GMR announces dollar payments to employees as ruling parties continue call for nationalisation

Additional reporting by JJ Robinson

Despite recent government assurances that Indian investments in the Maldives would be protected, parties in the now ruling coalition have renewed calls for the airport to be nationalised.

Indian infrastructure company GMR has meanwhile informed staff that it will pay 50 percent of employee salaries in US dollars from July onwards, as part of the new employee benefits scheme. Further benefits announced include the payment of Ramadan bonuses in US dollars, and a profit-sharing scheme awarding employees a one percent share of the company’s profits from 2011.

The decision follows a week in which former opposition parties – now in a coalition government following the controversial transfer of power of February 7 – sent replies to President Mohamed Waheed Hassan’s request for opinions on the airport, the development and management of which was taken over by GMR in 2010 in a 25 year concession agreement signed with the now-opposition government.

The pro-government parties – including the Dhivehi Rayithunge Party (DRP), Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – advised Waheed that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised – the  ‘Joint Statement by political parties opposing government’s efforts to hand over the Male’ International Airport to a foreign party’.

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

GMR’s contract is currently under scrutiny by a committee appointed by President Waheed, which includes the Attorney General, the Finance Minister and the CEO of Maldives Airports Company Ltd (MACL).

A delegation from the International Finance Corporation (IFC) – a member of the World Bank group and the largest global institution focused on private sector in developing countries,  which brokered the deal between GMR and the government of Maldives – recently addressed the government’s concerns over the concession agreement in a meeting with senior government officials.

The DQP – a small but extremely vocal party which has consistently opposed the airport deal and filed court cases against it – today accused the IFC of mishandling the bid evaluation report of the airport privatisation agreement. A 24-page book released by the DQP while it was in opposition presents the government’s lease of Ibrahim Nasir International Airport (INIA) to developer GMR as a threat to local industry that will “enslave the nation and its economy”.

“IFC is a company associated with GMR in many other projects. It is clear that IFC had issued loans to GMR on other projects. We believe that the government selected IFC to facilitate GMR for the airport project,” an anonymous party source told newspaper Haveeru.

President’s Office Spokesman Abbas Adil Riza said the airport contract is “an important national issue” which “must be dealt with after discussions with coalition partners.”

However, speaking at the ceremony to mark the 100th day of his administration, President Waheed said he did not wish to involve “political disputes” in reviewing the GMR contract and that foreign investments must be handled as business dealings.

“I do not believe bringing in our political quarrels into the GMR issue will be good for our future and our economy,” said the President.

During President Waheed’s recent trip to India, he also assured Indian Prime Minister Manmohan Singh that the Maldives government would adhere to all agreements between Indian and Maldivian businesses and expressed the Maldives’ desire for further Indian investment in the country.

“My government is a continuation of the previous government under then President Nasheed, and hence there should be no doubt on this score,” he was quoted as telling Manmohan Singh in the Daily News.

In addition, during the India trip, Maldives Foreign Minister Dr Abdul Samad Abdulla assured his Indian counterpart that all existing investment agreements would be honoured despite the change of government on February 7.

According to Indian newspaper The Hindu, Samad assured Indian External Affairs Minister S.M. Krishna that the government’s policy was unchanged, after his counterpart expressed the desire that the Maldives remained friendly to outside investors.

Hostile politics

Despite these assurances, the revelation that major political parties now in government continue their endorsement of airport nationalisation, and challenging of the IFC’s competency, could increase tensions between the government and GMR and weaken investor confidence in the Maldives – at nearly US$500 million, the airport concession agreement is the country’s single largest foreign investment.

Declining to comment on the official standing of Dhivehi Rayyithunge Party (DRP) on the GMR deal, the party’s Deputy Leader Dr Abdulla Mausoom said the DRP was against privatising “assets of national importance”.

Jumhoree Party (JP) Spokeman Moosa Rameez said the party had written to the President stating their wish to adhere to the agreement signed between the then opposition parties.

Although the parties in the government had expressed several concerns including “threats to national security” in “giving away the airport to foreigners”, the government’s current concerns are focused on the disputed concession fees in the agreement.

Under the concession agreement in the GMR contract, a US$25 charge was to be levied as an airport development charge (ADC) on all outgoing passengers to part-fund the infrastructure project.

However, while in opposition, the DQP – which today forms part of Waheed’s national unity government – filed a successful case in the Civil Court in December 2011 to block the payment of the charge, on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government had 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.

In April, Finance Minister Abdulla Jihad declared that the Maldives Airport Company Limited (MACL) would be unable to continuing paying the ADC without risking bankruptcy.

The Transport Ministry has since ordered GMR to pay the shortfall in concession fees. In response, GMR in early May “expressed a desire to exempt Maldivian citizens from the ADC”, as “the majority of Maldivians travel abroad for the purposes for healthcare and education.”

“The ADC was conceptualised and incorporated into the concession agreement by the government to yield a maximum return to the Maldives while ensuring development of the airport and a reasonable return to the successful bidder,” GMR said, in a statement at the time.

“We are sensitive to the apprehensions expressed regarding ADC; and would like to assure all concerned that the management of GMR Male International Airport is doing everything possible by offering viable options to reduce the impact on the Maldivians, thereby helping the government for the ADC implementation.”

GMR has expressed confidence in the strength of its contract, which has a facility for dispute arbitration in Singapore, as well as an option for the government to buy out the agreement – a cost likely to reach several hundred million dollars.

However the country is already facing a crippling budget deficit of 27 percent, a plunge in expected revenue of 23 percent and an increase in spending of almost 24 percent, a time when investor confidence has been impacted by repeated challenges to the government’s legitimacy by the MDP.

Earlier this week the government refused to comment on claims made in local media by JP Gasim Ibrahim that the Maldives was now bankrupt and already unable to pay some civil servants.


Fisheries Ministry audit reveals mismatched expenses, widespread abuse of fuel subsidies

The Auditor General’s report on the Fisheries Ministry for 2010 reflects “differences in interpretations” rather than actual fraud in the ministry, Minister of State for Fisheries and Agriculture, Dr Hussein Rasheed has claimed.

Dr Hussein Rasheed served as the Ministry’s Finance Executive from 2010 to 2012.

Parliament’s Finance Committee is currently investigating issues raised in the audit report published earlier this year. The committee on Tuesday summoned Fisheries Minister Ahmed Shafeeu and senior officials of the ministry for questioning.

Committee members expressed concern over the audit report findings. Committee Chair Ahmed Nazim said there was a “systematic problem” in the ministry, while MP Abdul Ghafoor Moosa said “nothing had gone right”.

The Auditor General’s report highlighted several cases of the ministry’s failure in adhering to financial laws and regulations.

Issues raised in the report include discrepancies between financial reports submitted by the ministry for audit and actual expenses records kept by the ministry, reporting of unspent figures as expenses in the ministry’s financial report, failure to collect fines and other money owed to the state, bypassing bidding and tender processes in awarding projects, and irregularities in releasing fishing subsidies, among other things.

The disparities between financial statements submitted by the ministry and financial records at the ministry amount to a difference of more than Rf 4 million (US$260,000). The audit report said the ministry had reported unspent money in bank accounts and safes across different atoll and island offices as expenditure in the finance report.

However Rasheed said the ministry considered money deposited to island and atoll accounts for different projects as expenses.

“We record them as expenses after dispersing the money to the atolls. But the Auditor General considers it spent only after the money reaches the pockets of who it was meant for. The money is there in the accounts. It is not lost. This is just a matter of difference in interpretation,” said Rasheed.

He further said that although the ministry had officially responded to the draft audit report sent by the Auditor General, the ministry’s comments did not seem to have been considered in the final audit report.

“We cleared a lot of issues in our response. But the public is only exposed to the contents of the audit report which does not include any of the ministry’s comments. I am quite sad at the distortion of truth by some critics that has unjustly affected the ministry’s reputation,” said Rasheed.

The audit report expressed concern over the failure of the ministry to take action against bad contractors. It stated that in several cases where contractors had failed to finish the project on time, despite several deadline extensions, the ministry had not taken any action to collect fines and liquidated damages owed to the ministry by law.

The report also said the ministry had made payments to contractors without adequate evaluations of their work and to parties who did not meet the required standards for projects.

Rasheed said some of the contracts were signed before the change of government in 2008 and their contents did not always allow the ministry to take action.

Regarding the missing contents in the ministry’s safe, recorded in the audit report, Rasheed said he was confident that “under my authority and knowledge, nobody took away any money.”

“The auditors emptied the contents of the safe on a table which had books and other things already on it. That day they concluded that one envelope was missing from the safe but we later found it and informed the Auditor General’s office,” explained Rasheed.

Commenting on the accusation that the ministry had failed to properly maintain attendance records, Dr Rasheed said the audit report was compiled when the ministry had just started using a new security system after shifting to Velaanaage. He said the system registered staff going out even if they went to the adjacent office to use the bathroom. However despite the use of this system, attendance records were still kept as an Excel spreadsheet.

In 2010 the Majlis allocated 100 million rufiya as fuel subsidies for fishermen. According to Fisheries Ministry records, 75 million rufiya (US$4.8 million) was released as fuel subsidies to fishermen. Some of the concerns raised in the audit report included releasing fuel subsidies to fishing boats without collecting any data of fishing trips made, and the issuing of subsidies to non-fishing vessels such as passenger boats.

The Audit Office took a random sample of 168 boats which collected fuel subsidies on a specific date, and discovered that only two of the boats went fishing on that date despite collecting the subsidy.

Dr Hussein Rasheed said releasing the subsidies was based on the declarations made by the fishermen as it was currently impossible to confirm whether a specific boat went fishing before collecting the fuel money.

“This is a very important issue and we raised this concern even when the initial discussions about the subsidy were held in the parliament. The only way I can think of is installing a tracking device on the boats. Like we have said before, we can’t keep a policeman on every fishing boat,” said Rasheed.

The fishermen are required to fill both sides of a subsidy slip available from the ministry to collect the subsidy. The audit report also highlighted 3543 missing subsidy slips printed by the ministry.


STO to purchase three resort islands to generate dollars

State Trading Organisation (STO) has announced it will venture into the Maldives tourism industry in order to increase its access to foreign currency.

The STO is the Maldives’ state-owned importer, and is the primary supplier of general goods, fuel and pharmaceuticals to the Maldives. It also supplies aviation fuel to Ibrahim Nasir International Airport (INIA).

STO Managing Director Shahid Ali said the company needed to purchase “at least three resorts and one hotel”, to meet its demand for foreign currency at a time the country was facing a ongoing dollar shortage, according to newspaper Haveeru.

The Maldives grapples with a foreign currency deficit due to a heavy import-export imbalance. Goods from overseas must be purchased with foreign currency, but the Maldives has little ability to earn this outside the resort industry.

The industry typically pays salaries in local currency, while most of the its banking is conducted outside the country in financial hubs such as Singapore. The properties also charge directly in US dollars bypassing the rufiya altogether, a practice which is technically against the country’s monetary legislation but is unenforced by the central bank. As a result, the wider Maldives economy sees little of the dollars that tourists bring into the country, and importers must rely on the fluctuating blackmarket for rufiya-dollar transactions.

“We are trying to a find a way to earn the foreign currency we need without relying on another party for it,” Shahid Ali told Haveeru. “Venturing into the tourism industry is the way to achieve that. We need to own at least three resorts for this,” he said.

The STO board is currently reviewing resort islands for purchase, and a decision is yet to be made on which islands will be bought.

STO Spokesperson Ismail Sadiq had not returned calls at time of press.

The company is currently building a 5-star hotel on  Hulhumale under a contract with USA-based multinational travel company, Carlson Group. The hotel project started in October 2011, although the contract was signed between STO and Carlson in 2008. Shahid said at the time that the delay was due to financial constraints.

The STO was initially formed in 1946 as a fully state-funded business, in the name of Athireemaafannu Trading Agency (ATA), with the task of purchasing and importing essential food items in bulk to be distributed nationally via local traders and their own retail outlets. It was later expanded and rebranded as the State Trading Organisation.

The STO is not the first government entity to venture into the tourism industry. In February 2010 the Maldives Tourism Development Corporation (MTDC) – another public company investing in the tourism industry – paid US$3.5 million to end a long-running court dispute with former management of Herathera, Yacht Tours, after the company stopped paying rent and claimed the MTDC had failed to fulfil a contractual obligation to build a channel between the resort and the adjoining island of Hulhudhoo.

MTDC agreed to pay Yacht Tours the money to end the dispute due to spiraling costs: at one stage, 600 staff had been employed to look after 28 guests.


President launches Baa Atoll UNESCO Biosphere Reserve

President Dr Mohamed Waheed Hassan on Wednesday officially launched the Baa Atoll UNESCO Biosphere Reserve and Baa Atoll Conservation Fund at a special ceremony held in Eydhafushi.

The President, in his speech, appealed for support from everyone in protecting the environment.

“Discussions about the biosphere came in August 2009 when I was still the Vice President. I advised that this should be done with suggestions from the people of Baa Atoll,” said the President.

Speaking at the ceremony, Minister of Environment and Energy Dr Mariyam Shakeela remarked that Baa Atoll obtaining the status of a UNESCO Biosphere Reserve was a source of national pride to Maldivians. She said that the Biosphere Reserve is a Maldivian contribution to the global effort to conserve the environment.

In the ceremony, Azusa Kubota from UNDP handed over a cheque for US$250,000 as a contribution to the fund, on behalf of the Global Environment Facility (GEF). Permanent Secretary of the Ministry of Finance and Treasur,y Ismail Shafeeq, also handed over a cheque for US$50,000 dollars to the fund.

The Baa Atoll Conservation fund will be used to finance projects to conserve the environment in Baa Atoll as well support livelihood activities. The fund is a collaborative effort between the Global Environment Facility (GEF) and the Ministry of Environment and Energy.

In her speech, Azusha Kubota said the Conservation fund is the first of its kind in the country and marked an important milestone for the people of the Maldives.

Tourist resorts in Baa Atoll, including Soneva Fushi, Coco Palm, Four Seasons and Anantara and several other resorts have pledged to donate to the fund.

On his trip to Baa Atoll, the President also officially opened the Baa Atoll Biosphere Reserve Office, which will manage and develop the reserve. The office will function under the Ministry of Environment and Energy.

One person from Eydhafushi was arrested following clashes between police and Maldivian Democratic Party (MDP) supporters who had tried to cross into the police cordoned area. The President received a warmer welcome from supporters who lined up near the jetty further away from the MDP protesters.

Baa Atoll, which includes Hanifaru Bay, an area world-renowned for sighting whale sharks and manta rays, was declared a UNESCO Biosphere Reserve in June 2011, after more than five years of lobbying by the government.

The process which led to the declaration was supported by the Atoll Ecosystem-based Conservation (AEC) Project, led by the government with support from the UNDP and funding from the GEF. The AEC works to establish protected areas and promote economically and environmentally sustainable livelihood practices for ecosystem conservation in Baa Atoll.

The project received US$2.7 million dollars from the UNDP and US$1.3 million dollars from GEF.

World Biosphere Reserves are places where conservation, research and development successfully interconnect. They integrate biological and cultural diversity, combining core protected areas with zones where sustainable development – and innovative approaches to it – are fostered, tested and developed by locals and enterprises alike.


Transparency Maldives launches free legal assistance for victims of corruption

Victims of corruption in the Maldives can now seek free legal assistance from experts at a new centre launched yesterday.

The “Advocacy and Legal Advice Centre” (ALAC) established by Transparency Maldives and funded by the government of Australia, will offer assistance and legal advice for both local and foreign victims of corruption in the Maldives.

Victims and witnesses of corruption can call the centre’s toll free number – (800) 300 3567 – and lodge their concerns and complaints anonymously.

The ALAC aims to provide legal assistance to victims and abolish corrupt practices in the nation through collaborations with relevant government and state institutions, private organisations and individuals and other stakeholders.

A Memorandum of Understanding has already being signed between the Anti-Corruption Commission (ACC) and the centre. Further negotiations are ongoing with 18 different organisations including the Elections Commission, Civil Court, Local Government Authority, Police Integrity Commission and Maldives Customs Service to discuss ways to collaborate in the centre.

Speaking at the ALAC launching ceremony, President of the ACC Hassan Luthfy welcomed the initiative to open the centre and called on stakeholders to lend their support to make the effort a success.

“The ACC stands to gain the most benefit from ALAC. The centre would make the commission’s work a lot more efficient,” Luthfy said.

Luthfy also expressed his satisfaction with the NGO in general adding that the ACC had received the most assistance from Transparency Maldives since the commission was formed.

Speaking at the ceremony, Executive Director of Transparency Maldives Ilham Mohamed highlighted the importance of assistance from relevant institutions in the advocacy projects currently undertaken by the NGO.

Transparency Maldives is currently in the process of formulating a new Anti-Corruption bill, Right to Information bill, Transparency in Political Party Financing bill and a bill on increasing transparency in the Decentralisation programme.

“While we are working on these bills it is very important for different people to offer their input into the process. We need more people to discuss their ideas with us, more debates on public forums or in the media. It would make the bills more complete,” said Ilham Mohamed.

The ALAC will also address issues related to labour authorities and human trafficking – one of Transparency Maldives’ “biggest concerns” at present.

Project Director of Transparency Maldives, Aiman Rasheed, said “the whole system [of expatriate labour] is just so corrupt. So we have an agreement to bring a member of staff from Transparency Bangladesh here over the next year to help us deal with complaints from Bangladeshi workers,” he said.

The Maldives rose slightly to rank 134 in Transparency International’s Corruption Perception Index (CPI) for 2011, a mild improvement on 2010 when the Maldives was ranked 143th – below Zimbabwe.

Rasheed said at the time that the ranking could not be compared year-to-year, especially in the Maldives where there were only a three sources used to determine the index (India has six).

“Corruption in the Maldives is grand corruption, unlike neighbouring countries where much of it is petty corruption,” Rasheed said. “In the Maldives there is corruption across the judiciary, parliament and members of the executive, all of it interlinked, and a systemic failure of the systems in place to address this. That why we score so low.”

Maldivians voted in the country’s first democratic elections in 2008 bringing an end to the 30-year rule of President Maumoon Abdul Gayoom. The first democratically elected President resigned in February following mutiny from security forces allegedly loyal to the former dictator.


Five arrested for fornication in beauty salon raid

Police have arrested four Thai women and one Maldivian man on suspicion of sexual misconduct during a raid of a beauty salon in Male’ on Saturday.

Police raided the ‘Sabai Salon’ on the fourth floor of Ufuriyaage in the Galolhu ward of Male’, the ninth salon to be shut down for prostitution charges since February 2012.

Police Sub-inspector Hassan Haneef said the women arrested were mostly foreigners and faced deportation, whereas the Maldivian nationals are “given advice” in most cases.

“It is difficult to charge them with fornication as the law requires eyewitnesses,” said Haneef.

Islamic Minister Sheikh Mohamed Shaheem Ali Saeed in May claimed the ministry possessed a list of suspected brothels on inhabited islands, “most of which have already been shut down.”

The Ministry of Islamic Affairs last month said it was formulating rules and guidelines for registering and operating alternative medicine centres, spas and beauty salons to prevent the use of such establishments as a front for prostitution.

The new regulations, to be drafted by a technical committee comprising of representatives from police and relevant ministries, would expand the role of the Islamic Ministry in monitoring the businesses, according to the Islamic Ministry.

Shutting down brothels masquerading as spas and massage parlors was a key demand of a ‘mega protest’ on December 23, organised by eight political parties and religious NGOs to ‘Defend Islam’ against the allegedly liberal policies of the ousted Maldivian Democratic Party (MDP) government.

Adhaalath Party President Sheikh Imran Abdulla had claimed during the December 23 demonstration that over 60 brothels were in operation in Male’ alone, double the number of mosques in the capital.

Earlier this week, three Maldivian men and a Sri Lankan man were arrested along with three Thai women for suspected prostitution inside “Shaaha Alternative Medical Centre” in Male’.

In May, two people were arrested at “New Age” beauty salon for sexual misconduct.

In April police arrested two Thai women and two local men on prostitution charges after raiding a Male’-based business called ‘Maldivian Care’.

In March police arrested five Thai nationals and three male Maldivians inside ‘Herbal Beauty Salon’, located on the second floor of Maafannu Sherrif.


Government to issue fishing subsidy upon Majilis approval

Fishermen will start receiving the 100 million Rufiyaa (US$6.4 million) fuel subsidy allocated to them in the 2012 state budget as soon as Parliament approves revisions proposed by the Fisheries Ministry, the government has said.

Speaking at a press conference on Wednesday, Minister of Fisheries and Agriculture Ahmed Shafeeu said subsidising fuel for fishing vessels would “incentivise” many fishermen who are currently unable to fish due to high fuel prices.

“A lot of fishermen now use larger fishing boats which require more fuel. So they opt not to make trips if they can’t get a good catch after burning so much fuel. The fuel subsidy will encourage more people to go fishing,” said the minister.

Shafeeu said fishing in the Maldives has declined by more than half from approximately 185,000 tonnes of fish caught in 2006 to about 70,000 in 2011.

“It is very important to assist the fishermen as it affects the livelihood of many people. Also, this needs to be done in order to sustain the industry and increase fish exports as there is a risk of losing some markets,” he explained.

This year’s subsidies, unlike previously, will be given based on the horsepower (hp) of the fishing vessel instead of the size of the vessel. Registrations are open until June 7 for fishing boats to apply for subsidies, according to the ministry.

The former administration withheld releasing the subsidy citing insufficient funds in the state budget for the fishing subsidy. Former Minister of Finance Ahmed Inaz told the Parliament in October 2011 that the state would have to reduce other subsidies to issue Rf100 million as oil subsidies for fishermen.

Governor of the country’s central bank Fazeel Najeeb last month said the Maldives was facing its worst economic crisis in recent history. Parliament’s Finance Committee revealed in May that expected revenue for 2012 had plunged 23 percent – a shortfall of US$168.6 million, leaving the country with a budget deficit of 27 percent.

Fisheries Minister Shafeeu said although the state is in debt, the 100 million must be released to fishermen since  Parliament had allocated the money for fishing subsidies in the state budget.

Former CEO of the Maldives Industry of Fisheries Corporation (MIFCO) Adil Saleem, who also held the position of Transport Minister in the former government, said encouraging a subsidised industry “completely reverses” of the former government’s policies, although he said it was important for fishermen “in the current situation.”

“Subsidising is wrong,” Saleem said, arguing that it did not address the core problems in the industry and is “not the solution for a sustainable industry.”

“Coup financiers are shaping the industry so that the fishermen act as their staff, going fishing everyday on subsidised fuel,” said Saleem.

However, he noted the fishermen are currently in “desperate need” of assistance due to the low prices they get for the fish, and said the subsidies should be released to them as a short-term measure.

“An election is what we really need,” Saleem said.


Sixty resort islands in limbo after political turmoil strikes CSR programme

The government has refuted local media reports that it is considering halting the lease of 60 islands award for resort development by the former administration.

The islands in question were to be leased under a Corporate Social Responsibility (CSR) tourism programme initiated by the former government. The programme faced heavy criticism from the start, especially from opposition figures now senior officials in the current government.

Critics alleged that the CSR programme was against the law as the islands were awarded in the absence of an open bidding system, and had favored Maldivian Democratic Party (MDP) members.

The National Planning Council (NPC) – formed by the previous government and currently “under review” – leased islands for resort development to interested individuals, with the condition they undertook a development project on an inhabited island, such as building water and sewerage systems.

The development project had to be completed to an “acceptable level” on an island of the government’s choice within an allocated time frame, before the resort would be leased for development. In addition, the resort would be owned by a joint-venture company formed between the state and the resort developer,  with the government holding a five percent share of the company.

The NPC had awarded contracts to at least 10 parties to develop 10 different islands. The fate of these contracts are still unclear as the potential resort developers await a decision by the government. The government, in turn, claim to be waiting for the Anti-Corruption Commission (ACC) to make a decision.

“The issue is not in our hands now. There are some legal issues to be addressed. Even the 10 islands with contracts might be cancelled. We will decide on it once the ACC gives its recommendations,” said the Minister of Tourism, Ahmed Adheeb.

Meanwhile,  local newspaper Haveeru on Monday reported a “prominent” tourism ministry official stating that the government had decided not to lease the islands awarded “without bids”, in line with the ACC’s recommendations on the issue. Around 60 of the awarded islands will no longer to be leased, according to Haveeru.

“We have decided to cancel the proposals of the islands without agreements. In addition, a decision pertaining to the islands where agreements have been made will be taken after the ongoing discussions with the ACC,” the official told Haveeru.

President of the ACC, Hassan Luthfy denied reports that the commission had specifically ordered the NPC to discontinue the CSR programme.

“During the former administration, we recommended the NPC award all projects within an open bidding system. It did apply to the CSR programme but we did not specifically ask for the CSR projects to be stopped,” Luthfy told Minivan News.

The ACC began investigating the CSR programme in May 2012 and a decision is yet to be made.

Speaking to Minivan News, member of the NPC and former Economic Minister Mahmoud Razee defended the CSR-programme.

“The  programme did not break the law. The tourism law allows two options by which resort islands can be leased: either through the bidding system or by the government holding a share of the company owning the leased resort,” said Razee.

He further claimed the CSR programme was more egalitarian and would enable more people to be involved in the tourism industry, rather than just those with access to large upfront capital.

“The programme was completely open for anyone to apply. It was conducted in a very transparent manner. It was also more efficient than the bidding system where people would just put down huge amounts of money and then later be unable to develop the resort. Even now there are about 60 islands awarded through bids that are still not developed,” he said.

“The CSR programme cuts down the initial costs for developers and gives more people the opportunity to own resorts,” Razee explained.

‘Sim’ Ibrahim Mohamed, one of the individuals awarded an island and under the CSR programme, agreed.

“According to tourism law there is no need for an open bid if the government has a share in the resort. The whole motivation behind the theme of the CSR programme was very noble. It was a very sound, well thought-out policy by the previous government,” said Ibrahim.

In contrast to the bidding system which “always favored people who already had money”, the CSR programme “made everyone equal in terms of the ability to enter the tourism industry as an owner,” he explained.

The CSR programme also opened a doorway for Small and Medium Enterprises (SMEs) to enter the tourism industry, said Ibrahim.

In addition, he said that leasing islands to resort developers in exchange for providing basic facilities on inhabited islands, such as water and sewerage system,s was “a very good way of doing it”, taking the country’s economic situation into consideration.

Asked  how the current limbo state of the CSR programme would affect investor confidence in the country, Ibrahim noted “well, in this instance, the investors ran away.”

“This government has been in power for over 100 days and still nothing has happened. We don’t know. We are waiting, the investors are waiting. So it is just money lost, it is opportunity lost. It’s not only investors’ confidence but also financial institutions such as banks that lend you money.”

Although the government has not reached a decision yet, it still remains skeptical about the CSR programme.

“I don’t think the people who got the resorts have the financial capacity to conduct the projects in the islands,” said tourism minister Adheeb. “There are no documents with any evidence of their funds.”


UK visit will resolve Commonwealth and UK government’s concerns, claims President Waheed

President Mohamed Waheed Hassan has claimed his visit to the United Kingdom will resolve concerns of the UK government and the Commonwealth regarding the political situation in the Maldives.

Speaking to press prior to his departure to attend the Queen Elizabeth II’s Diamond Jubilee luncheon hosted by the Commonwealth, President Waheed said during his visit he would meet with UK Prime Minister David Cameron, senior officials of the UK government and Commonwealth officials.

“I am confident that after this trip, any concerns they have will be allayed,” President Waheed told the media.

“We have already provided them with explanations to some extent, and later relayed more information to the Foreign Office as well. Because of this the UK government now listens to what we have to say,” Waheed claimed.

Local newspaper Haveeru claimed 30 people gathered to bid farewell to the President, following the use of loudspeakers around the streets of Male’ last night by pro-government parties urging supporters to gather at the President’s departure point.

The President’s visit to the UK is his second official visit since taking office in February, after his predecessor President Mohamed Nasheed was ousted in what he latter claimed was a coup d’etat.

During his official visit to India, President Waheed told a gathering of diplomats that the Commonwealth was being unduly influenced by opposition politicians in the Maldives, and that it was acting beyond its remit.

Speaking at the Taj Palace Hotel in New Delhi during his five day official visit to India, Dr Waheed reportedly said that the Commonwealth’s Ministerial Action Group (CMAG) had followed the lead of the opposition Maldivian Democratic Party (MDP) in attempting to intimidate the government.