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.”

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18 thoughts on “Sixty resort islands in limbo after political turmoil strikes CSR programme”

  1. During the last three years, Nasheed presented more than 400 islands to his close associates and MDP activists.

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  2. Musliha, what a heading. "Sixty resort islands in limbo after political turmoil strikes CSR programme" What are you trying to prove? What is all the spin about? These 'CSR resorts' were no more than free gifts Anni gave to his cronies.

    Anni and MDP plundered the wealth of this nation in 3 years just like Gayoom and his cronies did in their 30 years. With the ongoing border control scandal it looks like waheed is no different.

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  3. Giving away national assets to private parties without a selection process seems rather 'Undemocratic'.

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  4. ...whats the fuss all about? these are just islands too late for development as the future of tourism looks bleak.

    Rather than wasting time on sand and coconut islands that will be there forever, let us concentrate on more crucial areas that would decide the fate of the country. Education, growing unemployment, religious extremism, and crime.

    Anni never ate a penny, he did what Castro did to his comrades after the revolution. Waheed has followed suit and am sure, the next president UMARU currently taking his masters degree, would do the same.

    Its only gayoom who can make any change in this country, and we all know that!

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  5. Why Qayyoom?

    This is not about personalities but about people and systems. We need to take a more holistic look at things.

    We need a regime that can instill faith in democracy among the people. What the people rejected in 2008 is the memory of a system that had failed. Qayyoom was the symbol of that system and Qayyoom as a President is something that would amount to a regression in the common perception.

    Nasheed is also now the poster-boy for all that is wrong with democracy.

    That is why the public lost faith in his regime.

    These figureheads are all basically capable, determined and noteworthy people. But, if we are to go ahead with a Presidential democracy then the President must ideally be someone fresh and untried. That is my view in this regard.

    Also the next regime must have the technical and political strength to demand the respect of the State machinery. The regime must also have the capability to handle the politically restless and confrontational juncture we are at. The recent vote of confidence for Abdulla Shahid as Speaker of Parliament is a shining example of that there are people or rather persons that can wade through these murky waters.

    Above all the next regime we elect must strengthen confidence in the democratic system. For that we also must demand the opposition to carry out their activities within certain limits. This is where all parties must agree to bind themselves by a Political Parties Act, by regulations on street demonstrations, by controls on strikes and protests and by a universal love and respect for our economy as the engine that will drive our growth politically and socially.

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  6. @no name idess on Wed, 6th Jun 2012 9:39 PM

    "Anni and MDP plundered the wealth of this nation in 3 years just like Gayoom and his cronies did in their 30 years."

    Go on then, take Anni, MDP and Gayoom to court and prove your case. After all, we are supposed to have an "independent" judiciary now.

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  7. A pile of sand in the middle of the Indian Ocean is neither a resort, nor does it generate any money. Leasing these islands is not guaranteed to produce any money either.

    Millions of dollars of capital investment needs to be poured into every single island before they start to generate even a single dollar of revenue. With the shortage of funds for commercial projects on this scale, especially here in the Maldives, there are very few businesses that can undertake these risks.

    The last government made key mistakes in leasing them; the biggest of which is the lack of transparency. The process was cloaked in secrecy, with the Tourism Ministry awarding islands willy nilly.

    This is reminiscent of the sale of land in certain African countries to large corporates. Often, little thought is given to the long term consequences of such deals.

    Our ONLY precious resource is what nature gave us. We can't spend that capital on a whim like MDP did.

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  8. The only relevant question here is, was it legal, was it not? The rest of the gibberish is political.

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  9. I am baffled by Adheebs statement "I don’t think the people who got the resorts have the financial capacity to conduct the projects in the islands,” “There are no documents with any evidence of their funds"

    How many of the people who bid for the resorts islands in Gayooms adinistration had funds to develop the resorts? How many of them had documents with evidence of funds? They were just brokers, selling the development and management of the island to investors and made millions . The overnight millionaires.

    No, like Razi said crrectly, the system that was floated by President Nasheed was more egalitarian and was an opportunity for people other than the Tourism moghuls of the country, Champa, Gasim and Universal to participate and benefit from the tourism industry.

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  10. Come on, Adheeb, get with the times. The days of the spin is really over, have you not noticed we are in the age of the internet tweet and facebook?

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  11. I am just amazed at the conversations about transparency. The Department of National Planning had a website where every proposal was listed and updated .All names of people who applied for islands were on that website.

    Decisions were made by the national planning Council which had members who were NOT President Nasheeds selections. Kaleem for example was proposed by Dr Waheed.

    What more transparency do you want?

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  12. This is kind of confusing. Is giving over Maldivian resorts to MDP activists and prominent MDP businessmen considered as "Corporate Social Responsibity "?

    I thought that was considerable as blatant corruption, but the writer of this article seems to think that corrupt actions such as this can be positively portrayed by utilizing the words "Corporate Social responsibilty".

    Heck, if so, id like to demand the present Govt to donate me a resort so that i can sell it to an international chain off resorts for 10 million dollars and then build a 1 million dollar electrical distribution network in some remote island. Id like to pocket the other 9 million dollars please. I promise to participate in all political rallies if i am given this resort.

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  13. “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"

    I can't believeAdheeb is this stupid to make a statement like this. I always thought he was narcissistic but tupid I didnt.

    Well now we know.

    Since when did anyone have funds to develop the resorts in the Maldives? Funds was always procured through third parties.

    Hw many of those people who "won" the bids had money? They were just brokers who made millions selling "their" island to the investor who paid them most.

    Overnight millionaires.

    Gayooms friends and family behind every one of them.

    The bidding of the resorts islands was one of the most corrupt actions of the Gayoom administration.

    Millions exchanged hands for 30 years and our people lived without freash water, a decent education, electricity and medical care in the islands.

    The people who opposed the MDP manifesto have a lot to say about the lato fato membership of te MDP. if this adminsitration is about the "educated" elite running this country, give us the lato fato party any day.

    All the educated elite of this country think of is their fancy houses, their businesses which they run out of their offices in government, their childrens education, their medical welfare, their holidays ...

    They got everything and those who financed their state education, what did they get? Put on your Gucci loafers, Rayban sunglasses and your designer jeans and casuals and your smartfone and laptop and go visit the islands and see for yourself.

    These people make me want to vomit.

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  14. This man Adheeb was portrayed as a serious economist by the media before the coup. Now we see the stuff he is made of. Nobody in this country has all the cash he or she needs to build a new resort. Even if some did have it outside the country, does Adheeeb think they would pump their own money into a USD 30 -50 million resort? what are financiers and investors for?

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  15. Don't worry, you don't need any more resorts. The existing resorts will soon be empty. Tourists are fed up with the Maldives - political unrest - poor service at reorts - resorts charging 5 & 6 star prices for 3 star facilities and service etc. etc. The list goes on and on.

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  16. Seriously, people just listen to dhitv and vtv and jump to conclusions. Usual guests on these channels will be the motley pf clowns and buffoons - namely megafool mahfool, Queen's butler-to-be riyaz rasheed, fuhjehi kavaabu ilham, banana nihan, unwashed ali arif, and such funnaabu us maahirun (in any area). and idiot ministers like adheeb dont help matters with nonsensical drivel.

    All the names and details of people were updated on NPC website and there for all to see. What more do people want? Send a letter to every household with all the names? People dont even know about this before starting to comment on 'lack of transparency'.

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  17. Last time i was in Male on business I met with a politician who said i could have a resort island for $5 million and a joint venture with the GOM. I'm from Australia, not a MDP cronie. Atm i think anyone with investment $ would be crazy to go anywhere near Maldives, if the current gov starts cancelling Contracts all "investor" fears will have been realized.
    I think its a great idea to make developers build infrastructure on inhabited islands. Any government that can come up with innovative ways to help the people they serve and getting investors to pay for it, is clever.
    Come on GOM give us a certain investment climate, with contracts that last the term of the agreement and we will return!

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  18. @Ali on Thu, 7th Jun 2012 8:53 AM

    "Decisions were made by the national planning Council which had members who were NOT President Nasheeds selections."

    Can you re-read what you wrote and then honestly say to yourself, that the process was transparent? Putting up the list of name of bidders doesn't make it a transparent process.

    What were the criteria used in the decision making process? Is that available? How were the proposals evaluated? What were the "marks" received by each of the bids? Where is this information? These are the elements that make it a transparent process, and not just putting up a list of bidders!

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