Business & Tourism – Page 31 – Minivan News

Economic diversification vital for food and energy security, says government report

The Maldives continues to face huge issues of food security, last year importing 90 percent of all goods consumed, while also being one of the most “oil vulnerable” countries in the world, according to a government report calling for significant economic diversification.

According to the Maldives Economic Diversification Strategy (MEDS), released last week, the nation has become “over-dependent on tourism”, with the industry last year accounting for more than two thirds of the Maldives’ Gross Domestic Product (GDP).

The report concluded that such a reliance on one sector alone had left the country’s economy particularly susceptible to natural disasters and adverse financial conditions.

“The Maldives needs to bridge swiftly the gaps that are emerging from the short-term political aims and the long-term economic goals,” stated the report’s introduction.

“Our vision for the Maldives is to become a high income, resilient, inclusive economy by 2025,” it added.

The MEDS reported that fuel imports last year totaled US$488 million or 22 percent of annual GDP. Meanwhile, US$389 million was spent bringing food into the country in 2012 – with demand predominantly made up of US$64 million in confectionery and beverages; US$60.1 million in meat, fish and seafood; and US$49.3 million in vegetables, root crops and spices.

The country’s official external debt was also said, on the basis of official figures, to have “increased significantly” to US$846.2 million – 38 percent of GDP – by the end of 2012, from US$ 959.1 million – 43 percent of GDP – in 2011.

Financial challenge

The government earlier this month said it hoped to secure longer-term financing to plug a shortfall in annual revenue that has seen the number of 28-day Treasury Bills (T-bills) sold by the state almost double by July 2013, when compared to the same period last year.

The comments were made just weeks after the Maldives Monetary Authority raised fears over the current “beyond appropriate” levels of government expenditure during 2013.

” Broad-based” economy

In an attempt over the next decade to transform the Maldives into one of Asia’s so-called “miracle economies”, such as Singapore and Hong Kong, the MEDS report, compiled by the Ministry of Economic Development, has outlined a ten sector strategy towards making the Maldives a “broad based export driven economy.”

“After having enjoyed rapid economic progress over three decades, our economic conditions changed dramatically following the Indian Ocean tsunami,” stated the report, which calls for a smaller, more prudent government moving forward.

“Since 2005, economic policy making in the Maldives has focused on crisis management. What is needed in the Maldives now is to move away from crisis related adhoc decision making to a clear vision, coherent strategies and coordinated policies.”

The MEDS report contained 10 sector specific plans for development of a more versatile economy. These include:

Transport

The government has pledged to boost the importance of transportation services to the economy by increasing their value to US$500 million by 2025 – from US$153 million last year.

According to the report, this focus will be achieved through expanding the capacity of existing transport hubs such as Ibrahim Nasir International Airport (INIA) and developing cruise ships terminals and a marina.

Despite this pledge, the government controversially scrapped a US$511 million contract signed under the previous administration with India-based infrastructure group GMR to develop and manage an entirely new airport terminal at INIA.

Earlier this week, Economic Development Minister Ahmed Mohamed was quoted in local media of accusing the former government of working to make the Maldives “an economic slave” to an unspecified foreign company.

Education

In the field of education, the government report has pledged a strategy of trying to develop higher education as a “priority expert sector” by working to transform the Maldives into a destination capable of attracting 15,000 international students a year.

Trade

For trading strategies, the MEDS has targeted developing local trade to increase value to US$500 million, from just US$96 million last year, partly through a focus on developing malls, boutique stores and e-shopping.

Tourism

In tourism, the Maldives will aim to nearly double current income value by 2025 through strategies to diversify into providing meetings, incentives, conferencing, and exhibitions – (MICE) facilities – in addition to wellness tourism and family orientated attractions.

The government has previously expressed a desire to commit to a number of these developments including the expansion of biospheres and developing other “value-adding” concepts via the Maldives’ fourth official tourism master plan, expected to be unveiled later this month.

The MEDS report anticipated that such developments would help increase the economic contribution of tourism to US$1.2 billion by 2025, from around US$555 million in 2012.

Health

The report has also pledged to develop the Maldives as a destination for international healthcare services via measures such as creating a medical college and a teaching hospital.

In June, the Ministry of Health identified current salary levels and staff safety as the key issues driving “shortages” in the number of trained medical staff coming from abroad to work at under-skilled hospitals in the Maldives.

Financial services

MEDS also expressed a desire to increase the financial service industry’s value to US$250 million by 2025 through the development of legal reforms and wider efforts to attract international banks to the Maldives.

The Maldives National Chamber of Commerce and Industries (MNCCI) argued in July that the country’s politicians had done little to address an ongoing shortage of US dollars and a lack of investment banking opportunities and arbitration legislation in the country.

Communication

The report pledges a strategy of increasing communication service value to US$500 million by 2025 – from US$159 million last year – by pursuing the development of IT parks in the nation as well as providing resorts specifically for research sabbaticals.

Agriculture

The MEDS also pledged to facilitate a means of boosting agricultural production to a value of US$ 150 million by 2025.

Campaigning back in May for the opposition Maldivian Democratic Party (MDP), former President Mohamed Nasheed unveiled an election strategy on the island of Kulhudhufushi in Haa Dhaal Atoll, that he claimed could lead the country to produce about 44 percent of the foodstuffs currently being imported into the country.

Likes

(0)Dislikes

(0)

No legal authority for ACC to prevent signing of Nexbis contract, Supreme Court rules

The Supreme Court has ruled that the Anti-Corruption Commission (ACC) did not have the legal authority to order the Department of Immigration and Emigration not to sign a contract with Malaysian mobile security firm Nexbis in 2010, to establish a border control system (BCS).

The apex court today overturned a previous High Court judgment, which itself overturned a Civil Court ruling last year declaring that the ACC did not have legal authority to terminate the contract signed with Nexbis in November 2010.

However, the High Court judgment was appealed by Nexbis at the Supreme Court, which today ruled in favour of the Malaysian company.

The controversial BCS project was terminated by the government in August this year and replaced by the Personal Identification Secure Comparison and Evaluation System (PISCES) provided by the US government on August 20.

According to local media reports, today’s Supreme Court judgment was delivered with the unanimous consent of all seven Justices on the court bench. However, Chief Justice Ahmed Faiz Hussain and Justice Muthasim Adnan noted different points to the other five.

Delivering the majority decision at today’s hearing, Justice Abdulla Saeed reportedly said that the High Court violated judicial and legal principles in overturning the lower court verdict, noting that the ACC’s order was made after the agreement was signed.

Referring to domestic contract laws and the ACC Act, the Supreme Court upheld the Civil Court ruling, which had determined that the ACC did not have the legal authority to order the Immigration Department to terminate the BCS project based on alleged corrupt dealings.

The Supreme Court had also previously overturned a High Court injunction blocking the implementation of the BCS project, prompting ACC Chair Hassan Luthfy to claim that the independent body had been rendered powerless.

“If this institution is simply an investigative body, then there is no purpose for our presence,” Luthfy said in September last year. “Even the police investigate cases, don’t they? So it is more cost effective for this state to have only the police to investigate cases instead of the ACC.”

Luthfy contended that the ruling had rendered the ACC powerless to prevent corruption, even if it was carried out on a large scale.

“In other countries, Anti Corruption Commissions have the powers of investigation, prevention and creating awareness. If an institution responsible for fighting corruption does not have these powers then it is useless,” he argued.

Corruption allegations

In December 2011, the ACC submitted corruption cases to the Prosecutor General’s Office (AGO) against former Immigration Controller Ilyas Hussain Ibrahim and Director General of the Finance Ministry, Saamee Ageel, claiming the pair abused their authority for undue financial gain in awarding Nexbis the MVR 500 million (US$39 million) BSC project.

Ex-controller Ilyas – brother-in-law of President Dr Mohamed Waheed and current state minister of defence and national security – pleaded not guilty to the charges at the first hearing of the trial on April 10 this year.

Meanwhile, on December 25, 2012, parliament voted unanimously to instruct the government to terminate the BSC agreement with Nexbis.

All 74 MPs in attendance voted in favour of a Finance Committee recommendation following a probe into the potential financial burden on the state as a result of the deal.

In September 2012, the ACC informed the committee that the deal would cost the Maldives MVR 2.5 billion (US$162 million) in potential lost revenue over the lifetime of the contract.

The Finance Committee meanwhile found that the government had agreed to waive taxes for Nexbis despite the executive lacking legal authority for tax exemption.

Following the signing of a Memorandum of Understanding (MoU) with the US government in March this year to provide a border control system to the Maldives, representatives from Nexbis told Minivan News that the company was uncertain what the MOU would mean for the group’s own border control technology. The technology has been in use at Ibrahim Nasir International Airport (INIA) since September 2012.

“We do remain confident that the Maldivian government will honour its obligations under the 2010 concession agreement,” read a statement from lawyers representing the company.

“We are confident also of the support we have received by the Immigration Department in implementing and fully operating the system, but remain cautious of individuals that continue to pose obstacles to prevent the success of this project is stemming the national security issues faced by the Maldives today.”

Concession agreement

Under the concession agreement signed with the Maldives government, Nexbis levied a fee of US$2 from passengers in exchange for installing, maintaining and upgrading the country’s immigration system. The company also agreed a fee of US$15 for every work permit card issued under the system.

Nexbis in July 2013 invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control technology in line with the concession agreement – requesting payment be settled within 30 days.

Nexbis’ lawyers argued that the company had expected the fee to be included in the taxes and surcharges applied to airline tickets in and out of the country, according to local media. However, lawyers argued these payments had not been made due to the government’s “neglect” in notifying the relevant international authorities.

Likes

(0)Dislikes

(0)

Government paying Grant Thornton £4.6 million to halt STO oil trade investigation

The Maldivian government has reportedly been paying millions of dollars in penalty fees to forensic accountancy firm Grant Thornton, after last year terminating its contract to recover assets allegedly stolen during the 30 year regime of Maumoon Abdul Gayoom.

Under the terms of the contract, signed by the former Nasheed administration in July 2010, Grant Thornton would charge no fee for the investigation beyond costs such as flights and accommodation, instead taking a percentage of the assets recovered. At the same time, Grant Thornton was entitled to charge a penalty fee of up to US$10 million should the government terminate the investigation, such as in the event it arrived at a political deal.

One of the first acts of President Dr Mohamed Waheed’s government after 7 February 2012’s controversial transfer of power was to dissolve the Presidential Commission which had been overseeing Grant Thornton’s investigation, and terminate the agreement with the forensic accountants.

In August 2012, Attorney General Azima Shakoor issued a statement announcing that her office had received two invoices totalling US$358,000 and GBP£4.6 million from Grant Thorton, charges she claimed were for legal advice provided to Nasheed’s government.

Azima had not responded at time of press, but Finance Minister Abdulla Jihad confirmed to Minivan News last week that the government has been paying the charges, though he said he did not have the exact amounts to hand.

Minivan News understands from a source familiar with the matter that the government paid an initial GBP£1.5 million (US$2.4 million) on 24 April 2013, with the remaining amounts to be paid in monthly installments of GBP£300,000 (US$476,000) each.

According to the source, the Maldives Monetary Authority (MMA) remitted these monthly payments to Grant Thorton on May 22, June 27 and July 17.

STO and the Maldives-Burma oil trade

On 1 February 2012, a week before Nasheed’s government was toppled by opposition demonstrators and a mutinous section of the police, the Presidential Commission had forwarded a case for prosecution against Gayoom’s half-brother MP Abdulla Yameen over his alleged involvement in an oil trade of up to US$800 million with the Burmese military junta, during his time as chairman of the State Trading Organisation (STO).

“As of February 2012, Grant Thorton were ready with a criminal complaint, having obtained a number of documents relating to financial dealings from Singapore banks through court orders issued by Singapore courts,” stated Dr Ahmed Shaheed, former Foreign Minister and head of the Presidential Commission, shortly after the contract’s termination.

Yameen is contesting the presidential run-off against Nasheed on September 28. He has publicly dismissed the allegations on repeated occasions, distancing himself from the Singapore branch of the STO where the trade to Burma took place, as well as disputing any illegality in the trade.

The allegations first appeared in February 2011 in India’s The Week magazine, which described Yameen as “the kingpin” of a scheme to buy subsidised oil through STO’s branch in Singapore and sell it through a joint venture called ‘Mocom Trading’ to the Burmese military junta at a black market premium price.

That article drew heavily on a leaked draft of an investigation report by Grant Thorton, dissecting the contents of three hard drives containing financial information regarding transactions from 2002 to 2008. No digital data was available before 2002, and the paper trail was described as “hazy”.

Grilled by parliament’s National Security Committee over the matter in November 2011, Yameen denied any involvement in “micro-management” of STO subsidiary companies during his time as chairman until 2005.

Jumhooree Party vows to reopen investigation

In the lead up to the first round of the presidential election – in which the Jumhoree Party (JP) narrowly missed second place in the run-off to Yameen – JP vice presidential candidate Dr Hassan Saeed vowed to “reopen” the investigation into the STO oil case “as an issue of the highest priority.”

Dr Saeed was President Waheed’s Special Advisor at the time the Presidential Commission was dissolved, and the Grant Thornton contract terminated.

“Abdulla Yameen’s case was started under the previous government. While it was being investigated this government came into office, canceled the contract [with Grant Thornton] and paid 4.6 million pounds on the condition that it not proceed with the investigation, of which a large portion has now been paid,” Dr Saeed declared, during a press conference on August 31.

Saeed claimed that Grant Thornton attempted to communicate with Dr Waheed’s administration regarding the investigation but had received no reply. The accounting firm therefore decided that the contract was at an end and hired a debt collection agency, he revealed.

Asked by media if he had any role in terminating the contract as Waheed’s special advisor, Saeed claimed the contract was already cancelled when he became aware of it.

He further claimed that Dr Waheed was forced to reappoint STO Maldives Singapore Pvt Ltd and Maldives National Oil Company (MNOC) Managing Director Ahmed Muneez because of “pressure from Yameen.”

“Dr Waheed said he had to do it because of extreme pressure from Yameen,” Saeed said.

President Waheed, who polled 5.13 percent in the vote, has since declared he will back Yameen in the second round of the presidential election.

“I say this because in my opinion, the best path for this country cannot be the weakening of the constitutional framework, breaking the law, arson, or the creation of conflict,” Waheed said, explaining his decision to back Yameen in a statement published on the President’s Office website.

Likes

(0)Dislikes

(0)

Maldives must address “deteriorated” tourist services to protect industry: Chamber of Commerce

The Maldives National Chamber of Commerce and Industry (MNCCI) has warned that the “deteriorated” and “outdated” amenities used to support the Maldives’ lucrative resort industry will negatively impact growth across the tourism sector, if left unaddressed.

MNCCI Vice President Ismail Asif told Minivan News that despite the “seven star” reputation of the country’s exclusive island resorts, the group was receiving growing complaints that the service, amenities and treatment afforded to guests by the country’s public and private sector threatened to significantly damage the destination’s reputation.

The comments were raised after several multinational hospitality groups alleged earlier this month that the sale of the Maldives’ two main seaplane operators to US-based private equity fund Blackstone in February was having a “significant” negative impact on the wider tourism industry as a result of the monopoly created.

MNCCI Vice President Asif told Minivan News that the chamber had not received any “particular concerns” related to the Blackstone deal, but had instead noted growing criticisms of standards of service from state and private institutions vital to the country’s resort industry.

“We have had e-mails from foreign investors and business people about the general service and standards at the country’s airport as well as the quality of transportation [available to tourists],” he said. “We are not able to distinguish [whether the complaints] are about seaplanes or speedboats.

Airport condition

Asif also identified the current condition of Ibarahim Nasir International Airport (INIA), a general lack of amenities, and the attitude of customs and immigration officials towards foreigners visiting the country as major concerns needing to be addressed by the wider industry.

Late last year, the present government controversially scrapped a US$511 million contract signed under the previous administration with India-based infrastructure group GMR to develop and manage an entirely new airport terminal.

The state is subsequently facing a US$1.4 billion compensation claim from GMR for its decision to terminate the contract over allegations of corruption, claims ultimately rejected by the country’s Anti-Corruption Commission (ACC).

The MNCCI has nonetheless maintained that the government’s decision to abruptly terminate the GMR contract did not hurt foreign investor confidence, with Asif claiming that the existing airport structure could be modified to improve service standards. With the eviction of GMR construction of the new terminal is stalled at 25 percent complete, according to the government’s own engineering assessment.

“Foreign businesses don’t want to get into politics here. In the meetings we have had there are two major concerns raised. Internationals want the Maldives to remain as it is. The feedback we get is they want the airport as it is, but with improved services,” he said. “This doesn’t mean a new five story building is needed. For instance free wifi is not [at the airport at present]. Certainly not at the standards visitors would expect.”

Criticisms had also been raised over the conduct of customs officials and regulations banning tourists from bringing alcohol into the country to consume on the country’s resorts, according to the MNCCI. Asif claimed there was minimal information provided to visitors about restrictions on alcohol and pork products outside of resorts.

“Expensive wine is often confiscated from guests, who are not getting it back. I understand visitors must act within local laws, but it is also important to correctly inform them as well,” he said. “Often these are very expensive gifts given to people while they are travelling, and I don’t see why they cannot bring such items to their resort.”

“It’s not like tourists will bring large amounts of liquor with them. Often the value of the goods they are holding is high, but a customs person will have no idea of the goods or the culture. Their response is ‘liquor is prohibited here’,” he claimed, accusing police and other state authorities of favouring restrictive laws on tourists to reduce their own levels of responsibility.

Asif argued that all national bodies needed to take greater responsibility to ensure treatment of tourists matched the services being provided by the resort industry.

“If it is too much hassle for tourists to visit, people will not come here [on holiday] and will look to other destinations,” he said. “Tourism is is based around trying to make clients happy. We are concerned about this and the need to make things easier here.”

Stability concerns

The MNCCI has also stressed the need for political stability, the lack of which he had alleged has had a considerable impact on investor confidence and business development since the controversial transfer of power on February 7, 2012.

With a run-off vote scheduled for September 28 expected to decide whether former President Mohamed Nasheed or MP Abdulla Yameen will take office over the next five years, Asif said it was important to have an elected and head of state – no matter the candidate.

He argued that a Commonwealth-backed Commission of National Inquiry (CoNI) last year dismissed Nasheed’s allegations that he was removed from office in a “coup d’etat” had led to an increase of larger-scale investment – particularly with resorts.

However, with a number of properties remaining under construction, stability within the country’s domestic politics and court system was a huge problem needing to be addressed, he said.

Tourism Minister Ahmed Adheeb was not responding to calls at time of press in response to the MNCCI’s concerns.

Meanwhile, the government earlier this month said it hoped to secure longer-term financing to plug a shortfall in annual revenue that has seen the number of 28-day Treasury Bills (T-bills) sold by the state almost double in July 2013, compared to the same period last year.

Finance Minister Abdulla Jihad told Minivan News at the time that the state’s increased reliance on short-term T-bills between July 2012 and July 2013 reflected the current difficulties faced by the government in trying to raise budgeted revenue during the period.

Likes

(0)Dislikes

(0)

Comment: Maafushi a shining example of guest-house tourism

President Nasheed’s references to guesthouse tourism on the local inhabited island of Maafushi in the recent televised presidential candidates’ debate has drawn comment from many in the tourism industry (not to mention the opposition parties and the various political affiliates whose only job seems to criticise Nasheed at every available opportunity).

Those references by Nasheed were made for a very good reason. Because Maafushi is a shining example of how successfully guesthouse tourism has been implemented on an inhabited island, and illustrates how every employable person, every man or woman seeking a job on the island, has the opportunity to seek gainful employment.

Not only that, all the service-provision on the island has thrived on the commercial viability and need of the visitors coming to the island’s shores.

Cafés, restaurants, and water-sports businesses are thriving, as is the home gardening of local vegetables and fruits which can be sold to readily available buyers. All of these of course are what the guest-house policy is designed to achieve.

Occupancy of guest houses on the island is impressive with an average occupancy rate of over 70 percent – further demonstrating that demand is steady enough to support this newly emerging segment of the Maldives tourism product. In short, Maafushi demonstrates that guest-house tourism can indeed be successfully replicated across all the atolls of the Maldives.

MDP’s guest-house policy, like all of its policies, has been designed after extensive research, public consultation and with assistance and guidance of experts from the economic sector. During our public policy consultation process, which took the form workshops and repeated visits to local islands over several months, local entrepreneurs and concerned citizens alike consistently expressed their desire for an MDP policy “to bring tourism to our atoll”.

Without a doubt tourism, as it should, has remained the cornerstone of MDP’s vision for regenerating growth in the economy. The guest-house policy especially is aimed to kick-start local economies and more importantly to utilise the natural resources endowed on our beautiful islands. The competitive advantage of the Maldives as a tourist destination is the unique formation of the small islands, ringed as atolls, surrounded by reefs and ensconcing a breathtaking undersea marine life.

MDP’s policy team has asked all the right questions. What exactly is the Maldives tourism product? What are its components? At what point of maturity in the destination’s image should new components be introduced? Can occupancy rates be met if we introduced a different segment of tourism? What will guest-house tourism do to the existing resort tourism and safari-boats and dive-tours? Will budget tourism dilute the ability to market the destination successfully as a romantic island getaway on which exclusivity to guests is guaranteed?

These questions have been thoroughly discussed and scenarios considered before the policy was included in the MDP’s manifesto. The policy debates have produced many encouraging answers.

I believe the Maldives tourism industry and indeed local entrepreneurs in the country have reached a point in maturity in which new initiatives could be boldly introduced. The concern of the resort industry is that the current cache of 5 to 7 star island resorts built exclusively on uninhabited islands is emblematic of the destination’s image, with the view that any form of tourism on inhabited islands will create confusion and sully that image.

Looking at destination maturity across many other countries in the world, the timing is appropriate now to showcase what the rest of the country is about. Is there a single destination in the world without a network of guest-houses, youth hostels and locally based homestay arrangements? The existence of these facilities do not detract from the image portrayed by the destination marketing organisations, in fact they are seen as a necessary addition complementing the primary tourism product.

I am convinced such will be the case for the Maldives too. Forty years of tourism has created a specific image of the islands in the marketplace. And that is all about the islands’ natural beauty – such unique beauty not found in any other part of the world.

The guiding post for this policy is the answer to the question: Why do tourists come to the Maldives? The answer: to experience the spectacular natural beauty of its isles. Being on a resort or an inhabited island does not deprive a visitor or indeed any tourist of accessing such beauty.

To walk on a pristine white beach, snorkel in the azure seas or experience the breathtaking underwater world is entirely possible whether tourist facilities are provided on an inhabited island, or exclusive purpose built resort island.

Dr Mariyam Zulfa was former President Nasheed’s Tourism Minister at the time of the overthrow of his administration on 7 February 2012.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

Likes

(0)Dislikes

(0)

“Worst fears” over Blackstone seaplane buyout now a reality, warns hotel group

Several multinational hospitality groups have alleged that the decision to sell the Maldives’ two main seaplane operators to US-based private equity fund Blackstone is having a “significant” negative impact on industry profitability – potentially compromising local jobs.

Blackstone announced back in February this year that it had purchased a controlling stake in both the Maldives’ seaplane operators, Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT) for an undisclosed sum. Since the merger, the company has been operating under the TMA brand.

Major resort groups – speaking on condition of anonymity – have alleged that a number of properties were losing money on a monthly basis as a result of being reliant on services provided by the now-consolidated national seaplane operator.

“Worst fears”

In a letter addressed to the Secretary General of the Maldives Association of Tourism Industry (MATI) – obtained this week by Minivan News – one of the largest multinational companies operating in the country expressed concern that “our worst fears about the [seaplane] monopoly situation are becoming a reality.”

“You are of course aware that The Blackstone Group’s recent entry into the market has had the effect of eliminating competition and creating a monopoly in the charter seaplane market in the Maldives,” wrote the multinational’s CEO in a letter dated August 5, 2013.

“We were concerned from the outset about the potential disruptions this could cause in the market and have been monitoring the situation closely.”

The CEO added that, with discussions ongoing over securing a seaplane charter contract for its resort properties in the country, the company was particularly concerned at several contractual points being “forced” onto the group by TMA.

According to the letter, these concerns include:

A significant increase in prices from previous seaplane contracts

A reduction in services and benefits being offered to hospitality groups

An exclusivity clause forbidding any deals between the company and other seaplane operators

A “contractual link” to use landplane operations it alleges are set to be launched by TMA

Minimum contract term of three years for seaplane operations

“As you can see, the terms being forced upon hotel owners are highly anti-competitive and will have a significant negative impact on the market. We are being forced to accept unfavourable terms and TMA is trying to lock itself into a monopoly position by insisting on long-term exclusive contracts,” the multinational hospitality group’s CEO continued in his letter to MATI.

“Ultimately, these costs will be passed on to tourists, which will make the Maldives an even more expensive tourist destination and ultimately deter tourists from visiting , this will cost Maldivian jobs and damage the industry and economy.”

“Sensitive issue”

A senior official for another major multinational hotel group using TMA’s services said it had been experiencing a number of problems in recent months related to transporting clients by seaplane – describing the matter as a “sensitive issue”.

As well as general concerns about service costs, which it said were now “quite high”, the resort source claimed they had also noted issues with TMA cancelling flights without providing prior notification to the resort or its passengers.

In some cases, the resort official alleged that the resort had been given no choice but to provide customers with free meals and even additional nights stay on their property as a result of what it said were last minute cancellations by TMA.

“Although we have had no complaints from guests themselves, this has become quite expensive for the resort,” added the resort official. “I speak with many other resorts and many have said they are losing money monthly by having to provide these transfers [by seaplane].”

The source also noted what they believed was a decline in service in recent months, personally finding travelling with TMA a comparatively “unpleasant experience”.

“Right now, there is no competition as it is only TMA offering services,” the source said.

Domestic alternatives

Meanwhile, the general manger of a resort based in the north of the country, which is currently in negotiations with TMA to renew its contract, also raised concerns over the recent services being provided to guests since the takeover by Blackstone.

“We are not the only resort I know of who believes the services are not as good. There are less flights and more island hopping,” the source claimed.

The manager said that with the recent inauguration of a domestic airport in the country, the resort’s own reliance on TMA was no longer as strong, though they added that many guests preferred the opportunity to travel the country by seaplane where possible.

Despite the preference of many tourists to fly by seaplane, the general manager said that tour operators were now opting to use domestic air travel for customers travelling to the resort as “standard”.

“We are expecting more clients to travel by domestic flights, although some would rather pay to upgrade and fly by seaplane,” added the general manager.

Minivan News was awaiting responses from TMA, Blackstone, MATI Seceretary General Ahmed Nazeer, and Tourism Minister Ahmed Adheeb at time of press.

Investment climate

Speaking this week during a live question and answer session ahead of the upcoming election on September 7, President Dr Mohamed Waheed took full credit for securing Blackstone’s purchase of the country’s seaplane operators.

He cited the deal as an indication of the health of foreign investment under his administration, amidst criticism over his government’s termination of two high-profile foreign investment contracts, including a US$511 million valued agreement with India-based GMR to develop and manage Ibrahim Nasir International Airport (INIA).

“It is ridiculous to claim we are not getting foreign investments now. They are very eagerly coming, even more now. One example of a great investor that I brought in recently is Blackstone,” President Waheed said during the televised event.

Attorney General Azima Shukoor last month accused the previous government of failing to conduct sufficient research before signing several major foreign investment projects that have since been terminated by the present administration.

Speaking at the time of the sale back in February, former Minister of Economic Development Mahmood Razee, also former Minister of Civil Aviation, noted that the purchase of a controlling stake in the only two seaplane operators by a single company had effectively monopolised the market.

“This is a very exclusive market, and critical to the tourism industry. Even though both MAT and TMA operate the same aircraft, they have not previously been willing to cooperate,” Razee said, explaining that the Maldives did not have anti-monopoly laws which may have otherwise obstructed the sale.

Previously, resort managers could approach both companies seeking the better price for seaplane services, upon which they were reliant for the vast majority of their guest arrivals: “Now there is no effective competition, as the major shareholder is one and the same,” Razee said at the time.

He acknowledged that “in an ideal world” prices could come down, as the two companies have been operating identical aircraft but duplicating maintenance and other services.

Likes

(0)Dislikes

(0)

Six hundred flats awarded to police and military

Government authorities have awarded 600 apartments to Maldives Police Service (MPS) and Maldives National Defence Force (MNDF) personnel this week, including to Police Commissioner Abdulla Riyaz and senior police officers.

The housing development projects – providing 300 apartments for MPS, and 300 for MNDF officers – are being jointly managed by the government-owned Housing Development Corporation (HDC) in conjunction with the Police Cooperative Society (POLCO) and the MNDF co-operative SIFCO.

The opposition Maldivian Democratic Party (MDP) has described the awards as a continuation of the patronage policies that prevailed under the 30 year autocracy of Maumoon Abdul Gayoom.

Under the MPS’s MVR580 million (US$37.6 million) ‘Blue’s Housing Project’ 210 three-bedroom and 90 two-bedroom apartments will be built.

The housing scheme was described as being important for the maintenance of the police force’s welfare by Commissioner Riyaz during the project’s foundation laying ceremony in March. Acting Home Minister Ahmed Shafeeu presented recipients with the official documents yesterday (September 2).

Apartments were awarded to officers with at least 20 years of service and based on a points system used in other housing schemes, Chief Superintendent of Police Abdulla Nawaz told local media.

The awarding of flats marks the beginning of the POLCO project, which is seeking private investment for a further 150 apartments, said Commissioner Riyaz during Monday’s ceremony.

Last month, 50 apartments on Hulhumale’ were handed over to police officers by President Dr Mohamed Waheed, who expressed hope that more housing would be made available exclusively for police and military officers.

Since the controversial transfer of presidential power involving elements of the police force, 1000 officers have been promoted and 110 new officers were hired. More recruits have been sought for a “special constabulary” reserve force, a loan scheme has been established for officers, and arrangements have been made for officers and their families to receive cheap accommodations and medical treatment in Sri Lanka.

The Maldives Police Service had not responded to Minivan News’ enquiries at time of press.

MNDF flats

Meanwhile, the government has re-started construction of 300 housing units on Hulhumale’, specifically for MNDF officers.

President Waheed, Defence Minister Mohamed Nazim, and senior MNDF officials laid the foundation stone for the apartment complex during a ceremony held on Hulhumale’ yesterday.

The apartments will be given to female officers who had not been previously awarded housing units, as well as to retired officers, the MNDF told local media.

Once constructed, the housing units would provide MNDF personnel and their families “adequate accommodation” as many are currently “living under a degree of hardship, having to rent their living spaces,” Waheed said during yesterday’s ceremony. Nazim added that the project would provide facilities such as playgrounds, a swimming pool, and a gym for residents.

President Waheed also awarded 50 apartments to MNDF personnel and their families last month, although seven of these flats had yet to be assigned.

Waheed noted during yesterday’s ceremony that the provision of shelter for military personnel was not an act of kindness, but rather a government obligation.

“The development and welfare of personnel should be improved in accordance with financial capability of the government, and the flats awarded today provides evidence of that fact,” Defence Minister Nazim stated at the time.

In April 2012, MNDF officers were given two years of allowances in a lump sum, which amounted to MVR 150 million (US$10 million) for the institution.

The Maldives National Defence Force was also not responding to enquiries at time of press.

“Patronage” continues: MDP

The Maldivian Democratic Party (MDP) believes the award of 600 housing units to MNDF and MPS officers is a continuation of the patronage system established during former President Maumoon Gayoom’s 30-year autocratic rule.

“In the light of extensive exposes, such ‘patronage’ is familiar to voters from the single party dictatorship of Gayoom and I believe they will simply say to each other ‘I told you so’,” MDP MP and Spokesperson Hamid Abdul Ghafoor told Minivan News today (September 3).

The MDP previously raised concerns about whether the already constructed flats – which it contends forms part of the “Veshi Fahi” Male’ (decongestion) project launched under the previous government in 2011 – were being given to the “needy” and most deserving.

Ghafoor said it was “very concerning” that police should be given flats exclusively, to the detriment of teachers, doctors and other civilians. He also questioned how officers themselves had been selected for the process.

While some of the officers may have deserved the housing, there was concern that some officers involved in last year’s mutiny had been rewarded with flats, claimed Ghafoor.

Last month, President Waheed requested parliament approval to obtain a US$29.4 million loan from the Bank of Ceylon to finance the government’s budget and manage cash flow.

The Ministry of Finance and Treasury was seeking to secure the loan as a way to “enforce” the 2013 budget approved by parliament, stated a letter from the President’s Office read during a parliament session held on August 13.

Likes

(0)Dislikes

(0)

Cabinet’s convention centre re-zoning “for political gain”: Addu City Mayor

The Cabinet has advised President Mohamed Waheed Hassan to overturn the previous government’s decision to make the Addu Equatorial Convention Center (ECC) zone an ‘uninhabited area’, potentially allowing the sale of prohibited commodities such as liquor, as practiced for resorts.

The area was designated ‘uninhabited’ on November 19, 2011 by former president and current presidential candidate Mohamed Nasheed.

Yesterday’s recommendation originated in the Finance Ministry, which submitted a paper on the subject during Monday’s cabinet meeting, the president’s office reports.

Spokespersons at the President’s Office said they could not provide details on the recommendation; Addu City Mayor Abdullah Sodig reports that the council was not consulted on or informed of the Cabinet’s recommendation, and claims that it was made for political gain in the face of this Saturday’s presidential elections.

“The Cabinet recommendation opposes Nasheed’s [tourism development] policy, and they want to show the public that they are trying to give land to people who need it. But it’s really just political gain,” Sodig said. “Three days before elections, I don’t think it’s about giving people land.”

Zoning laws in the Maldives determine which islands and areas may be developed for tourism and therefore exempted from national laws prohibiting the sale of alcohol and pork and enforcing compliance with cultural dress codes. Maldives’ southern atolls, including Addu and nearby Gnaviyani atoll, have historically benefited the least from the country’s tourism economy.

President Nasheed decreed the ECC zone uninhabited prior to the 2011 SAARC summit in Addu, effectively laying a foundation for resort, guest house and other tourism-oriented development activities.

Nearly two years since this decree the mood has shifted dramatically. Bids to develop the convention center and surrounding area were interrupted by the February 7, 2012 transfer of power, after which the new administration retained the building as a “national asset”.

Formerly enthusiastic about Addu’s growth potential, Sodig today expressed deep frustration with the government’s inaction.

“[The Convention Center] is never dusted, the toilets are never cleaned, the floors never polished,” he said, adding that the facility has only been used for a few wedding parties and political rallies since it opened in November 2011.

Sodig claimed that his repeated requests for maintenance funds and development activity had received minimal response from President Waheed’s government.

“I took the State Minister of Housing to the building and asked him to look into maintenance. I even met with the Attorney General, Azima Shukoor, for the same purpose in Male,” said Sodig. “She said she would think about it. But until now they have done nothing.”

Sodig reports that without tourism development the ECC, which as of January was mired in MVR 4 million ($260,078) of unpaid electricity bills, “would end up as a liability”. As of June, the Maldivian government owed State Electricity Company (STELCO) MVR 543 million ($35.2) in unpaid electricity bills.

The Cabinet’s sudden action this week suggests that the ECC zone is now being treated as a pawn in the housing debate for the presidential elections. Addu Atoll is home to a significant percentage of the population, and has historically supported President Nasheed’s Maldivian Democratic Party (MDP).

In 2002, 700 ECC-zone land plots were allocated to Adouin families. According to the mayor, only 150 plots have been officially registered as ‘in use’. In an atoll where the average household income is MVR 60,000 ($3,900) per year, the approximate cost of building a two-bedroom home is MVR300,000 ($19,500).

While Adduans who received land in the ECC zone objected to President Nasheed’s zoning decree in 2011, they were content with the island council’s compensatory proposal, Sodig said. He added that he was not aware of any recent complaints that might have triggered the Cabinet to recommend zoning reversal.

The ministries of Finance and Housing had not responded to calls at time of press.

Likes

(0)Dislikes

(0)

World champions and Maldivian locals shred ‘sultans’ during Four Seasons surfing competition

Famed big wave surfer Taylor Knox dominated the Four Seasons Surfing Champions competition, winning the twin-fin, thruster and Grand Champions Final events, while six-time Maldives national champion Hussain ‘Iboo’ Areef clinched the Domestic Champions competition for the second year.

This is the third consecutive year the Four Seasons Resort at Kuda Huraa and luxury surfing pioneers Tropicsurf have hosted the contest for the ex-world champions. It is the second year Maldivian talent has competed in this prestigious event.

Six ex-world champions – Tom Carroll, Layne Beachley, Damien Hardman, Tom Curren, Taylor Knox, and Pedro Henrique – “represented the toughest field ever assembled” at the Four Seasons competition, according to the event organisers.

They competed in single-fin, twin-fin, thruster (three-fins) events that kicked off last Tuesday (August 27) at Thamburudhoo Island – home to two of the Maldives’ “premier” surf breaks ‘sultans’ and ‘honkeys’.

The two surfers who accrued the most points following the three divisional rounds qualifyied for the Grand Champions Final. Divisional and Grand Champion winners split a prize pool of US$25,000.

The evolution of the surfboard was showcased by the competition’s format, with the old school 1970s single-fin in round one, and round two celebrating the twin-fin boards that dominated during the early 1980s, while round three featured the state-of-the-art contemporary three-fin thrusters.

Knox, who retired as one of the most respected surfers on the Association of Surfing Professionals (ASP) world tour last year – aged 41 – said he achieved today what he had failed to do at the elite level.

“I could never do it on the world tour, I had to come to the Maldives and learn off these guys, and as Kelly Slater said ‘I’m one of the best surfers but not a good competitor’, but that’s changing now,” said Knox.

Single-fin division

Former three-time ASP world champion, American Tom Curren defeated former world junior champion Brazilian Pedro Henrique to win the single fin division of the Surfing Champions Trophy the first day of competition.

The surfing legends had to contend with high winds and sporadic rain throughout the day at ‘sultans’ which forced the organisers to stop and start the event several times throughout the day.

“Today was difficult because the wind comes around and creates rips [on the waves],” Curren told Minivan News.

“I’ve surfed in the Maldives three times before. When conditions are good, these are some of the best waves in the world,” said Curren. “The water is beautiful, the water temperature is warm, the reefs are well shaped and swells come from far [out to sea] when its less windy.”

“It’s rarely heavy, but a lot of fun,” Curren continued. “It brings a lot of people here. The Maldives is quite a destination for intermediary surfing.”

Despite the difficult conditions Pedro Henrique was able to make the most of the four foot waves, beating defending event champion Australian Damien Hardman in the semi-final and taking second in the final.

“This was the first time I’ve surfed a single fin,” Pedro Henrique told Minivan News. “It required heavy use of the surfboard’s rail and different body balance.”

Twin-fin division

The surfing pros faced another day of difficult weather conditions and “testing but fun” three foot waves during the twin-fin division held Saturday (August 31) at ‘sultans’.

Lone female competitor Australian Layne Beachley – the only woman to win seven ASP world champion titles, and arguably the greatest female surfer in history – was literally blown off her first wave due to strong offshore winds, causing her to ultimately suffer an opening round loss.

“They were really challenging conditions out there,” said Beachley. “Never underestimate the competitive spirit of these guys, they don’t want to lose, especially to a girl. It doesn’t matter how many world titles you have,” she added.

Competition was fierce with successful twin-fin performances requiring speed and maneuverability.

Ultimately, it was big wave surfing legend Taylor Knox defeated Tom Curren to claim the divisional win.

“That was an emotional contest for me because I was surfing with all my hero’s,” said Knox. “It was just really cool today, everyone I came up against was just surfing so well.”

Thruster division and Grand Champions final

After a week of surfing in stormy conditions, light offshore winds, sunny skies and steady four to five foot surf made for a fierce final day of competition yesterday (September 1).

Beachley narrowly missed out on the semi-finals after being defeated by former two-time world champion, Australian Damien Hardman on the buzzer during the thruster division round one heat.

Ultimately Knox’s “extremely committed power surfing” in which he scored the tournament’s first-ever perfect 10-point ride and tallied the event’s highest heat score enabled him to to defeat Hardman in the thruster division final.

Hardman noted that Knox’s performance raised the bar of the entire contest.

Following the thruster division, the Grand Champions Final pitted Knox against Curren and culminated in a showdown during the final 30 seconds of the competition, when Knox scored a late 9.17 to claim victory.

Domestic Champions competition

The Domestic Champions contest kicked off last Monday (August 26) with 14 local surfers facing off on conventional thruster boards, vying for glory and the MVR35,000 (US $2275.7) prize money pool.

The competitors’ excited energy escalated during the short 45 minute trip to Thamburudhoo – the last untouched island in Kaafu Atoll with public surf break access – known for its left and right hand breaks.

While en route to ‘sultans’, local surfers from Himmafushi and Thulusdhoo islands in Kaafu Atoll appeared on ferries they had arranged to transport them from their home islands to compete.

Although conditions at ‘sultans’ were not ideal – choppy seas, rain, wind, and three to four foot “fat lady” waves – the weather and surf improved by early afternoon.

After six fierce but friendly 20 minute heats, four surfers advanced from the semi-final round to compete in the final, last year’s Domestic Champions winner and six time Maldives’ national champion Hussain ‘Iboo’ Areef, Ahmed ‘AJ’ Aznil, Ahmed ‘Ammadey’ Agil, and
Ahmed ‘Madey’ Rasheed.

“This is a great opportunity for the Maldives’ best surfers to showcase their talent alongside world legends at our ‘home break’ of Thamburudhoo – the heritage and heart of Maldivian surfing,” said Maldives Surfing Association (MSA) President Ahmed Fauzan ‘Karo’ Abbas.

Following the competition heats, Tropicsurf Founder and CEO Ross Phillips conducted a coaching session for the Maldivian surfers. They were enraptured as Phillips leveraged his 24 years of professional coaching experience to delineate the five fundamental principles of surfing: 1) weight distribution, 2) center of gravity, 3) how the surf board is used (e.g. rail transitions), 4) body rotation, and 5) extension (for speed).

“I’m very happy and willing to offer coaching [tips] and give the Maldivian surfers my time,” Phillips told Minivan News.

During the coaching session, Phillips explained that professional surfers “make it look easy, like they’re not trying” and develop their own personal style, which is “all about body movement and flow”.

“The average surfer has a lot of body movement and minimal board movement. But for the board to maximum ‘radical’ movement, body movement should be minimal,” he continued.

Phillips also explained some of the science behind surf board shaping as well as providing contest strategy tips before everyone – including Phillips – took to the water for the last surf of the day.

“We didn’t know the five principles, we tried it [after the coaching session] and it helped a lot,” exclaimed Maldivian competitor Azly ‘Dude’ Nazeem.

“It was a good experience to participate, we’ve never had a coach before. No one taught me [to surf], I’ve never had a coach in my life,” added semi-finalist, 21 year-old Hussain ‘Kuda SP’ Rasheed.

The Maldivian surfers who attended the coaching session were elated on the trip back to Male’, having experienced noticeable improvements after applying what they learned during the brief coaching session with Phillips.

Domestic Champions final

Maldivian finalists Hussain ‘Iboo’ Areef and Ahmed ‘AJ’ Aznil from Male’, as well as Ahmed ‘Ammadey’ Agil from Thulusdhoo Island in Kaafu Atoll faced off in the late afternoon after spending the day chatting with the pros aboard the Four Seasons’ luxury catamaran.

Ahmed ‘Madey’ Rasheed was unable to return from his home island in Gaaf Dhaal Atoll to compete.

Areef dominated the competition for the second year running, scoring a 10 during the trials and taking an early lead during the final. He ultimately won the competition, with Agil placing second.

“It feels great to win. I applied the contest strategies [Phillips discussed during his coaching session] and surfed smart,” 36 year-old Areef told Minivan News.

“I made sure to have an early start and caught a wave right after the buzzer. That was really good because it gave me lots of confidence and set the bar for the judges,” Areef explained. “After that I waited for good waves with scoring potential.”

His message for the young generation of Maldivian surfers is to “surf a lot, get advice from experienced people, watch surf movies, and always push the limits.”

“This competition was really good from a local point of view, it was an awesome opportunity,” third runner-up Aznil told Minivan News.

“It was great to have a chance to hang out and talk to the champions,” he continued.

Aznil, also a finalist in last year’s event, noted that the bigger, cleaner waves made for a great last day of competition.

Although this was the second year the Four Seasons hosted a Domestic Champions competition for Maldivian surfers, this was the first time the Maldives Surfing Association (MSA) – the country’s surfing governing body – was involved.

While there were some hiccups, ultimately representatives from the Four Seasons and Tropicsurf sat down with some of MSA’s leaders – who were also competition finalists – after the event to discuss how they can better involve MSA and the local surfing community in next year’s competition.

“This year was the first time communication was established between MSA and the contest organisers,” Areef explained. “We had a long meeting with these guys and they are going to better involve our members in the event next year.”

“We were not asking for much – we don’t care about money – just fair involvement for the development of our local surf community. To be given an opportunity for local judges to improve their skills, to be involved in event organising, and to gain experience from the whole event,” he continued.

“Next year will be a bigger event with better local involvement, including shadow judging, beach marshalls, and we’re hoping locals will be given wildcards to compete in the main event,” he noted.

“It was great to sit down to talk and work it out,” added Aznil.

Likes

(0)Dislikes

(0)