Category: Business & Tourism

Maldives business news

Customs staffs complain to ACC over unfair promotions

More than 200 staff working for the Maldives Customs Department have signed a petition submitted to Anti-Corruption Commission (ACC), alleging that employees had been promoted in violation of regulations.

According the petition the Customs Act mandates promotions be given according to specific regulations, which staff alleged had not been respected.

The staff members alleged that promotions had been given in a way that would benefit individual persons, and had divided staff in the department.

Customs workers told local media that they had met with the Commissioner General of Customs Mohamed Aswan and Home Minister Ahmed Shafeeu to discuss the issue.

The staff also warned that they would go on strike if the issue remained unresolved for too long.

Chair of the Anti-Corruption Commission (ACC) Hassan Luthfy told Minivan News that the petition had been submitted last week.

”It mainly states that there were some promotions given recently against regulations,” Luthfy said. ”The customs department have a lot of staff in total and some of them complained that the promotions were given against the regulations.”

“We have started looking in to the matter now,” said Luthfy, explaining that he would give further details after investigating the issue.

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PPM unveils economic plan, to release full manifesto in “days”

The Progressive Party of Maldives (PPM) has said it expects to release its full manifesto both in print and online in the next 48 hours.

After the party yesterday (August 30) unveiled its economic policy, PPM Youth Wing President Dhunya Maumoon was quoted as saying that a full manifesto document would be available to the public in the next “couple of days”, according to local newspaper Haveeru.

PPM Presidential Candidate Abdulla Yameen is the last individual contesting the election on September 7 not to have launched his full manifesto.

His rivals; MP Gasim Ibrahim of the Jumhoree Party (JP); President Dr Waheed – standing as an independent – and former President Mohamed Nasheed of the Maldivian Democratic Party (MDP) have all released blueprints for their respective plans if elected to office.

Yameen – half brother of former autocratic President Maumoon Abdul Gayoom – has this week nonetheless detailed key factors of the PPM’s economic policy should he become head of state.

According to Sun Online, the policy will include attempts to lower current interest rates on loans for develop tourism or fisheries businesses. He expressed concern that while interest on loans was offered by the country’s banks at a rate between 10 to 12 percent, members of public with savings in these same banks were receiving between three to four percent of their deposited funds.

Yameen was quoted pledging to try and curb the difference between the costs associated with borrowing and saving in the Maldives in line with other countries.

Current tourism Minister and PPM Deputy Leader Ahmed Adheeb also helped unveil the party’s economic policy, pledging to oversee “serious changes” to the country’s economy at macro-level.

According to Sun Online, Adheeb unveiled the party’s plan to launch ‘economic regions’, while also showing videos detailing several harbour constructions and a proposal for an airport in Kulhudhuffushi.

Minister Adheeb was not responding to calls at time of press, while Minivan News was awaiting a response from PPM MP Ahmed Nihan concerning the party’s manifesto launch.

Despite holding the largest number of MPs of any party serving in President Waheed’s coalition government, PPM Leader former President Gayoom earlier this week expressed concern that the Maldivian economy had been “seriously damaged and destroyed”.

He argued that Yameen was the only presidential candidate with the required experience to bring economic stability to the country.

JP manifesto

Speaking during the launch of its own manifesto earlier this month, the JP, led by business tycoon and MP Gasim Ibrahim, claimed it expected to finish above the Progressive Party of Maldives (PPM) in the first round of the upcoming presidential election, before securing a second round victory.

JP Policy Secretary Mohamed Ajmal has said the party’s manifesto included a pledge for a ‘holistic’ approach to taxation, promising to introduce income and capital gains tax, and increase taxation of the wealthy.

This would include reducing the 60-70 percent of national income devoted to recurrent expenditure to 40 percent, by investing in local infrastructure and raising revenue through the private sector.

The JP has also launched a ‘Religion and Nationalism’ policy, pledging to strengthen Islam in the Maldives, including the establishment of an Islamic University, introducing Arabic as a teaching medium, strengthening relations and donor ties with other Islamic nations, and making the Quran a mandatory school subject.

Forward with the nation coalition

Meanwhile, President Mohamed Waheed’s ‘forward with the nation’ coalition, which claims to have been the first party to fully outline its election plan after rolling out its policies in July and early August – has outlined four key campaign focuses based around Islam, social protection, education and environment.

Among the incumbent’s pledges are plans to establish “floating hospitals” in the north and south of the country, a 50 percent reduction in household energy bills, opportunities for empowering women along with the provision of social protection and education and vocational training for Maldivians up to 18 years of age.

MDP manifesto ‘Costed and budgeted’

The opposition MDP has published what it calls a ‘Costed and Budgeted’ manifesto, including plans to establish 51,000 job opportunities, a savings scheme for higher education, a student loan scheme, a MVR2000 (US$129) allowance for every single parent and person with special needs, and an allowance of MVR2300 (US$149) for the elderly.

Former President Nasheed also pointed out the importance of introducing a development bank in the Maldives during a rally to launch the full document on August 24.

“Take a look, this manifesto will not contain even a single policy which has not been accounted for. Even if we are asked to submit a budget to the parliament by tomorrow, we are ready to do so,” he said during the launch.

The party has separately unveiled policies based around expanding mid-market tourism through focusing on supporting guesthouses on inhabited islands, and a specific youth development plan focused on sports and entertainment.

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MMA slams state spending as government claims expenditure curbed

The Finance Ministry has said it has managed to reduce state spending over the last twelve months, despite the Maldives central bank raising fears over the current “beyond appropriate” levels of government expenditure.

Finance Minister Abdulla Jihad has told Minivan News yesterday that efforts had been successful over the last twelve months to curb recurrent government expenditure, while its borrowing had at the same time remained consistent.

According to Jihad, the government’s decision in April to suspend state-financed development projects had also helped to curb outgoings as the country looks to secure foreign finance for the purpose of budget support.

“We have had difficulties this year with spending, so we have taken these initiatives,” he said.

The suspension of development projects was taken after the state was found to have exhausted its annual budget for recurrent expenditure (including salaries, allowances and administration costs) in the first quarter of 2013

The decision was made in same month that currency reserves in the Maldives were found to have “dwindled to critical levels”, according to the World Bank’s bi-annual South Asia Economic Focus report.

State borrowing

Jihad said that state borrowing had remained consistent over the last year, after the Waheed administration had paid back US$100 million in treasury bonds to Indian authorities by a requested date of February 2013.

Earlier this month, President Waheed pledged that the country would be in a position to restart development projects next year as a result of his government repaying bills incurred through the previous administration’s borrowing.

While President Waheed had previously said he would not resort to borrowing from foreign governments in order to finance his administration, Jihad today confirmed the state was “moving ahead” with efforts to secure credit from overseas sources in Saudi Arabia and Sri Lanka.

Earlier this month, the government requested parliament approve a US$29.4 million loan from the Bank of Ceylon to finance the 2013 budget approved by parliament.

In July, the President’s Office confirmed that discussions had been held with Saudi Arabia seeking a long-term, low interest credit facility of US$300 million to help overcome the “fiscal problems” facing the nation.

Parliamentary approval would be required for the credit facility before it could be obtained by the government, Jihad added.

Vicious cycle

Governor of the Maldives Monetary Authority (MMA) Dr Fazeel Najeeb  (August 23) was quoted in local media as warning that “excessive” government expenditure was directly responsible for the country’s present economic issues.

Speaking during a function to celebrate three years since the formation of the Maldives Inland Revenue Authority (MIRA), Dr Najeeb claimed that increased government expenditure required large amount of loans that would put the country in a vicious lending cycle.

He also expressed concern at a perceived slow down in the country’s private sector and bank investments increasingly in government Treasury Bills (T-bills).

“The value of Rufiyaa is dropping because government accounts do not have the money, because it is a necessity to print large quantities of money,” he was quoting as saying by Sun Online.

Najeeb said that a long-term economic stability plan would be needed in the country as part of attempts to increase foreign investment, reduce inflation, and curb printing of the Maldivian Rufiyaa in order to calm an increase in prices.

“The plan shall include new foreign investments, aim to reduce inflation, decrease the printing of money and cease it altogether. This will decrease the pressure on the Rufiyaa”.

Minivan News was awaiting a response from Dr Najeeb at time of press.

Waheed Administration’s spending

In July 2012, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

However, the Finance Ministry in the same month announced its intention to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totaling MVR443.7 million (US$28.8 million), were to be paid back in monthly instalments starting immediately.

Meanwhile, the original budget proposed by the state for 2013 had also included salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, some MPs at the time estimated that the state wage bill would shoot up by 37 percent.

Parliament eventually passed a MVR15.3 billion (US$992 million) state budget on December 27 last year, after it was reduced by more than MVR1 billion (US$64.8 million) from the MVR16.9 billion (US$1 billion) proposal previously submitted by the Finance Minister.

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PISCES “enhancements” will match Nexbis technology: Defence Minister

Defence Minister Mohamed Nazim has said that “enhancements” will be made to US Government-supplied border controls in the next few days, amidst allegations the technology is not an adequate replacement for the scrapped Nexbis system.

Amendments will be made to the Personal Identification Secure Comparison and Evaluation System (PISCES) installed this week in order to ensure the US technology “matches” the capabilities of a previous border system provided by Malaysia-based IT group Nexbis, Nazim told Minivan News yesterday (August 21).

Nexbis’ border control system, used at Ibrahim Nasir International Airport (INIA) since September 2012, was replaced on August 20 following the government’s decision to terminate its concession agreement for the use and management of the system.

The US-provided PISCES system would only provide one of several functions afforded by the “total solution” Nexbis had installed, alleged a local source experienced in working with both border control systems. The source spoke to Minivan News on condition of anonymity.

The two systems are not compatible – at present PISCES can handle just one of the many modules managed by technology provided by Nexbis, the source continued.

“Nexbis provided a total solution that not only allowed for checking of biometric data, but would also be used to process visas and work permits.”

By comparison, the source claimed that PISCES was expected to serve effectively as an extension of the US government’s own border tracking system, allowing the country – as well as Maldives officials – to monitor the movements of specific individuals passing through the country.

Meanwhile, Nazim claimed that PISCES, which went into operation at INIA yesterday (August 20), was continuing to be developed by US and local authorities in order to meet the criteria required by Maldives immigration officials.

“During training [to use the system], we realised that we needed to do enhancements,” he said.

US officials are continuing to work with authorities to provide PISCES technical support, which had been provided as a “free gift” by the US government under a Memorandum of Intention agreed in March this year, added Nazim.

Asked if the country’s border controls could be open to abuse while these enhancements were being implemented, Nazim responded that several amendments were expected to be completed in the coming days.

“Total solution” to be replaced with “terrorist tracking”

The Department of Immigration and Emigration has confirmed that the PISCES system came into operation yesterday morning, with officials representing Nexbis and the government present to oversee the transfer of technology.

The system was functioning and had been transferred without many issues after coming online this week, said Immigration Department Spokesperson Ibrahim Ashraf.

PISCES is still presently reliant on data from the Nexbis system, though technical staff from the Malaysian firm and the Immigration Department were currently working on transferring the necessary information, said Ashraf.

However, immigration officials today requested Minivan News contact the Ministry of Defence over alleged challenges resulting from the implementation of the PISCES system.

A spokesperson for the US Embassy in Sri Lanka reiterated comments made in an official statement released in March that the system had been “tailored to the Maldives’ specific border control needs”.

Nexbis last week rubbished the Maldivian government’s reasons for terminating their agreement to build and operate a new border control system, accusing human traffickers – fearful of a more comprehensive system – of being behind the decision.

“The US PISCES system that is meant to replace the MIBCS [Nexbis system] is not a border control system nor is it an immigration solution, rather it is a terrorist tracking system that simply captures information of travellers and Maldivians who transit in and out of the country,” read an official statement.

In June, the Maldives was placed on the US State Department’s Tier Two Watch List for Human Trafficking for the fourth consecutive year.

The PISCES system, designed by US tech firm Booz Allen Hamilton, has already been implemented in numerous other countries around the world, including Pakistan, Afghanistan, Iraq, and Thailand.

Nexbis’s statement also took issue with Defence Minister Nazim’s claims that the installation of its system was causing “major losses” to the state – this claim was reported in local media on August 6 when the Malaysian company was informed it had 14 days to vacate the country.

Nexbis contended that the official notice of the termination it had received contradicted the statement given by the Defence Minister.

The company argued that its system was also installed and operated free of charge, and that the US$2.8million it had billed the government was the amount due for the arrival and departure of foreigners as per the original agreement.

The terms of the agreement are governed under Singapore law, as are those of the GMR airport contract – terminated in November last year. The cancellation of this deal, the largest foreign direct investment in the country’s history, has led the GMR to seek US$1.4billion in compensation.

The Nexbis deal has been dogged by allegations of corruption since it was agreed under the government of former President Mohamed Nasheed in 2010. The failure of the Anti-Corruption Commission (ACC) to conclusively prove foul play in this respect has exonerated Nexbis from such charges, the company has claimed.

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Leaked Grant Thorton report reveals beneficiaries of BML’s risky pre-2008 lending

Additional reporting by JJ Robinson

A leaked draft of a report into the Bank of Maldives’ (BML) lending practices prior to 2008 has identified those behind potentially destabilising breaches of both BML and Maldives Monetary Authority (MMA) guidelines.

The asset recovery investigation by forensic accounting company Grant Thornton, drawing on the 2008 Attorney General’s report on BML, concludes that it would have been “impossible for the [BML] board to not have been influenced” in the granting of significant exposures in the form of credit to a select coterie of Gayoom-era affiliates.

The document reveals well-connected individuals bypassing BML rules regarding the handling of non-performing assets, with a number of large companies belonging to politically-active businessmen continuing to receive credit despite failing to satisfactorily meet previous repayment obligations.

“The large exposures that BML held, were in the main, due to members of the board or their relatives,” the report found.

“Due to the fact that the largest exposures of the bank were from Board members and/or their families, it would be unrealistic for the Board to provide any clear independent review of the banking facilities provided, and would in [our] view form conflict of interest issues for those Board Members involved,” it added.

The report names a number of individuals and business groups who benefitted from the state bank’s loan and overdraft facilities towards the end of Maumoon Abdul Gayoom’s 30 year tenure as head of state.

The government was handed a US$10million (MVR 154.2 million) invoice from Grant Thornton last year in what former Foreign Minister Dr Ahmed Shaheed told Minivan News was a penalty fee for stopping the investigation initiated under Gayoom’s successor Mohamed Nasheed.

Prior to the alleged request from the current government to halt the investigation, Grant Thornton had uncovered evidence of an alleged US$800 million oil trade involving former head of the State Trading Organisation (STO) and current presidential hopeful Abdulla Yameen. Shaheed alleged that the accounting firm was contracted to receive a percentage of any assets recovered as a result of its work.

The private parties named in Grant Thorton’s BML assessment include the Sun Group, Lily Group, Sultans of the Seas, VA Group, Afeef Group, Villa Group, Thasmeen Ali, VB Group, and Rainbow.

“Many of the above parties benefited from loans that were used to assist in purchasing leases for resorts, related tourism businesses etc, of which would not have been achieved without the connections held by certain individuals,” the report said.

The report also makes particular mention of the role of Ibrahim Gasim, both Finance Minister and non-executive BML board member at the time of the majority of cases documented within the Grant Thornton report.

Gasim, who is also standing as the Jumhoree Party (JP) presidential candidate in next month’s election, would have been responsible for the appointment of the majority of the BML board at this time.

Grant Thornton’s report revealed that Gasim’s Villa Group had been loaned MVR481,299,571 (US$37,601,520) as of October 31st 2008, representing 32.4 percent of the bank’s entire capital.

This represents one of a number of examples of such exposure featured in the report, despite the Bank’s acquiescence in 2006 to an MMA request to reduce any credit guaranteed to individual or related group borrowers to 30 percent of overall capital.

After repeated lobbying, the MMA increased this amount to 40 percent. Grant Thornton suggested that this extension request was due to the fact that a number of the groups mentioned in its report were already exceeding the original lower limit.

In rejecting one of BML’s requests for an increased credit exposure limit, the MMA wrote that “such concentration of credit is far in excess of the legal lending limits of the bank and it could seriously threaten the bank’s position, and the stability of the whole financial sector,” the leaked document stated.

Even with this increase, Sun Group is reported to have exceeded this limit after January 2008, with loans and overdraft facilities reaching  MVR 607,345,442 (US$46,879,400) as of 31 October 2008.

“This amounted to 40.8 percent of the Bank’s capital as at 31 October 2008,” the report observed.

Loans and overdraft facilities provided to Afeef Group totalled MVR 245,123,414 (US$19,150,266) as of October 31, 2008 – approximately 16.5 percent of BML’s total capital at the time.

Sun Group Chairman and majority shareholder Ahmed Shiyam’s Maldivian Development Alliance (MDA) meanwhile this week announced its decision to form a coalition the Progressive Party of Maldives (PPM), headed by former President Gayoom.

Alterations to BML’s internal loan approval mechanisms for board members in May 2007 resulted in the bypassing of the bank’s Credit Committee.

“This effectively meant that those Board Members that had applied for credit facilities were approving their own loans,” stated the draft report.

BML board members complicit in self-approving their own credit lines include Mohamed Ahmed Didi (Sultans Group shareholder), Ahmed Hamza (Director of the VA Group), and Gasim (Chairman of the Villa Group).

Director Mohamed Adil also features prominently, being cited in one particular example of a board meeting in which he approved the re-financing of the Sultan Group’s debt at the same time as being the group’s major director/shareholder.

BML’s recovery

In the intervening years, BML wrote off multiple toxic non-performing assets and returned to profitability, largely by outright ceasing to pay dividends to shareholders for almost five years.

The Bank’s board approved a MVR 50 million (US$3.23 million) interim dividend to shareholders in July 2013, the first since 2008.

“This marks the end of a painful and challenging journey that began in 2009 when the bank reported record level non-performing loans. However, in recent years Bank of Maldives has reported record level earnings and operating profit and the company returned to profit in 2012,” read a statement from BML.

BML’s former CEO Peter Horton, a UK banker appointed in February 2011 with extensive experience tackling distressed portfolios and problem lending across Africa as part of Barclay’s corporate turnaround team, resigned in August 2013 to head up Bermuda Commercial Bank.

“The profitability and dividend payment will be sustainable going forward,” said Horton in the bank’s July statement. “This is an interim dividend and at MVR 9.29 [a share] for the half year places us in a strong position to pay the highest full year dividend in the Bank’s recent history at year end”.

Download the leaked GT report

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Budget shortfall leads Maldives to seek $US29.4 million Bank of Ceylon loan

President Mohamed Waheed has 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 is 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 Tuesday (August 13).

The Finance Ministry informed the President’s Office that the Bank of Ceylon would provide the Maldives’ government a loan of US$29.4 million, at a six percent interest rate, to be repaid within six years in monthly payments of US$490,000, according to local media.

The Government of Maldives believes the short term loan offers “good terms” and will provide the support necessary to finance the state budget and cash flow. The President’s Office letter also noted that the graduation of the Maldives from least developed country status has made it “extremely difficult” to obtain loans with low interest rates.

Previously, upon parliament’s approval of the 2013 budget, it was agreed that the state could not take out loans with interest rates that exceed seven percent.

The President’s Office Bank of Ceylon loan request has been forwarded to parliament’s finance committee.

Foreign loans for “fiscal problems”

In 2012, President Waheed reportedly said he would not resort to borrowing from foreign governments in order to finance government activities.

“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn,” he was reported to have told the people of Nilandhoo Island.

However, the government has sought a number of foreign loans to supplement the state budget.

Last month, the government confirmed it was in discussions with Saudi Arabia, seeking a long-term, low interest credit facility of US$300 million to help overcome “fiscal problems”.

President’s Office Spokesperson Masood Imad confirmed President Waheed had held discussions with senior Saudi Arabian dignitaries including Crown Prince Salman bin Abdulaziz Al Saud over the proposed credit facility, during his recent visit to the country.

“The president has initiated the talks so it is just a matter of working out the details now,” Masood said, explaining that the funds would be used for “budget support” and development projects.

In September 2012, President Waheed told Reuters that China will grant the Maldives US$500 million (MVR7.7billion) in loans during his state visit to the country.

The loans, equal to nearly one quarter of the Maldives’ GDP, would include $150 million (MVR2.3billion) for housing and infrastructure, with another $350million (MVR5.4billion) from the Export-Import Bank of China, reported Reuters.

China’s aid was hoped to provide an immediate salve to the government’s financial ailments, which at the time included a MVR 9.1 billion ($590million) budget deficit.

Additionally, the government was seeking a US$25 million state loan from India required to support the state budget for the remainder of 2012. The loan was delayed after the Maldives’ government failed to submit the requested paperwork, a diplomatic source from the Indian High Commission in the Maldives previously revealed.

The US$25 million loan was agreed as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

It is not clear whether the foreign loans from India and China have been received, or whether parliament has approved the state obtaining loans from Saudi Arabia or Sri Lanka’s Bank of Ceylon.

Finance Minister Abdulla Jihad as well as Deputy Speaker, Parliamentary Financial Committee Head, and People’s Alliance (PA) MP Ahmed Nazim were not responding to calls at time of press.

Failure to fill budgetary gaps

Finance Minister Abdulla Jihad claimed back in late December 2012 that the MVR 15.3 billion (US$992 million) state budget approved by parliament might not last until the end of 2013 – requiring supplementary finance for the state.

In April 2013, Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditures.

Jihad warned that government offices and independent institutions might be unable to pay salaries orelectricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).

Earlier in April, Jihad also announced that the government had decided to delay all new development projects that were to be financed out of the state budget due to shortfalls in revenue.

The decision to suspend new projects was revealed after Housing Minister Dr Mohamed Muiz told local media at the time that he had been instructed not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

“Reckless financial management”: MDP

In July, Maldivian Democratic Party (MDP) MP and Spokesperson Hamid Abdul Ghafoor said that the heavily partisan parliament now effectively controlled state finances as a result of former opposition politicians – now part of President Waheed’s government – imposing tighter spending restrictions on former President Mohamed Nasheed’s administration.

Ghafoor argued that with the MDP failing to recognise the legitimacy of the present government due to the controversial transfer of power last February, he did not believe there would be support for approving the credit agreement with Saudi Arabia due to the government’s existing extravagant borrowing levels.

The party accused the current government of reckless financial management, pointing to a potential US$1.4 billion compensation bill facing the state for deciding last year to abruptly terminate a US$511 million airport development contract agreed with infrastructure group GMR.

The compensation claim amounts to four times that of the Maldives’ current state reserves should it be awarded by a Singapore court overhearing arbitration hearings between GMR and the government.

“Since we do not see this government as legitimate, we do not see why we should support them,” he said. “They have put us into debt with their handling of the airport development and another bill for a border control system.”

Earlier in July, Malaysian security firm Nexbis invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control system technology in the country, in line with a concession agreement signed in 2010.

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Diesel fuel rationed after STO shipment delayed

The State Trading Organisation (STO) has controlled the sale of diesel fuel in the Maldives due to a shipment delay.

The delay of diesel shipments occurs “sometimes during the year” when ships carrying diesel from Dubai are “held up” in port, STO Managing Director Shahid Ali told local media.

While diesel will be made available to the State Electric Company (STELCO), resorts and general customers, new orders for diesel are being controlled by STO, according to Ali.

“This is a common problem. But there is enough oil in stock for STELCO and all the resorts, who buy oil on a regular basis. It is only the sale of oil to other groups that has been controlled,” said Ali.

“We might not be able to meet the demand of a sudden order. But regular customers will have continued supply,” he added.

The diesel shipment will arrive on Wednesday (August 14) and STO expects the control of diesel to be lifted by Thursday, according to Ali. No restrictions on petrol supplies have been enacted.

Meanwhile, Fuel Supply Maldives has also restricted the sale of diesel, following STO’s control of diesel supplies, Managing Director of Fuel Supply Maldives Adam Saleem told local media.

“We have rationed the sale of diesel to resorts. We have faced this problem before as well, but this time the delay has been prolonged,” said Saleem.

Fisherman are also facing problems due to the limited diesel sales, while resorts are complaining about running out of diesel supplies, according to local media.

Diesel fuel is the primary source of power generation in the Maldives, with most islands having separate power house facilities. Marine diesel is also used to fuel the country’s fishing and transport fleet, accounting for roughly 80 percent of the country’s consumption.

The near total dependence saw the Maldives ranked dead last in report published by the UNDP in 2007 on the vulnerability of developing countries to fluctuating oil prices, a fair stretch behind Vanuatu, effectively placing the country among the world’s most oil-addicted nations.

“Island countries in general are extremely vulnerable to increased oil prices. They comprise distant and small markets and have to bear the burden of higher shipping costs, while electrical power generation is largely fueled by diesel,” the report noted.

The Maldives dependency on oil was discussed in October 2012 by President Mohamed Waheed at the World Energy Forum in Dubai.

“A development path primarily based on expensive diesel generated electricity is unsustainable in any country, let alone a small country like Maldives,” said Waheed at the forum’s opening ceremony.

“Today, we spend the equivalent of 20 percent of our GDP on diesel for electricity and transportation. We have already reached the point where the current expenditure on oil has become an obstacle to economic growth and development,” he continued.

Waheed explained that the current price of 35-70 US cents per KW hour meant that the government was being forced to provide “heavy subsidies” to consumers, giving little option but to move towards a low carbon alternative.

State Trading Organisation (STO) Managing Director Shahid Ali was not responding to calls at time of press.

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Political bias limiting right to information: panel

The biased editorial practices of media outlets owned by politicians is one of the major impediments preventing the right to information from being upheld in the Maldives, journalists and civil society actors highlighted during discussion panels organised by the US Embassy this week.

Maldivian journalists and NGO leaders met with representatives from the US Embassy, the UN, as well as a US attorney representing the American Society of News Editors, Kevin Goldberg, to discuss the current status and future efforts needed to protect this human right in the Maldives.

The state is the guardian of information and the public have a right to access that information, according to the forum.

This is essential for not only holding the government accountable to the public – so residents of the Maldives can understand what the government is doing for the people – but also for instilling public trust in government institutions.

Any type of information, including documents, electronic records, audio, video, etc., produced, held or maintained by a state institution should be easily accessible. Uninhibited access to events held in the public domain, such as protests, are also protected, the forum was informed.

Journalists and NGO representatives alike noted the lack of cooperation from government institutions as well as the shortcomings of media outlets in disseminating balanced information.

The media discussion panel held Monday (August 12) was nonetheless poorly attended, with three journalists from Sun Online, one Maldives Media Council (MMC) official, and one Minivan News representative participating.

While two Maldives National Broadcasting Corporation (MNBC), also known as Television Maldives (TVM), reporters were present during part of Attorney Kevin Goldberg’s opening remarks, they left prior to the group discussion taking place. No representatives from the Maldives Broadcasting Commission (MBC), Raajje TV, Villa TV (VTV), DhiTV, Haveeru News, Channel News Maldives (CNM), Miadhu News, or Minivan Radio attended the event.

Although the panel was small, discussion was lively, with everyone in attendance concerned about editorial policies that catered to the government or a specific political party, which they said had staunched the flow of information reaching the Maldivian public.

Unbalanced reporting in favor of the state during the February 2012 controversial transfer of power that followed former President Mohamed Nasheed’s resignation, as well as government authorities cutting Maldivian Democratic Party (MDP) aligned-Raajje TV’s feed, were highlighted as concerns.

In addition to the need for a culture of balanced, ethical reporting, journalists highlighted the difficulty in obtaining information from various government representatives and institutions.

Goldberg noted that “information delayed is information denied”, and that procedural mechanisms should be in place to allow the public, including journalists, easy access information. The state should “proactively disclose” information of public interest, individuals “shouldn’t have to ask for it”, he said, explaining that readily available information was as much a means for public officials to protect themselves from the media as it was for the media in conducting investigative journalism.

Goldberg, as well as the Human Rights Advisor to the UN Resident Coordinator’s Office, Safir Syed, stated that MBC’s requirement that journalists be licensed to enter a protest was a human rights violation.

Goldberg emphasised that it takes time to build enough collective momentum to effectively pressure a government to uphold the right to information, and that collaboration between media outlets and civil society was essential to do so.

NGO representatives echoed the concerns noted by journalists during the discussion panel held Tuesday (August 13) and emphasised that unethical reporting and the media’s lack of cooperation with NGOs had limited civil society’s trust of local media outlets.

The inability to appeal to the judiciary to obtaining access to public information was also highlighted as a problem.

Transparency Maldives Project Director Aiman Rasheed explained to Minivan News that while Article 19 of the Maldivian Constitution guarantees the right to information, current practice was limited to the executive. He added that the right to information regime needs to be spread across all state institutions, including the judiciary, parliament, independent commissions and state companies.

Furthermore, the Maldives is a signatory to the International Convention on Civil and Political Rights (ICCPR), which also protects this human right.

“The right to information is important for citizens to make informed choices, participate in the democratic process, and hold the government accountable,” said Rasheed. “Freedom of information is a key prerequisite for democracy.”

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AG accuses Civil Court of negligence as City Council proceeds with US$30 million development of West Harbour

The Attorney General has filed a complaint at the Supreme Court accusing the Civil Court of negligence in holding a hearing of a case filed by the state, seeking to prevent Male City Council from outsourcing the development and operation of the West Harbour Area.

Last Sunday Male City Council announced its intention to hand over the development and operation of the West Harbour Area – locally known as the ‘T-Jetty Area’ – to a local company called West Gate Assets Private Limited for a lease period of 25 years.

The project, worth US$30 million, once completed will include coffee shops, cafes, petrol sheds, shopping malls and spacious parking zones intended to resolve severe congestion in Male’ City.

Meanwhile, in its complaint filed at the Supreme Court, the Attorney General’s office claimed the Civil Court’s failure to proceed with the case meant that the government could take no action against the project.

“If that agreement proceeds as it is now, [the Attorney General’s Office] believes that will be carried out unlawfully and this office will continue to take necessary actions against the project,” read a statement from the AG’s office.

The AG further claimed that last December, when the city council announced opened bidding for the project, a case was filed at the Civil Court to invalidate the process through an injunction to stop the bidding process.

However the Attorney General’s office said the Civil Court had failed to hold any hearings into the case since May.

The statement claimed excuses for hearings being delayed included the city council’s lawyer calling in sick, the court being unable to deliver court chits and the judge being on leave.

The project

In a press conference on Sunday, West Gate’s Consultant Ismail Firag told the press that the company intended to develop the area as a phase by phase project with development of the first phase to commence on September 1.

The City Council claimed that the lease agreement had been signed by the City Council and West Gate six months ago, after the project received approval from both the Anti Corruption Commission (ACC) and the Housing Ministry.

Male City Council Member Ibrahim Sujau at the press conference said the council would try its best to make arrangements to ensure that the project was completed smoothly without disruptions.

He added that the decision to complete the project in several phases was made to ensure its smooth completion.

The councillor claimed that area was leased to West Gate for a sum of MVR 400,000 (US$ 25,940.34), approximately MVR 320,000 (US$ 20,752.27) more than the current MVR 80,000 (US$ 5,188.07) a month generated in income generated from the area by the City Council.

Opposition

The opposition Maldivian Democratic Party (MDP)-dominated Male City Council has come under heavy fire from the government over the project as both the Housing Ministry and the Attorney General have voiced against outsourcing of the harbour development.

Shortly following the announcement, Housing Minister Mohamed Muizz dismissed the claim made by the City Council that his ministry had given approval to the project.

Speaking to local newspaper Haveeru, the Minister claimed the city council had not shared anything with the ministry before handing the project over to West Gate.

Muizz further contested that city council could not take such major decisions without consulting the ministry as the West Harbour area is considered an important economic zone in Male’ City.

“It is a very important strategic location in Male’. On the other hand, development of that area is a massive project. They can’t hand over the development of the area without obtaining permission from the ministry. We even do not know how they plan to develop the area. It is an outright lie that we had given them the approval,” he said.

Housing Minister claimed the ministry had previously made a master-plan to develop the area and said that he did not believe the city council could hand the project to West Gate under a new master-plan.

Previously, the housing ministry’s bid to stop the project through the Anti Corruption Commission failed after the commission concluded that there was no corruption involved during the bidding process.

But Muizz claimed that he was determined to stop the project.

“We will look into ways to stop the project. But we have not yet decided what will be our actions. Previously, similar attempts had been made to stop other such projects. But the current legal framework itself has difficulties for such actions,” he said.

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