for the construction works related to the proposed new Passenger terminal building. Pending the approval, MCAA has directed stoppage of the said works,” GMR stated. “This has no impact on the operations of the airport at the existing terminal.”

Amidst claims by Attorney General Aishath Azima Shakoor that the “doors for dialogue” were still open over resolving the matter of the ADC case, a GMR spokesperson told Minivan News today that the company was not able to comment if fresh discussions with the government were taking place.  Shakoor was not responding to calls by Minivan News at the time of press.

The attorney general told Sun Online that the company could be waiting for up to two years for a resolution to the ADC court case in Singapore. She claimed that discussions between the company and the government remained the “best way” to resolve the issue therefore.

Compromise

Earlier this year, GMR said it had sought to compromise with the government by offering to exempt Maldivian citizens from paying the ADC. However, the Transport Ministry continued to demand that the infrastructure giant repay US$8.2 million deducted from the concession agreement.

Under the concession agreement, a US$25 Airport Development Charge (ADC) was to be levied on all outgoing passengers to part-fund the airport development.

However, while in opposition, the Dhivehi Qaumee Party (DQP), led by Dr Hassan Saeed, now President Dr Mohamed Waheed’s special advisor, and Dr Mohamed Jameel, now Home Minister, filed a successful case in the Civil Court in December 2011 blocking payment of the ADC on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government as a stopgap measure agreed to deduct the ADC from the concession fees payable by GMR, while it sought to appeal to verdict.

As a result, Dr Waheed’s government received only US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time the country is facing a crippling budget deficit, a foreign currency shortage, plummeting investor confidence, spiraling expenditure, and a drop off in foreign aid.

According to financial statements sent to MACL and released to local media, in the second quarter of 2012, GMR deducted the ADC revenue of US$7.1 million from total revenues of US$5.6 million, leaving the government with a bill for US$1.5 million.

Managing Director of MACL Mohamed Ibrahim told local newspaper Haveeru at the time that the government would not pay the amount, alleging that GMR’s deduction of the ADC from the revenue was illegal.

In its defence, MACL has said that its board of directors had been reformed with the arrival of the new government, and a decision made to annul the old board’s agreement to deduct the ADC revenue.

The government meanwhile sought to invalidate the GMR contract – and the clause invoking arbitration – by challenging the handling of the bidding process by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private development sector in developing countries.

“The advisory work was supported by AusAid (Australia), the Ministry of Foreign Affairs of the Netherlands, and DevCo. DevCo is a multi-donor program affiliated with the Private Infrastructure Development Group and funded by the UK’s Department for International Development, the Ministry of Foreign Affairs of the Netherlands, the Swedish International Development Agency, and the Austrian Development Agency,” the IFC explained, following a visit by the delegation in June to address the government’s concerns.

Following the first quarter deduction, GMR announced an employee benefits scheme converting 50 percent of employee salaries to US dollars from July onwards, and a one-percent profit-share.

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Parliament agrees to extend General Regulations Act in spite of Majlis suspension

Parliament briefly reconvened today despite its ongoing suspension, as both government-aligned and opposition MPs agreed on extending the General Regulations Act until April 2013.

The General Regulations Act – parent legislation for 47 regulations governing a number of government and party political functions – was due to elapse at midnight today creating fears of a potential “legal void”.  This was avoided after the act was renewed with cross party support in a brief Majlis session held following discussions between the country’s key political parties in recent days.

However, the government-aligned Dhivehi Rayythithunge Party (DRP) has said that “no party in the country” stood to gain from the continued political deadlock that saw parliament suspended indefinitely last week amidst forced cancellations.

Despite the Majlis suspension, 48 MPs out of 51 present in the chamber voted in favour of extending the regulations contained in the General Regulations Act during this morning’s session.  The session was concluded with a vote 15 minutes after commencing.

Both Parliamentary Speaker Adbulla Shahid and his deputy, Ahmed Nazim, were not responding to calls by Minivan News at the time of press following today’s vote.

General regulations

The General Regulations Act was passed prior to the adoption of the new constitution on August 7, 2008 as a parent legislation for over 80 regulations without a statutory basis, or were not formulated under an Act of parliament. These included regulations for political parties, freedom of assembly, criminal justice procedures, companies and finance leasing transactions, insurance, jails and parole, freedom of information and building codes.

Article 271 of the constitution states, “Regulations derive their authority from laws passed by the People’s Majlis pursuant to which they are enacted, and are enforceable pursuant to such lawful authority. Any regulations requiring compliance by citizens must only be enacted pursuant to authority granted by a law enacted by the People’s Majlis.”

The parent act prolonged the lifespan of the regulations for a one year period until new legislation, such as a Criminal Procedures Act, Evidence Act, Freedom of Information Act and Political Parties Act, could be enacted.

The act provided for further extensions based on recommendations by parliament’s Rules Committee. The last extension was approved in December 2011.

Addressing today’s vote, DRP Deputy Leader Ibrahim Shareef said that the parent act has been renewed every year since the new constitution came into affect to ensure government was able to function correctly – with parliament failing to have to passed certain key legislative requirements.

Despite the approval, Sharref claimed that “any political party” seeking to stall the Majlis from functioning had nothing to gain beyond adding to current public disillusion with the current democratic process in the nation.

“It is not for the good of the nation for any one political party to stall parliament. The parliament must work efficiently, as it is the only place where we as politicians can debate,” he said. “I believe that parliament must find a solution quickly [to the current Majlis deadlock] as there is much disillusion among the public who had believed democracy was designed to solve problems.”

Shareef contended that in the current environment, “many people” in the country appeared to be questioning the direction of democracy in the Maldives.

“I am not sure whether people may have been expecting too much? I wouldn’t like to say. But right now what has democracy brought us? The nation is polarised as it never has been before, where even some families are not speaking due to political divides,” he said.

“Something somewhere appears to have gone terribly wrong with democracy. It is not enhancing welfare or development here.”

When questioned as to the possible solutions to apparent public apathy regarding parliament’s work, Shareef claimed it was the duty of all parties to return to negotiating through the Majlis to try and settle political differences without hindering legislative process.

“All the main parties need to understand that the country is going down the drain right now,” he said. “No one party to stands to gain in the present environment and they need to help find a solution and stop inciting violence, by putting forward an agenda.”

While not naming a specific party, Shareef’s calls to stop “inciting violence”, were made as President Dr Mohamed Waheed Hassan’s government – with whom the DRP serves as part of a coalition government – said is would not not consider reconvening talks with opposition leader, former President Mohamed Nasheed until threats of violence ceased.

Nasheed and the Maldivian Democratic Party (MDP), which represents country’s only elected opposition, said last week it would not rule out halting ongoing protests to facilitate fresh “high-level talks” with its political rivals. However, the party said it would only do so if it obtained  “substantial” commitments from government-aligned parties.

Proposed “Roadmap” talks were launched in February with the stated aim of overcoming the political deadlock resulting from the controversial transfer of power that brought President Dr Mohamed Waheed Hassan into office. Former President Nasheed and his party continue to allege that Waheed came to power in  a “coup d’etat” – and that the government is illegitimate.

MDP MP and Spokesperson Hamid Abdul Ghafoor told Minivan News last week that while the party’s protests which it maintains are “largely peaceful”, were “totally within” the law, it would not be a “big deal” to stop the street demonstrations if it would help secure meaningful talks.

However, Ghafoor claimed that the party was ultimately sceptical over the commitment of government-aligned parties to ensure “substantial” and “worthwhile” dialogue.

“We have always maintained dialogue is the best way to proceed in the current situation,” he claimed. “What we have seen in the last party talks has just been ridiculous demands such as the issues about keeping crows and using black magic. We found out as a party that we are not dealing with serious people.”

The last round of the UN-mediated talks, held at Vice President Waheed Deen’s Bandos Island Resort and Spa in early June, collapsed after parties aligned with the government presented the ousted Maldivian Democratic Party (MDP) with a list of 30 demands.

The list included calls that the MDP “stop practising black magic and sorcery”, “stop the use of sexual and erotic tools”, and “not walk in groups of more than 10”.

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