Category: Business & Tourism

Maldives business news

JP MP Jabir raises Maldives investment fears over lack of resolution in GMR dispute

Jumhoree Party (JP) Deputy Leader Abdulla Jabir has criticised attempts to “politicise” the dispute between the government and India-based GMR over an agreement to develop Ibrahim Nasir International Airport (INIA) – fearing a negative impact on foreign investment.

The claims were made as the government-aligned Adhaalath Party (AP), which promotes religiously conservative values in the country, has continued to call on fellow coalition partners including the JP to take part in a series of “events” in the capital to protest against GMR’s development of the airport.

Speaking to Minivan News, Jabir, who is also a serving MP, highlighted the importance of maintaining an “investor friendly” atmosphere in the Maldives despite calls by some of the JP’s government coalition partners to re-nationalise the airport.

The MP said he instead advocated for sitting down and trying to find a compromise between the government and GMR, which is contracted to develop and run the airport for 25 years.

The dispute has centred, in part, over concerns like a disputed US$25 Airport Development Charge (ADC) that was to be levied on each passenger travelling through the site. GMR has maintained the the charge was contractually agreed, but later offered to exclude Maldivian nationals from paying it after the matter was contested in the country’s courts.

With the dispute unresolved, Jabir said he had sent a request to the Public Accounts Committee of the People’s Majlis for a review of the contract signed between GMR and the government of former President Mohamed Nasheed to “better understand” the agreement.

Several former opposition parties now serving in the government of President Dr Mohamed Waheed Hassan have continued to raise allegations of possible corruption behind GMR’s bid to develop INIA – allegations refuted by the company and the former government.

Jabir maintained that discussion and analysis, rather than politicised rhetoric in the media and at public events, would be required to move forward with the issue in a manner that did not damage future investment opportunities.

“We need an investor friendly environment here. Politicians should be here to resolve issues not complicate them further,” he said. “Any allegations of misconduct should be investigated, but we should be able to sit down and discuss a resolution. Yet many people do not know about or even understand the deal that has been signed.”

Jabir claimed that the GMR contract should therefore be viewed as a business issue rather than a political problem, something that he claimed would require greater parliamentary understanding of the agreement signed by the former government.

Under the terms of the agreement – a US$511 million deal that represents the largest ever case of foreign investment in the Maldives – GMR agreed to a 25 year concession agreement to develop and manage the site, as well as to overhaul the existing terminal by the end of this year.

The document was overseen by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private sector projects in developing countries.

However, the Maldives government earlier this month accused the IFC of negligence during the bidding process for INIA – allegations there were rejected by the organisation.

Both the government and GMR are presently involved in an arbitration case in Singapore over the airport development.

Coalition response

The coalition parties making up the government of President Dr Mohamed Waheed Hassan have at times appeared divided over how to proceed in regards to GMR the contract.  Some parties like the Adhaalath Party have advocated to gather in Male’ as part of a rally next month calling for the airport to be “returned” to the Maldivian people.

Speaking to local media earlier this month, Adhaalath Party President Sheikh Imran Abdulla said that a ‘mass national gathering’ would be held at Male’s artificial beach area on November 3 at 4:00pm to coincide with Victory Day.  Victory Day is held in remembrance of a failed coup attempt that was thwarted in 1988.

Sheikh Imran told the Sun Online news service that the gathering was devised as part of ongoing attempts to try and “reclaim” the airport from GMR.  Imran was not responding to calls from Minivans News at the time of press.

Minivan News was also awaiting a response from Abdulla Ameen, Secretary General of the government-aligned Dhivehi Qaumee Party (DQP) at the time of press concerning its response to the proposed gathering.  The DQP had previously published a 24-page book claiming that the former government’s lease of INIA to GMR was a threat to local industry that would serve to “enslave the nation and its economy”.

Meanwhile, the Dhivehi Rayyithunge Party (DRP) claimed last month that while it held issues with the overall benefit to the Maldives from the GMR deal, “due process” had to be followed through proper legal channels in order to establish if any wrong doing had occurred with the airport contract.

Parliament review

JP Deputy Leader Jabir himself this week criticised certain high-profile political figures in the country over their response to the GMR contract.  He accused some of these figures of not “knowing what they are talking about” in regards to the deal, highlighting the need for a review of the agreement within the Public Accounts Committee.

Jabir was particularly critical of the Adhaalath Party’s response towards the GMR issue, which he claimed had complicated finding a resolution.

“Sometimes they are religious experts, sometimes they are financial experts. But everyone loves Islam here. Right now, foreign investors are finding it difficult to understand the climate here. This is not a perfect time for this issue to be happening with GMR,” he said. “I think these protests [against GMR] are unrealistic.”

Jabir claimed that from his experience as both a parliamentarian and business owner in the country, there was “no such thing” as a deal that cannot be renegotiated.

“However, if there is no talking then the country is only losing money whilst people take to the streets,” he added.

Earlier this month, INIA CEO Andrew Harrison told Indian media that the company had received no official word from the Maldivian government concerning a resolution to the dispute.

Yet despite MP Jabir’s concerns about the potential impacts the ongoing dispute over the airport development might have on future foreign investment, one national trade body recently played down fears that GMR’s case was proving to be economically detrimental to the Maldives.

The Maldives National Chamber of Commerce and Industries (MNCCI) claimed last month that legal wrangling between the government and GMR over the multi-million dollar airport development was not adversely harming confidence in the country’s “challenging” investment climate.

MNCCI Vice President Ishmael Asif contended that ongoing legal disputes linked to both the GMR agreement and another high-profile contract to manage a border control system with Malaysia-based Nexbis were not among concerns foreign investors had raised with the chamber.

“GMR has nothing to do with the investment climate here, at the end of the day it is a personal concern for the company and more a matter of local politics,” he claimed.

Likes(0)Dislikes(0)

“Challenges” anticipated as Maldives adopts mandatory motor cover

Vehicle owners in the Maldives are be required to have third party motor insurance under new regulations coming into force today or otherwise face paying a potentially indefinite number of fines from police, transport authorities have warned.

Assessing the new law, which will have direct impacts on police and insurance providers in the country, the head of the Transport Authority of Maldives said that a “wait and see” approach would be taken before judging the efficiency of the new regulations and how they are being undertaken.  The authority said it nonetheless held reservations about the actual insurance regulation as well as the capacity of private and state institutions to ensure motorists were correctly registered.

However, the Maldives Police Service has said it does not expect the motor insurance regulations to severely impact officers in carrying out their duties due to an potential increase in workload.

Several key insurers in the country have meanwhile announced measures to try and keep up with demand.  These measures have included extending office hours across the last week and launching an online purchasing of insurance coverage.

The introduction of the new law requiring all owners of two and four wheel motor vehicles on the country’s inhabited islands to have third-party insurance was ratified under the previous government in the form of an amendment to the Land Transport Act.

The insurance bill was required to be brought into force three years from the start of the Act, together with regulations stating that the mechanisms for investigation of accidents, identifying the cost of damage and claim for damage should be made public.

Speaking to Minivan News, Transport Authority Chair Abdul Rasheed Nafiz said that concerns remained over the original legislation amendments, as well as the capacity of private companies to ensure members of the public would be correctly registered in time.

“My question is whether [insurance companies] can finish registering people on time,” he said. “There was a little concern about this, but I have spoken with the companies [this week] and they have said that staff had been sent out to islands to assist with registering. Insurance groups have been extending their office hours to meet demand.”

Nafiz said that in order to speed up the registration process for the country’s motorists, customers would be initially able to obtain coverage for a vehicle providing they present valid documentation proving their ownership. He added that customers would then be able to finalise registration at a later date with insurers as the law comes into place today.

Nafiz also pointed to what he believed were “problems” within the regulation calling for mandatory insurance that needed to be addressed as a result of the law coming into effect without further study.

“The law itself has some problems; any driver found by police not to be insured will have to pay a MVR750 fine. However, there is no limit on the number of times police can charge a person without insurance,” he said.  “In one hour even there can be several violations against the same vehicle. This puts drivers at the mercy of police.”

Nafiz added that insured motorists should nonetheless carry official proof of their insurance policy.

Transport authorities claimed that the new regulations also created challenges for police themselves, with any accidents having to be reported to officers within seven days of occurring.

“Traffic police will then be required to investigate the case and produce an accident report,” he said, adding that a copy of the report would then be sent to the insurer. “We will wait and see how efficient this will be. Police have agreed they will go to accidents to investigate.”

Nafiz also criticised the previous administration for some of the challenges presently being experienced over implementing the mandatory insurance, claiming the former government has undertaken “no work” on the matter after amending the Land Transport Act.

With the regulations coming into place today, Police Spokesperson Hassa Haneef said that officers were already performing random checks on vehicles across the country to check drivers had the correct registration and documents.

“We will be performing checks on a daily basis to ensure vehicle are registered according to the proper rules and regulations,” he said. “This won’t be much different to an officer’s existing work.”

Nafiz said that transport authorities had met with three to four insurers n the country in order to outline a standardised annual cost for vehicle coverage order with the implementation of a mandatory motor insurance policy.

“We managed to get agreement with every company to charge the same amounts in terms of maximum costs. They can charge lower if they like, but the companies have agreed to a maximum amount,” he said. “We have been using TV and radio to try and notify the public about this change.”

Nafiz claimed that under the new insurance scheme, the most that can be claimed was a total of MVR 100,00(US$6500)  an amount designed to cover charges related to injury or vehicular damage. Under this programme, up to 60 per cent of this total amount could be used to cover expenses linked to injuries sustained during an accident.

According to Nafiz, another challenge had been faced in terms of agreeing the basic levels of coverage afforded by the standard vehicle insurance policy – discussions that he claimed had become “heated” at times.

It was proposed that the insurance would cover damages of over MVR 2,500 (US$160). However, from research we conducted, most of the damage caused in vehicle accidents would be to plastic covers on a bike or a bulb on a headlight. These were the type of things we found garages were dealing with,” he said. “So if owners are having to pay MVR 500 (US$32) in costs to repair damage, what is the benefit they are getting from insurance?”

Nafiz contended that such a system would serve only to encourage garages inflating charges to MVR2,500 per bill. In response, he claimed insurers agreed on offering a second option, where a package would be offered that covered damages to vehicles under MVR 2,500. However, such a package would require a customer to pay higher premiums on their policy in return.

Last minute demand

Whilst the new regulations may have led to an influx of custom for some companies, several insurers speaking to Minivan News have said that they face challenges themselves after being increasingly inundated with “last-minute” demand from motorists.

Allied Insurance Company of the Maldives, one of a number of groups providing the third-party vehicle coverage in the country, said that it had seen a large number of customers continuing to request coverage today even after the regulations came into force.

Ahmed Riyazi, Information Systems Manager for the company said that over the course of the last week, demand for vehicle insurance rose from 150 customers a day to 1,000 clients a day.

As well as a surge in custom, the company claimed that it faced other challenges in providing services to customers on the country’s outer atolls.

“Geography has certainly been challenge we have faced [with providing motor insurance], but we are also seeing a lot of late demand from customers,” he said.

In an attempt to overcome the problem, Allied today announced the launch of an online payment service from its website that allows customers to purchase both motor and travel insurance coverage instantly.

Amidst strong demand for vehicle insurance, insurer Amana Takaful has said it has also experienced people “rushing to get a policy at the last minute” as the new regulations were launched.

Imran Ramzan, Assistant Manager of Marketing for Amana Takaful, said the company had as of Sunday (October 7) prolonged its open hours till 10:00pm to try and meet customer demand.

“Even now, demand remains very high as it seems most people have waited until the last minute to arrange insurance for their vehicles,” he said. “This strong amount of last minute demand has created a bottleneck, but we are working with our customers to ensure they are all registered correctly and on time,” he said.

Likes(0)Dislikes(0)

Politicians and businessmen funding gangs to attack opponents: Asia Foundation

Politicians and businessmen are paying gangs in the Maldives tens of thousands of rufiya to assault rivals, damage property, and in some cases have them killed, according to a report into the country’s gang culture by the Asia Foundation.

“Political and business elites exploit gangs to carry out a range of illegal activities that serve their political or business interests in exchange for financing the gangs,” stated the report, which collected data through 20 focus groups and 24 in-depth interviews with gang members.

“This has worrying implications for support for democracy among the young generation as they witness first hand corruption on the part of their political representatives,” the report states.

The research was conducted primarily in the capital Male’, which it describes as having 20-30 gangs, ranging in size from 50-400 members.

Gangs are described as including mainly males aged under-25 years. Of those involved in the focus groups, 63 percent were unemployed, and 54 percent admitted to being drug users – both prominent issues highlighted in the report.

Poisoned politics

The report cited anecdotal evidence suggesting that the root of gangs in the Maldives was linked to the introduction of heroin to the country in the early 90s.

“Gang members report that in the early 1990s, foreigners (purportedly Indians) gave away free packets of heroin (locally called brown sugar) that contained directions for use,” read the report.

“Subsequently drug users, through involvement in gangs, supported their drug habits by the sale of drugs and other criminal activities,” it continued.

The report also draws strong links between the introduction of political parties during the last decade’s democratic reforms, and the escalation of gang activity.

“Democracy is not working… people do not know what democracy is… even politicians do not know what it really is… there is too much freedom… people do not know how to use this freedom,” the researchers were told by one gang member.

Politicians are described as being involved in symbiotic relationships with gangs, who depend on the gangs to suppress opponents and carry out tasks to help maintain their popularity or to divert media attention from political issues.

“Politicians have asked us to cut the TVM cable for MVR 25,000 (US$1620), to light up a bus for MVR 10,000 (US$650). Also in the recent political riots we were involved in things like burning the garbage collection area,” said one gang member.

“We were given some amount of money, two of us and the 10 people who accompanied us were paid some amount, we had to set fire and run from the spot and be seen in another area. We got paid to do this by a political group. Sometimes in return for the work we do, we also get to party in their safari boats with girls and alcohol,” they added.

In other cases, gang members were paid MVR 20,000 (US$1230) to destroy shop windows.

Interviewees also stated that being offered immunity from prosecution was normally part of this deal.

Leaders, who deal directly with the politicians, were reported as earning up to MVR 1 million (US$65,000) a month via such activities.

One member even described instances where murder contracts were handed out.

“We may be given a file with all the information about the person and be told and told we may be paid in millions to carry out the killing,” explained one member.

Stabbings are commonplace and knives have become increasingly prevalent. Gun crime remains negligible, however one of the researchers was told by a gang member: “It is my fantasy to possess a gun, I had once saw a small pistol, I had it under my bike seat, it was planted but I returned it (I knew who it belonged to), that day when I saw the pistol I was so scared, but now I want a gun and I frequently fantasise of going on a killing spree, I have in my mind all those whom I will kill.”

Based on the interviews conducted, the report said that there was no evidence linking gangs to religious groups. Instead, gang members were contemptuous of the country’s religious leaders.

“We have lost respect for them (religious leaders)… their thinking is obsolete… some are even seen in videos indulging in activities prohibited in religion and the next day they are preaching… they do not act what they preach,” said one gang member.

Vicious cycle

A lack of jobs was cited as one of the major reasons for young people to join gangs.

The report highlighted problems with the legal process, which produces a criminal record – which cannot be cleared for five years –even for minor offences.

“Due to police record, we can’t get a government job,” said one interviewee. “When government does this, the private sector usually does the same.”

“Hence it’s hard to get a job if a person has a police record…so join a gang to earn money,” they said.

Whilst the minimum wage in the Maldives is MVR 2,600 (US$170), the report states that a gang member can receive up seven times this amount for illegal activities such as breaking a shop window.

Young people who opt to leave school at 16 are also described as particularly vulnerable to gang association as they are not seriously considered for employment until they turn 18.

The report did find some evidence that some gangs do attempt to find legitimate work for their members.

“We try and help the younger generation… Show them the right path… we are very proud of this… some members have respectable posts in government and some run their own business,” one gang member said.

This strong group ethic was mentioned in the report of one of the primary reason for gang membership, with the group providing a surrogate for social welfare and dysfunctional families.

Gangs were also described as providing a strong sense of identity for its members. This status is also closely linked to violence, which large gangs can then provide members with protection from.

In conclusion, the report recommended that changes be made to the way minor offences are recorded as criminal complaints.

It also argued that better re-integration programs for convicts, as well as more drug rehabilitation and vocational training programs, might help alleviate the country’s gang problem.

The report also said that greater empowerment for young people would help to generate alternative opportunities for work and that better family counselling might help potential gang members cope with death and divorce.

Likes(0)Dislikes(0)

India concerned over Maldives’ political instability, investment climate

The Indian government has expressed concern over continuing political instability in the Maldives, following the murder of Progressive Party of the Maldives (PPM) MP Afrasheem Ali this week.

In a statement on Thursday, India’s External Affairs Ministry said it had “consistently emphasised that peace and stability are necessary prerequisites to the firm implantation of democracy, as well as for the economic growth and prosperity of the people of Maldives.”

“We call upon all parties in Maldives to continue to work towards facilitating an early and commonly acceptable internal solution to the political impasse in the country. In this context, India urges the government of Maldives and all political parties to adhere strictly to democratic principles and the rule of law thus paving the way for the holding of free, fair and credible elections. Violence should find no place in democracies,” the Ministry stated.

India also called on the Maldivian government “to ensure a propitious climate for foreign investments, which have a direct bearing on the economic growth and development of Maldives.”

The latter remark comes after parties in the ruling coalition last month stepped up rhetoric calling for nationalisation of Ibrahim Nasir International Airport (INIA), currently being developed and managed by Indian firm GMR in the Maldives’ single largest foreign investment.

Following the controversial transfer of power on February 7, President Dr Mohamed Waheed Hassan’s government has swung between issuing reassurances within diplomatic circles that Indian investments in the country would be protected, while locally stepping up nationalisation rhetoric.

Last week, GMR’s Airports CFO Sidharth Kapur told Indian television channel CNBC that the dispute could affect the country’s investment climate.

“While we have invested both debt and equity into this project, these kind of problems naturally affect the investment climate of any region,” said Kapur.

Discussing the GMR case last week, the Maldives National Chamber of Commerce and Industries (MNCCI) assured Minivan News that investor confidence was not being harmed, though the body did describe the investment climate as “challenging”.

India meanwhile recently granted the Maldives a further US$25 million as part of a US$100 million standby credit facility agreed during last November’s official visit from Prime Minister Manmoham Singh.

The deal represents the third instalment of the credit facility, with the previous two instalments having amounted to US$50 million. The previous tranche of US$30 million was released following President Waheed’s first official visit to India in May.

The assistance comes at a time the Maldives is facing a crippling financial position.

Minister of Finance Abdulla Jihad told parliament’s Finance Committee that this year’s budget deficit is set to be double the original estimate of MVR 3 billion (US$195million).

Jihad told Parliament’s Finance Committee that state spending this year, MVR 9 billion (US$590 million), had outstripped earnings by 28 percent.

Likes(0)Dislikes(0)

“Fragile democracy under threat”: Richard Branson, Ed Norton among signatories for fresh elections

Business tycoon Richard Branson and ‘Fight Club’ actor Ed Norton are among dozens of international celebrities and activists who have signed a letter calling for the Maldivian government to halt harassment of the opposition and “hold democratic elections at the earliest opportunity.”

The letter, published in the UK’s Guardian newspaper, expresses concern over former President Mohamed Nasheed’s “island arrest”.

“The ban was then followed by a series of orders to appear in court this week on spurious civil and criminal charges – a strategy of legal harassment pursued by the illegitimate regime of Mohamed Waheed. Its sole purpose is to sideline Nasheed from active politics and further stamp out any political opposition,” the letter stated.

President’s Office Spokesperson Masood Imad told Radio Australia on Tuesday that the government on assumption of office “made it clear we would in no way interfere with the process of the judiciary. The judge summoned Mr Nasheed but he absconded. I believe he will be summoned again and if he does not appear in court, he will issue an order for his arrest.”

The letter further stated that “the outlook for democracy in the Maldives is deteriorating. The circumstances surrounding Nasheed’s removal from power earlier this year remain a matter of dispute, but other matters are beyond doubt.”

Specifically, it noted that “no date has been set for free and fair elections by this unelected regime, which has links to former dictator Abdul Gayoom,” and that “nearly 2,000 peaceful demonstrators calling for elections have been detained by security forces, many beaten and hospitalised.”

“Sadly, much of this remains largely unreported by the world’s media. A young and fragile democracy is under threat once more and we therefore call upon [President] Mohamed Waheed to set a firm date for free and fair elections immediately, to end the culture of systematic police brutality and to release all political detainees including opposition leader Mohamed Nasheed.”

As well as Branson and Norton, signatories included Radiohead guitarist Thom Yorke, actress Darryl Hannah, 350.org founder Bill McKibben, the Eden Project’s Tim Smit, and philosopher and ethicist Peter Singer.

Norton, Branson and Hannah were fixtures at last year’s Slow Life Symposium held at the upmarket Soneva Fushi resort in the Maldives.

Branson first waded into Maldivian politics on his blog on February 24, calling on President Waheed to “do the right thing” and hold free and fair elections before the end of the year.

It was, Branson wrote to Dr Waheed, “completely astounding that you have been part of an overthrow of a democratically elected government that has effectively let the old regime back into power.”

“Knowing you, I would assume that you were given no choice and that it was through threats that you have ended up in this position,” Branson said. “I do very much hope that was the case rather than you doing it of your own free will.”

Days later, Branson wrote another entry, saying that he had spoken on the phone to Dr Waheed, who told him he had appointed “a respected person” to examine the truth of what caused President Nasheed to “resign”.

“He says that he didn’t know who issued an arrest warrant for President Nasheed after he left office but that it had been rescinded within 48 hours. He is determined to be an honest broker, to be seen to be one, and to get everyone’s confidence. He said that he offered to bring in people from President Nasheed’s party but they refused to join.”

A few days later, Branson wrote a third post, resuming his first call for early elections “as soon as feasibly possible”.

The Soneva Group meanwhile found itself embroiled in local politics in August, composing a statement in response to allegations published in the UK media that the company’s head, Sonu Shivdasani, had engaged a PR firm to “spruce up” the image of Dr Mohamed Waheed’s government.

The article in Private Eye magazine contended that post February 7, an “unlikely alliance” had emerged between certain resorts – desperate to stabilise the sudden political instability for the sake of their bottom lines – and the new government, a loose alliance of ambitious political elements who came to power on a platform of Islamic conservatism.

“The reality is that the Maldives – already favoured by footballers, Russian gangsters and off-duty Israeli arms dealers – are an even harder sell since the coup has given us an unlikely alliance between hoteliers promoting bikini-clad, cocktail-fuelled luxury and a government that includes two imams, wants to bring back the death penalty and has done nothing about the destruction by supporters of the coup of the national museum’s entire pre-Islamic collection,” the article stated.

In a counter statement from the group, obtained by Minivan News, the company sought to clarify the “facts” of the case.

“Sonu Shivdasani does not have a political relationship with President Mohamed Waheed, their interaction revolves specifically around environmental and ecological issues,” the Soneva statement read.

A source within the Soneva Group described the situation as “a bloody mess”.

Shivdasani “completely fell for Waheed’s line that Nasheed didn’t resign under duress” and had – unsuccessfully – asked a number of PR agencies to set up interviews for the new President, Minivan News was informed.

The source surmised that Shivdasani had “innocently, stupidly, somehow believed Waheed”, and “gone out of his way to help [the new President].”

Soneva’s statement meanwhile disputed the resort’s motivation to support the new government as being based on supposed plans to amend a corporate tax bill implemented by Nasheed, as, “to the best of my knowledge, there are no plans by the current President Mohamed Waheed to reduce or eliminate this tax.”

Likes(0)Dislikes(0)

Gasim receives ‘lifetime achievement’ award at Maldives Travel Awards

The Maldives’ first ever travel awards ceremony was held at Paradise Island Resort on Friday evening to mark 40 years of tourism in the country.

The event, organised by the Maldives Association of Travel Agents and Tour Operators (MATATO), was sponsored by India’s GMR, the current developers of Ibrahim Nasir International Airport (INIA) which is expected to welcome over one million visitors into the country this year.

Following the opening of the events by some of the Maldives’ top musical acts, including Unoosha, Barchi, Ritte and Mummu, 21 awards were distributed for the categories of resorts, hotels, liveaboards and aviation.

The MATATO appointed judging panel included Dr. Mahamood Shougee (Former Minister of Tourism and Civil Aviation and Former Minister of Education), Dr. Ahmed Adham Abdulla (CEO of Maldives Transport and Contracting Company), Ms. Zeenaz Hussain (Dean of Faculty of Hospitality and Tourism Studies), and Mr. Ghaly Murthala (Tourism Development Consultant for FJS Consulting Pvt Ltd).

Amongst the individual award winners on the night was Gasim Ibrahim, owner of Villa Hotels – the parent company of Paradise Island and current leader of the government aligned Jumhooree Party (JP) – who received a lifetime achievement award.

The Hulhule’ Island Hotel (HIH) also won the award for best luxury hotel whilst Paradise Island resort won the award for leading business hotel. The Villa group also picked up an award for leading domestic airport.

Mr Maleeh Jamal – formerly head of MATATO and current Deputy Tourism Minister – was also in line for a personal award, receiving an appreciation plaque alongside Abdulla Jabir – Deputy Leader of the JP – and Yoosuf Riffath, managing director of Capital Travel.

“The event was very successful, and we thank all the sponsors and MATATO for their assistance and support in making the first Maldives Travel Awards a grand success,” said Ismail Hameed, Director of Marketing for the event’s management company, High Rise.

“We also thank all the nominees and congratulate all the winners, and hope that more resorts, hotels, Liveaboards, airlines and airports will participate in next year’s awards,” he added.

Friday’s award winner Maleeh Jamal declared that the “hard days were over” for Maldives tourism, the country’s primary industry, responsible for over 70 percent of the country’s GDP.

Amidst the uncertainty since February’s power transfer, tourism authorities in the country have pursued a strategy of collaboration with the country’s private sector to try and strengthen arrival numbers to the country.

This focus included signing a US$250,000 (Rf3.8million) advertising deal to promote the country’s tourism industry on the BBC through sponsorship of its weather services.

In April, the Maldives Marketing and Public Relations Corporation (MMPRC) confirmed the appointment of New-York based public relations agency Ruder Finn to “oversee the overall media coordination and achievement of PR related solution for destination Maldives.”

Despite the scepticism of some leading branding consultants about the ease with which the Maldives can overcome the negative headlines of this year, Maleeh anticipated increased growth in the coming months.

Arrival numbers to the Maldives between January and August this year totalled 614,802 people – an increase of 2.9 percent compared to the same period during 2011.

Likes(0)Dislikes(0)

DRP favours court resolution to GMR dispute as coalition partners prepare to “take to the streets”

The Dhivehi Rayyithunge Party (DRP) will not join its fellow government coalition partners at a gathering in Male’ to oppose an airport privatisation contract with India-based infrastructure group GMR, claiming any resolution to the dispute must be made through the courts.

DRP Spokesperson Ibrahim Shareef has told Minivan News that while the party itself questioned if the GMR deal was in the best interest of the public, “due process” had to be followed through proper legal channels in order to establish if any wrong doing had occurred with the airport contract.

“Right now we do not feel that the best option is to take to the streets on this matter. We do not know what the purpose of this [coalition] gathering is, so we will not be taking part,” he said.

Shareef added that the party’s position remained that the government was bound to the agreement should it fail to prove through due process that the contract to develop and manage Ibrahim Nasir International Airport (INIA) was invalid.

The comments were made as key financial figures within the former government maintained this week that the deal was vital to not only modernise and boost efficiency at the airport, but also to address concerns over present state expenditure through a focus on privatisation.

Under the terms of the agreement – a US$511 million deal representing the largest ever case of foreign investment in the Maldives’ history – GMR agreed to a 25 year concession agreement to develop and manage the site, as well as redevelop the existing terminal by the end of this year.

The document was overseen by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private sector projects in developing countries.

However, the Maldives government earlier this month accused the IFC of negligence during the bidding process for INIA – allegations there were rejected by the organisation amidst continued calls from government-aligned parties to renationalise the airport.

Both the government and GMR are presently involved in an arbitration case in Singapore over the airport development.

Coalition gathering

With the arbitration ongoing, six government-aligned parties are set to hold a gathering from 9:00pm on Thursday night at the Artificial Beach area of Male’ calling for INIA, as the country’s main airport, to be “returned to Maldivians”.

Through a movement called “Maldivians’ airport back to Maldivians”, the coalition – excluding the DRP – told local media this week that the gathering represents the first in a series of activities aimed at regaining management of the airport.

According to local newspaper Haveeru, Sheikh Imran Abdulla of the government-aligned religious Adhaalath Party (AP) said the gathering was aimed at showing the coalition would take a “united stand” on opposing the GMR deal until the airport was “liberated”.

“Our hope is on the night the true feeling of the Maldivian people would be revealed on the airport issue,” he was quoted as saying by Haveeru.

The coalition movement is also expected to detail what it has claimed are losses sustained to the local economy from the awarding of the company to the Indian infrastructure group.

Sheik Imran was not responding to calls at the time of press. However, fellow AP member and Maldives’ Islamic Affairs Minister, Sheikh Mohamed Shaheem Ali Saeed, said he had “no idea” about any such gathering being held.

Meanwhile Dr Hassan Saeed, head of fellow coalition member the Dhivehi Qaumee Party (DQP), referred a query by Minivan News about the gathering to the party’s Secretary General, Abdulla Ameen. Ameen was not returning calls at the time of press.

Progressive Party of Maldives (PPM) Parliamentary Group Leader Abdulla Yameen meanwhile referred enquiries about the gathering to Secretary General Yumna Maumoon – daughter of former President Maumoon Abdul Gayoom. Yumna was not responding to calls at the time of press.

DRP Spokesperson Shareef claimed that even should the validity of the agreement between GMR and the former government be found to be questionable, it remained for the courts to decide on such a matter.  Shareef added that senior members of his party had been penalised for holding such views by political opponents.

“Both [DRP Leader] Ahmed Thasmeen Ali and Parliamentary Speaker Abdulla Shahid have been accused of taking bribes on this matter and trying to obstruct efforts to take the airport,” he said.

Shareef claimed the allegations had been devised by a faction formed in the DRP by members loyal to former party head and national President Gayoom, which later branched off to form the PPM party last year.

“Gayoom’s supporters had wished to take the airport back by force,” he said. “I’m not saying the deal is fair, but first we can look to renegotiate terms and get a new agreement. Also the government has the resources to investigate the deal and make the best decision on how to move forward to benefit the Maldivian people.”

Shareef added that the party had therefore decided against “taking to the streets” with other parties in President Waheed’s coalition government.

“We are not saying that the former government were not involved in something improper with the agreement,” he claimed. “But we do not see the previous government as an MDP government, or the current government as a DRP or PPM government, it is always the government of the Maldives, so if an agreement made by the government is found to be valid, than it must be honoured under the law.”

Privatisation pursuit

Speaking yesterday on private broadcaster Raaje TV, former Economic Development Minister Mahmoud Razee said the GMR deal reflected a commitment by the former government to pursue privatisation as outlined in the MDP’s manifesto.

“Firstly, if or when anything is run like a business, private people are more skilled and efficient. They are far more competent and they work for profit unlike the government,” he claimed.  “This means it requires less cost for the government, but needs more outside investment or capital. Private people are more skilled and efficient in terms of managing. The end product thus is more beneficial.”

Addressing criticisms from some local politicians that privatisation provided no benefits to the nation, Razee conceded there was an element of truth to the assumption, but stressed it did not reflect longer-term economic benefits.

“Because the investment is huge, the project is big; the first beneficiaries are always the investors. True. The benefits go to the foreigners,” he said. “In foreign countries, they make a consortium, which means the profits are being shared within multiple parties. For example, if a Turkish company is investing here, it doesn’t mean they do everything themselves. If they are developing a property, the construction, or other necessary work is done through local companies.”

Also speaking during the programme was MDP member and former Minister of Finance and Treasury Mohamed Shihab. Shihab claimed that in cases where there was limited national budgets such as in the development of a new airport terminal, then finance should be sought from outside sources.

He added that as within the case of technology and other expertise, and pointed to local resort groups such as Universal Resorts Maldives as examples in the country’s past where foreign partnerships had benefited the country’s economy.

“Resort owners do [private partnerships] because they profit from it. Let’s conduct a survey among resorts. Definitely the salaries and service charges are higher in foreign managed companies. It is a fact that, countries where foreign investment has been made are far more developed.”

Speaking earlier this year, INIA Chief Executive Officer Andrew Harrison claimed that INIA would remain a Maldivian owned enterprise that would be continuously developed by the company for the duration of the tender.

“We are just the caretakers here,” he said.  ”The airport remains and has always been owned by Maldivians.”

Harrison contended that to ensure profitability for its investment in the airport, GMR was itself committed to strengthening the wider Maldivian economy by working with local businesses, industry and contractors.

Likes(0)Dislikes(0)

MIRA accuses Tourism Ministry of not collecting resort rents

Commissioner General of Taxation at the Maldives Inland Revenue Authority (MIRA), Yazeed Mohamed, has named the Tourism Ministry as the prime culprit amongst state institutions which are failing to collect payments owed to the government.

“If rent on resorts is not paid, the Tourism Ministry must take action in accordance with the agreement. But so far no such action has been taken against anyone,” Yazeed told local newspaper Haveeru.

As MIRA was not party to the agreements made between certain government institutions and third parties, it could not itself enforce or implement payments, he explained.

“If rent is not paid we have to take it up in court. That is to obtain payments not paid for a certain period. Then it is used as an excuse. From that point on they get a free license to stay without making payments. Once a case is filed in court, it can go up to two years without a single payment,” Yazeed told Haveeru.

“Not everybody is penalised equally. There is no differentiation between the parties that pay the amount that is owed or the ones that don’t,” he added.

Despite not collecting payments such as land rents and associated fees, MIRA includes such figures on its monthly statistics.

The figures for August showed that ‘Tourism Land Rent’ collected last month was only 19 percent of the amount collected in the corresponding period last year.

Tourism land rent for the year so far is shown to be only three quarters of that collected by the same point on 2011.

The importance of this revenue stream can be seen in the share of overall revenue tourism land rent alone contributes to the authority’s figures – making up 10 percent of MIRA’s income this year.

Former Economics Minister Ahmed Inaz told Minivan News today that this issue was also a problem under the former Maldivian Democratic Party (MDP) led government.

“The system is not transparent or fair – under the Nasheed government or now,” said Inaz.

“The Judiciary and executive should penalise industries which are penalising the system. The system should be designed for all, not individuals,” he said.

Dr Mariyam Zulfa, Tourism Minister under the Nasheed administration, disputed the suggestion that any resort owners received preferential treatment during her tenure and said that non-compliance was always a problem, everywhere.

“Only about 10 percent of resort operators failed to comply. In every country there are those who do not comply with taxation legislation’s requirements – the Maldives is no different” she said.

MDP members have persistently linked powerful resort owners with what it perceived to be a coup d’etat which saw President Mohamed Nasheed leave office in February.

Shortly after the transfer of power, there was a re-interpretation of the legislation governing island lease extensions which Zulfa predicted would severely reduce government revenue.

“The Nasheed government had requested that those resorts extending to a 50 year lease pay in a lump sum,” she said at the time, “but while I was Tourism Minister, Gasim Ibrahim and Ahmed ‘Redwave’ Saleem kept pressuring me to let them pay on a yearly basis.”

“They didn’t want to give any money to the government, and soon after the government changed they got what they wanted. [The installments] will only be payable at the end of the current lease periods – it is a huge loss to the treasury,” she added.

MIRA’s figures show that revenue from lease period extension fees has been US$11million (MVR168million) so far this year, compared to US$20million (MVR273million) at the same point in 2011.

Minister of Finance and Treasury Abdulla Jihad told the Majlis’ Finance Committee earlier this week that state revenue was expected to be MVR3.1billion (US$200million) less than expenditure this year.

Neither the current Minister for Tourism – Ahmed Adheeb – nor the Deputy Tourism Minister – Mohamed Maleeh Jamal – were responding to calls at the time of press.

Likes(0)Dislikes(0)

Bank of Maldives and MTDC at risk of trading penalties over AGM delays: Stock Exchange

The Maldives Stock Exchange (MSE) has warned that the Bank of Maldives (BML) and the Maldives Tourism Development Corporation (MTDC) could both face trading restrictions over an ongoing failure to hold their respective annual general meetings (AGMs).

MSE CEO and Managing Director Hassan Manik told Minivan News that both companies had yesterday received final notices to hold their AGMs as soon as possible, after previously failing to hold the meetings no later than five months from the end of the financial year.

Both companies are now said to have agreed to announce dates within the next seven days for when the respective AGMs will be held, according to the MSE.

Manik stressed that under the MSE’s listing guidelines, failure by a company to hold an AGM within the required deadline could see it facing penalties including being suspended from trading securities.

“We have communicated to both companies to hold their AGMs as soon as possible. This is the first time we have gone public with such an announcement, but we want to make sure these companies are providing timely information,” he said. “Both have commented that they will be publicly declaring a date for their meetings within a week.”

According to Manik, while companies listed on the stock exchange regularly were unable to hold their AGMs within the required time period, he maintained that all groups listed were trying to meet the deadline outlined in its listing rules.

However, he claimed that in the case of both the MTDC and BML, it had been “a long-time” since the respective deadlines had passed, adding that both groups’ shareholders should be made aware of their operatons.

A BML spokesperson told Minivan News today that the failure to have held its AGM had been the result of delays in appointing board members  to the company.

“We have kept both the MSE and the Capital Market Development Authority (CMDA) informed about this matter, ” the spokesperson said.  “We are expecting to announce a date for our AG tomorrow.”

A spokesperson for the MTDC was not responding to calls at the time of press.

Local media has reported that the MSE has now set a deadline for both companes to hold their AGMs by October 24 or face action under its listing rules.

CMDA fines

Back in May, the MTDC, BML and the State Trading Organisation (STO) were all fined by the CMDA after they failed to publish quarterly reports and financial statements for their operations within an allotted time period.

The MTDC and the BML were each fined up to Rf30,000 for failing to publish annual financial statements as stipulated under the regulations. The statistics must be published within four months after the end of a financial year.

The companies had requested for deadline extension citing difficulties in producing the report within the given time frame, CMDA said. However the extension was not granted as the reasons provided were not acceptable, the authority claimed at the time.

Likes(0)Dislikes(0)