Category: Business & Tourism

Maldives business news

Gili Lankanfushi resort goes green with floating solar panels

The Gili Lankanfushi plugged in the Maldives’ largest floating solar power platform today, enabling a reduction of its annual carbon footprint by 35 tonnes of CO2 emissions.

The 15m by 15m platform is “an engineering marvel, an innovative floating structure that is designed to survive waves and water turbulence,” the resort said in a press release today.

“It consists of glass fibre tubes, aluminium frames and 112 solar panels.  Weighing over five tonnes, it took nearly one third of Gili Lankanfushi’s hosts to push it into the water.”

The five-star luxury resort also announced its partnership with Swimsol, “an Austrian company that specialises in ground-breaking floating solar power solutions.”

The Swimsol team plugged in the platform to the resort’s power grid today. On sunny days, it can produce up to 200 kWh, “which is enough to power the equivalent of all our pathway and jetty lights, as well as the Front Office lighting for 12 hours!”

The reduction of the carbon footprint is meanwhile equivalent to 30 return flights from Europe to Maldives per person.

The platform cost US$90,000.

Deborah Burn, marine biologist and environmental officer at the resort, told Minivan News that Swimsol financed the platform installation as a research project, but the resort plans to buy back the electricity supplied from the solar panels.

The resort is very proud of the platform, Burn said: “It’s a great step towards becoming an eco-friendly resort, and it’s good for our marketing as well.”

Solar panel electricity systems, also known as solar photovoltaics (PV), capture the sun’s energy using photovoltaic cells, which does not need direct sunlight to work and is able to generate some electricity on a cloudy day.

In January, Gili Lankanfushi earned the prestigious TripAdvisor Traveller’s Choice Award 2015 for Best Hotel in the World.

The Maldives’ first fully solar powered resort, the Club Med Finolhu Villas, opened for business in January with 6,500 square meters of solar panels capable of producing 1100 Kilowatts at power peak.

Likes(0)Dislikes(0)

Guesthouse island project relocated

The government has changed its guesthouse island project from Laamu Atoll Thumburi to Baresdhoo in the same atoll and renamed it the ‘Laamu Integrated Project.’

President Abdulla Yameen launched the project in June 2014 for the development of a 2,100-bed resort in Thumburi operated by multiple local small and medium-sized enterprises, describing the concept as  “communal tourism development” or “vertical tourism.”

Maldives Marketing and Public Relations Corporation (MMPRC) managing director Abdulla Ziyath told the press yesterday that Baresdhoo was chosen as the new location as it is 10 minutes by speedboat from Laamu Gan and significantly larger than Thumburi.

“As the island is 72 hectares, when we consider the project feasibility, more plots can be [sold],” he reportedly said.

Ziyath said 70 percent of land allocated for hotel development has been sold and that the 3,000-bed ‘integrated resort’ will open for business in 2017.

The 17-hectare Thumburi island and the linked 19-hectare Hulhiyandhoo island will be developed in latter phases, he said.

Baresdhoo was previously leased to Jumhooree Party leader Gasim Ibrahim’s Villa Group for agriculture. However, the agriculture ministry decided not to renew the lease when it expired in July 2014, saying Villa had not done any farming on the island.

Ziyath told the state broadcaster in March that the decision to change the island was made following consultations with potential investors.

Construction of a jetty and harbour on Baresdhoo would begin in about a month and conclude before the end of the year, Ziyath had said.

“So overall the project’s viability and progress is very good. There was a slight delay over changing the island,” he said.

The MMPRC was tasked with overseeing the project and engaging with investors. The corporation had said that the guesthouse island project is designed to “responsibly diversify the tourism product of the Maldives” without damaging the country’s image as an upmarket, high-end destination.

The project was also pledged in the ruling Progressive Party of Maldives’ manifesto with the aim of involving small and medium businesses in the lucrative tourism industry without encroaching on inhabited islands.

Following the introduction of guesthouses in inhabited islands in 2009, mid-market tourism grew substantially with the availability of a low cost accommodation option.

The number of registered establishments rose from 25 at the end of 2010 to more than 170 last year. However, despite the tripling of guesthouse bed capacity, the industry continues to be dominated by the ‘one island-one resort’ model.

The MMPRC meanwhile signed an agreement yesterday with Heavy Force to construct a causeway and harbour on Baresdhoo and contracted the state-owned Island Aviation company to provide transportation services.

Baresdhoo will be developed under phase one of the project, Ziyath said, and the MMPRC will invite bids for “support services” such as a diving centre, water sports facilities, and a shopping centre in a month.

Island Aviation managing director Abdul Haris said the company expects a twofold increase in the number of passengers to Laamu atoll when the project is complete and would facilitate seaplane operations to the island.

Likes(0)Dislikes(0)

Fenaka blames arsonists for fire at Addu City office

The state utility Fenaka Corporation has blamed arsonists for a fire at its offices in Addu City on Saturday.

A group of people poured kerosene and set fire to an area adjacent to the Fenaka sub station, which houses a transformer in Addu City. The fire was an attempt to disrupt electricity services in the area, the company said in a statement yesterday.

The station’s doors were damaged in the fire.

“We believe this was an attempt to damage the transformer at the station. If the transformer had been damaged there would have been difficulties in providing electricity to residents in the area as well as Muhyiddeen School,” the company said in a statement.

“We appeal [to the public] not to commit acts that may damage important service infrastructure for the sake of obtaining certain benefits.”

The police said no arrests have been made yet.

The fire comes two weeks after a group of people threw rocks and shattered windows at the home of Fenaka’s regional director Abdulla Zuhair.

A retail shop owner in Addu City Inaz Mohamed said the fire at the Fenaka sub station and the attack on Zubair’s house may be a result of “desperation” due to an unresolved dispute over electricity prices between the power company and local businesses.

Addu City businesses have been protesting since April over what they called a sudden hike in electricity prices.

In March, Fenaka increased prices in Addu and cut electricity subsides in other atolls in a bid to save MVR11 million (US$713,359) per month from the state budget.

Power bills have increased by 30 percent, shop owner Inaz Mohamed Didi said.

Inaz said businessmen in Addu had lodged separate petitions with government offices, the parliament and the courts. “But no one in this government is listening to us.”

He said he does not know who was responsible for the attacks and said businessmen in Addu do not encourage violence and have always prioritised dialogue.

Businessmen across the country closed their shops in protest in April. But the company said its hands were tied as it was only implementing government policies.

Fenaka is the main electricity provider in the atolls and operates in 151 of the 188 inhabited islands of the Maldives.

Addu City deputy mayor Abdulla Thoyyib meanwhile expressed concern over differences in electricity prices, noting that charges in Addu City and Fuvahmulah are up to 37 per cent higher than in capital Malé.

Higher electricity prices reduce investment in the southernmost city, he said.

In early May, Fenaka cut off electricity to several businesses, including a private hospital, when owners refused to pay bills.

Four businesses lodged a complaint with a magistrate court over power cuts. The court initially issued a stay order, but a new judge appointed to oversee the case overturned the ruling and said Fenaka was authorised to cut electricity if businesses fail to pay bills.

Presenting the 2015 budget in parliament, the government said it would target electricity subsidies to the poor.

But businesses and the opposition say the government failed to inform the public of the change in prices.

Likes(0)Dislikes(0)

Government awards fisheries loans to 32 women

The government awarded loans worth MVR1.6 million (US$103,761) yesterday to 32 women under a programme to encourage female youth entrepreneurs in the fisheries sector.

Deputy minister of fisheries and agriculture Ahmed Hafiz told Minivan News today that the loan scheme offered loans of either MVR50,000 (US$3,242) or MVR100,000 (US$6,485) to develop fish products.

“As stated in the government’s manifesto, the loans were aimed for youth to encourage youth participation in the fisheries industry,” he said.

A World Bank report released in February revealed that the unemployment rate for women aged 15 to 24 was three times higher than for men in the same age group.

At 22 percent, the Maldives also has the highest rate of youth unemployment in South Asia.

Hafiz explained that loans worth MVR5.8 million (US$376,134) will be issued under the programme with 60 percent allocated for female youth entrepreneurs.

However, 60 percent of the 176 applicants were not young women, he noted, adding that the ministry will award the rest of the loans after the evaluation process.

Hafiz said the response from the public was “good, it was better than we expected.”

The loan programme is funded from the government budget.

Hafiz noted that that the MVR50,000 loans were awarded without collateral. The loans have to be repaid to the Bank of Maldives in five years at an interest rate of six percent.

In March, the government issued MVR8.6 million (US$557,717) worth of loans to 14 boat owners and fishermen under a fisheries loan scheme.

Although 60 percent of the funds were earmarked for youth, President Abdulla Yameen noted at the time that only three of the 14 recipients were young fishermen, and urged more youth – the “target group” – to apply.

President Yameen has pledged to create 94,000 jobs for Maldivian youth. Last year, the government introduced a youth unemployment register, cleared the criminal records for many youth offenders, and launched the ‘GetSet’ entrepreneurship programme.

The anti-corruption watchdog in April ordered the youth ministry to re-evaluate applications submitted for the ‘Get Set’ loan scheme, noting two youth ministry staff were among the proposed recipients.

 

Likes(0)Dislikes(0)

Government tasks fisheries company with providing public transport in Addu City

The government has terminated an agreement with MVK Maldives Pvt Ltd to provide bus and ferry services in Addu City, and tasked the state-owned Maldives Industrial Fishing Corporation (MIFCO) with providing the public transport services.

The contract with MVK was signed by the Maldivian Democratic Party (MDP) government in 2009 under its Public-Private Partnership policy.

Minister of economic development Mohamed Saeed told the press today that the government has been “receiving numerous complaints regarding the ferry services” in the southernmost atolls.

“The ferry, which was supposed to be running between Addu City and Fuvahmulah has been stopped for almost a year, while the bus services within Addu City have suffered interruptions,” he said.

“That is why we decided to annul the agreement with MVK and hand over the agreement to MIFCO.”

Saeed said that the MDP government’s transport system was built “very irresponsibly” on a loose foundation, alleging that it was intended to provide unlawful gains to certain parties.

A nationwide transport network was one of five main pledges of former President Mohamed Nasheed.

MIFCO is also providing ferry services in the Gaaf Dhaal and Gaaf Alif atolls in the south after former President Dr Mohamed Waheed’s administration terminated an agreement with Trinus-CAE Holdings Pvt Ltd.

MIFCO’s CEO Adlee Ismail said the company’s immediate focus would be to start providing services to the current standard.

“We have to bring buses and other vehicles from abroad. Our aim to bring air-conditioned and modern vehicles,” said Adlee.

Adlee said 30 percent of the company’s fish stocks are from Addu City, and that the company is planning to open a fish processing plant in the Hulhumeedhoo ward early next year.

Turbulent history

MVK was leased a guesthouse in Gan for 50 years in exchange for providing the ferry services.

However, Addu City Mayor Abdulla ‘Soabe’ Sodiq previously told Minivan News that the guest house “which was functioning well when handed over,” is now mostly vacant and neglected.

The guesthouse transaction was later investigated by the Anti-Corruption Commission in 2010, which found that it was awarded illegally.

MVK was also questioned by the parliament’s government oversight committee in September 2014 regarding its failure to provide the transportation services.

At the time, company officials told the committee that plots of land awarded under the initial agreement had not been handed over.

However, the company agreed to resume transportation services, requesting until December 2014 to start the inter-atoll ferry to Fuvahmulah.

Saeed said today that the government has shown a “good example” by cancelling the contract, declaring that it will not hesitate in terminating agreement if there are shortcomings in providing services to the public.

The current administration has already terminated several of the MDP government’s projects, such as the Tatva waste management agreement.

Former president Dr Mohamed Waheed Hassan in 2012 terminated an airport development agreement with Indian infrastructure GMR.

Likes(0)Dislikes(0)

Maldives to build Chinese-friendly hotels and resorts

The tourism ministry has announced plans to build Chinese-friendly hotels and resorts in the Maldives to cater to increasing tourist arrivals from China.

Tourism minister Ahmed Adeeb leased the island of Kalhufahalufushi in Thaa Atoll for resort development to the China Machinery Engineering Corporation (CMEC).

The global engineering contractor is set to become the first Chinese company to invest in the Maldives and in the tourism industry.

Maldivian resorts were designed to cater to European holiday makers, Adeeb said. But with the new deal “Chinese tourists will see hotels that are designed for them. But tourists from other countries will also go there.”

The number of Chinese tourists visiting the Maldives tripled from about 100,000 in 2010 to more than 300,000 last year.

With a total of 363,626 arrivals in 2014, Chinese tourists accounted for nearly one-third of arrivals with a 30 percent market share, representing the single biggest source market for tourists to the Maldives.

Adeeb said CMEC will now undertake a feasibility study and propose its development concept and other details to the government, adding that a lease agreement will be signed before the end of the year.

The tourism minister said he expects CMEC to invest at least US$200 million in the Maldives.

He also said islands leased by the current administration for resort development will open for business in 2016.

Adeeb claimed development is proceeding rapidly due to concessions from the government, such as waiving import duties for construction material and providing sovereign guarantees for foreign loans.

Likes(0)Dislikes(0)

Government freezes Villa accounts

The central bank has frozen the accounts of several companies owned by opposition Jumhooree Party (JP) leader Gasim Ibrahim, over a US$90.4 million payment allegedly owed as unpaid rent, fines and interest on several properties leased for tourism.

The Villa group has refused to make the payment and is contesting the tax authority’s claim at the civil court. Gasim has accused the government of unfairly targeting his business interests.

The Villa group operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport and education. Only the accounts of companies which hold the properties were frozen. They are Villa Shipping, Villa Holidays, Gazeera Pvt Ltd and Maanenfushi Pvt Ltd.

Villa officials on Tuesday told local media the accounts slated to be frozen are empty.

But the Maldives Inland Revenue Authority (MIRA) says the government can suspend all services to the company, including customs clearance and foreign work visas, if it is unable to recover owed sums through the frozen accounts.

MIRA issued the US$90.4 million notice in February after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development.

The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party. However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

The properties at stake were leased under a settlement agreement signed with the tourism ministry on December 12, 2013, less than a month after president Abdulla Yameen took office.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

The notice for payment expired on April 18, but MIRA did not freeze the company’s accounts saying the move may negatively affect the Maldivian economy, local media reports.

The Villa group has previously said freezing its accounts will “send shockwaves” through the Maldivian economy.

“It is not only Villa’s shareholders’ and the company’s rights that are lost [if bank accounts are frozen]. The rights of a lot of employees who work at the company, small and medium-sized businesses dependent on this company, guests who have made bookings at our resorts, tour operators, and many other people, would also be lost,” Villa Group’s executive director Shimad Ibrahim had said.

The Villa group employs over 5,000 people.

The central bank has also frozen the accounts of JH Resorts Pvt Ltd, the Maldives Tourism Development Corporation, Asia resorts, Yacht Tours Pvt and Medhufushi and the accounts of AAA Pvt Ltd.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments over a crackdown on the opposition, including the arrest of JP deputy leader Ameen Ibrahim on May 2.

Likes(0)Dislikes(0)

Audit flags deficiencies in control of expatriate workers

An audit of the immigration department has identified deficiencies in the issuance of quotas and work permits as well as monitoring and enforcement measures.

The performance audit examined the “control of expatriate workers” in the Maldives after November 2012 and found that 68 percent of sampled quotas were issued against specified criteria.

The quota limits the number of expatriates that can be employed by a local business and is calculated based on the type of work. It is generated using an automatic formula in the ‘Xpat online system.’

“We observed the number of quota generated by the system through the use of the formula was more than were requested by the employers,” reads the audit report made public on Monday.

“Hence, the use of the formula resulted in issuing more quotas than was required. Such instances indicate that the [immigration department] did not consider the economic needs when quotas were issued.”

The audit also found that the department had not inspected all worksites before issuing quotas.

“This resulted in incorrect issuing of quotas; a police investigation report revealed issuance of quotas in respect of nineteen worksites that did not exist,” the report stated.

Of a sample of 40 quotas and employment approvals, 27 quotas and 13 approvals were issued when criteria were not met.

According to the 2014 census, there are 58,683 expatriates residing in the Maldives. However, the department of national planning has said the figure was much lower than numbers recorded by the immigration department.

NGO Transparency Maldives (TM) estimates there are 200,000 migrant workers in the Maldives – two-thirds of the country’s population.

A government report in 2011 revealed human trafficking to be the Maldives’ second most lucrative industry after tourism – worth an estimated US$123 million a year.

The Maldives ratified an Anti-Trafficking Act in December 2013, but TM says implementation, monitoring and enforcement of laws and regulations are crucial to prevent human trafficking.

Monitoring and enforcement

The department has not conducted research to determine the number of skilled and unskilled immigrant workers needed in the Maldives, the report observed, while the absence of a “sound policy framework” has resulted in a rapid increase in migrant workers.

Tackling illegal migration has since become “one of the main objectives of the department.”

The report noted that the absence of effective enforcement measures prior to 2014, after which the department “started conducting frequent investigations and they have strengthened their enforcement measures such as levying a fine on employers violating the regulations.”

“However, the [department] made slow progress in areas such as improving efficiency, staff capability quality of data and maintenance of complete data on the Xpat Online System,” it added.

The department began using the system in November 2012, but accurate information prior to then is not available as “migration of data from the labour ministry system…was not performed in a planned and systematic manner.”

“However, between 26 November 2012 and 31 December 2013 there were 9,914 expired work permits that were neither renewed nor cancelled,” it added.

As of September 2014, the department was owed MVR27.3 million in unpaid visa fees. However, apart from blacklisting the employers, the department “has not used its powers such as fining or holding passport of the employers.”

While the department implemented the US-donated PISCES border control system in August 2013, the audit observed “difficulties with entering and editing data”.

The system is not integrated with the Xpat online system, “which is hindering the achievement of the [department’s] objective in minimising illegal immigration.”

The department also failed to maintain data on workers who left under the government’s ‘Voluntary Departure Programme.’ The actual number of workers that departed under the programme is unknown.

The accuracy of the Xpat system cannot be ensured either, the report continued, as it cannot be used to trace workers who have left.

Information in travel documents “does not necessarily match with the information recorded in the system.”

“The employment approval of those leaving the country using a travel document would not be cancelled from the system,” the report noted.

Additionally, the department has not handled complaints “in a systematic manner.” The audit found that some complaints had not been attended to for over a year.

Recommendations

The auditor general’s office recommended that the department follow its standard operating procedures in issuing quotas and permits, conduct thorough checks at all stages, and take action against employers with unpaid work visa fees.

The audit also advised formulation of a framework on the number expatriate workers needed in the country.

The department should also “create a culture of serving the public,” evaluate staff capacity and workload, and recruit more staff where necessary.

A survey conducted during the audit revealed that a significant number of employers were not satisfied with the department’s services.

The department should also ensure that deposits collected from employers should only be used to deport workers. The audit office also advised revising deposit rates “at regular intervals to reflect the costs likely to be incurred.”

Likes(0)Dislikes(0)

Government can suspend services to Villa if frozen accounts are empty

If the government is unable to recover sums owed to the state by freezing a company’s accounts, it can suspend all services to the company, including customs clearance and foreign worker visas, the Maldives Inland Revenue Authority (MIRA) has said.

The tourism ministry yesterday ordered the tax authority to freeze the accounts of all companies with pending bills, including that of the opposition Jumhooree Party leader Gasim Ibrahim’s Villa group.

But Villa officials today told local media that the accounts of the holding company, the Villa Shipping and Trading Pvt Ltd, are empty.

The government is seeking US$90.4 million allegedly owed as unpaid, rent, fines and interest on several properties from Villa group. The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the notice is unlawful and is contesting it at the civil court.

The notice for payment expired on April 18, but MIRA did not freeze the company’s accounts, saying the move may negatively affect the Maldivian economy, local media has said.

Executive director of finance at Villa, Shimad Ibrahim, told Haveeru today that the company’s accounts were empty before the government’s decision to freeze accounts.

“We knew we were going to face financial difficulties before the decision to freeze the accounts. We were set to get a loan to offset the downturn, but that loan was cancelled due to these issues. That is why the company’s accounts are empty,” he said.

Speaking to Minivan News, Fathuhulla Jameel at MIRA said the authority’s enforcement policy allows it to order government offices to suspend all services to the company, and ask the civil court to set an arrangement to recover funds if the company’s accounts do not hold the owed sums.

MIRA issued the US$90 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development. The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party (MDP). However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

While the tourism ministry cited lack of “good faith” as the reason, the Villa officials insisted the terminations were unlawful and that the fines were “fabricated”.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis triggered by the arrest of opposition politicians. JP’s deputy leader Ameen Ibrahim was also arrested last week after clashes between protesters and police following a 20,000 strong anti-government march.

Likes(0)Dislikes(0)