Indian Aviation Minister urges resolution of GMR dispute

Indian media outlets have reported that the country’s Minister for Civil Aviation Ajit Singh has asked the Maldives to consider ways to resolve ongoing disputes with Indian company GMR regarding the development of Ibrahim Nasir International Airport (INIA).

The Economic Times reported that the issue arose during a meeting with the Aviation Minister and a Maldivian delegation led by the Maldives’ Minister for Transport and Communication Dr Ahmed Shamheed.

The paper said that an official statement from the Civil Aviation Ministry had highlighted the major issues discussed:

“The contentious issues include provision of airport development charges provided for in the agreement with the GMR, but termed as unauthorised by a local court in the Maldives, and a demand for an additional runway not provided in the agreement,” the statement is reported to have said.

The development of the airport – expected by the company to total US$511m in costs – is the largest foreign investment project undertaken in the Maldives’ history and includes commitments to complete the renovation of INIA’s existing terminal this month.

The issues detailed during the meeting have been compounded in recent months by government aligned parties calling for nationalisation of the airport as well as orders to halt construction work following allegations of missing permits.

CEO of GMR Maldives operations Andrew Harrison today told Minivan News that the government had informed the company it had complied all regulations, but had not yet given it the go-ahead to resume work.

“We have not done any work since August 2,” said Harrison.

During a visit to India last month, leader of the government aligned Dhivehi Rayyithunge Party (DRP) Ahmed Thasmeen Ali warned of serious repercussion for investor confidence should the country renege on the GMR deal.

Sri Lankan media this week has also reported Business Council leader Hussain S Hashim as saying that a lack of trade dispute mechanisms in the Maldives was stifling bilateral trade.

Travel Daily India reported that additional measures to strengthen bilateral ties in the aviation sector were discussed during the meeting.

Increasing air links between Indian cities and the Maldives was a topic reportedly discussed. It was reported that Island Aviation, Spice Jet, and Mega Maldives are all planning to connect Mumbai, Delhi and Chennai with Male’.

Changes to the countries’ aviation agreement was also mentioned in Travel Daily, with the current rules only allowing flights with carrying capacities of less than 150 passengers.

“India will relook the agreement which will help in boosting tourism between the two countries,” Singh is reported to have said.

During his official visit to India in May, President Dr Mohamed Waheed Hassan spoke of his desire to bring more Indian visitors – who currently represent only 2.9 percent of the market share – to the Maldives.

“Not enough Indian tourists are coming to the Maldives and that is a matter of concern for us. I am sure it is also a matter of concern for India, particularly when you realise that there are so many Chinese tourists who are coming to the Maldives now,” Dr Waheed told India’s Business Line.

Whilst Dr Shamheed is in India, a number of his fellow cabinet ministers have accompanied President Waheed on his official state visit to China.

Yesterday, the President’s Office website reported that Waheed had met with members of the business community in Shanghai.

Waheed is reported as having said that investors were always welcome in the Maldives.

“Maldives is open for business,” Waheed told those in attendance at the opening of the China-Eurasia Expo & the 2nd China-Eurasia Economy Development and Cooperation Forum.

The highlight of Waheed’s first trip to China as President has been the finalising of a $500million (MVR7.7billion) package of aid, concessional loans, and loans for housing construction.

Likes(4)Dislikes(0)

Police follow MNDF in forming cooperative society to conduct business activities

The Maldives Police Service (MPS) on Sunday registered its first cooperative society, the Police Corporative Society (POLCO), with the Ministry of Economic Development.

Registrar of Companies Ali Sujaau told local news website Sun Online that the cooperative society had been registered with 15 shareholders. Sujau did not reveal any details of the 15 shareholders.

Speaking to local media, Police Spokesperson Sub-Inspector Hassan Haneef said that the cooperative society was formed in accordance with the police act, and that  it would to carry out business activities that would help boost the police welfare fund.

“The main purpose of [forming POLCO] is to improve the functioning of police, and for that matter, improve the welfare fund of police officers and their families and retired police officers and their families as well. Even now there is a police shop open,” Haneef said.

Commissioner of Police Abdulla Riyaz also tweeted about the formation of the corporative society, stating that it “will support to improve the welfare” of police officers and family members.

Haneef confirmed the formation of the cooperative society to Minivan News.

“We have been doing works to strengthen the police welfare mechanism, and the formation of a police corporative society was a part of the work,” he said.

Haneef further said that the current police shop that is being run will now be operated by the police cooperative society, and that it “would be researching new business ventures”.

The decision follows the Maldives National Defence Force (MNDF)’s similar move, which has begun negotiations to enter the tourism industry with the privatisation of the Thanburudhoo island as a surf resort.

Asked if the police cooperative society would follow the MNDF cooperative society in entering the tourism industry, Haneef did not rule out the possibility.

“For now, I think it is too early to say what type of business that we may be focusing on. We are now discussing on an action plan of how the cooperative society will progress and maybe it is a possibility,” Haneef said.

MNDF Welfare Company

Last month the MNDF registered the joint venture “MNDF Welfare Company” aiming to invest in various businesses, including the tourism industry, in a bid to generate revenue to fund welfare services for the armed forces.

The “MNDF Welfare Company” registered at the Economic Ministry is 10 percent government owned, and 90 percent by SIFCO, MNDF ‘s cooperative society, which provides welfare services for defence force officers and their families,  including subsidised products and loans.

Just a week after the formation of the welfare company, MNDF confirmed plans to develop a tourist resort on the island of Thanburudhoo, currently being used by the military for training and recreational purposes.

Speaking to Minivan News following the decision, Lieutenant Abdullah Ali explained that the MNDF is not going to play any direct role in the development of the resort, and that the island would be leased to a third party.

He claimed that the concept of developing the training island as a tourist resort was approved by the former government in 2010, but that work had stalled “for various reasons”.

Local surfers raised concerns over the decision on social networks, claiming that the Thamburudhoo project involved dredging and reclaiming the surrounding area of the island reef, which would destroy the popular surfing spot.

Banzai Bongo, a well-known local surfer, wrote on Face book: “This is going to affect the natural current flow of the surrounding waves such as Jailbreaks, Honkies, Sultans and Pasta. Moreover, it will destroy dive spots around this area. So the government’s best interest is to annihilate our natural resources which include world class surf sites and dive sites.”

Bongo called for surfers to “save these waves like we all stood against the state and saved the Trestles. Save it for or children, save it for the future.”

Likes(0)Dislikes(0)

Waheed to visit China to enhance trade

President Mohamed Waheed Hassan has revealed his plans to visit China on an official state visit next week, highlighting the continued significance of the nation to Maldivian interests.

“China is a fast developing nation and most products are being made there. Both small and larger countries are trying to establish trade ties with China. Hence we should also follow suit,” Waheed told local media upon his return yesterday from a state visit to Sri Lanka.

The last official state visit by a Maldivian President to China came in May 2010 when Mohamed Nasheed visited the Shanghai World Expo.

Nasheed met Chinese President Hu Jintao during his trip, Dr Waheed is himself reportedly expecting to meet Prime Minister Wen Jiabao next week.

The Foreign Ministry has said that more information about the visit would be released to the media in the coming days.

Ministry of Economic Development’s figures show that imports from China have more than doubled between 2010 and 2011, reaching US$68.9 million dollars.

Maldivian exports to China were reported to total just $26,000 last year, consisting largely of fisheries products.

Vice President of the Maldives National Chamber of Commerce and Industries (MNCCI) Ishmael Asif explained that the potential of Sino-Maldivian ties could be better realised through increased awareness of nature of the island nation.

“The Chinese are yet to understand logistics in the Maldives, including its politics,” he said. “We are trying to educate them on these things.”

He added that efforts were already being made in the field of education in order to “help us understand one another’s culture.”

In addition to trade ties, China has become increasingly important to the Maldives’ in terms of interest from tourists.

China leapfrogged the United Kingdom in 2010 to become the number one source of arrivals for the country’s travel industry.

Official figures reveal that China has provided 22.2 percent of all arrivals to the Indian Ocean nation this year – up 14.5 percent from last year.

“Most tourist arrivals to the Maldives are from China. More than 200,000 tourists come to the Maldives from China. Hence we must establish a close relationship with the country,” Waheed told reporters yesterday.

Asif added that there were great possibilities for Chinese investment in the Maldives’ tourism sector.

“For example, we have no Chinese hotel in the Maldives,” he said. “They are very interested in investment.”

The MNCCI  – whose remit is to promote trade and business in the Maldives – has had an office in Chengdu for two years. Chengdu, in Szechuan province, is the departure point for most Chinese visiting the Maldives, explained Asif.

In the wake of the rapid expansion in tourism links, closer ties have developed in the fields of aviation and diplomacy.

The rise of Mega Maldives Airlines has been particularly notable in recent years. The company, started in 2010, has more than doubled in size in the last year – operating charter flights between the Maldives and five Chinese destinations, as well as Hong Kong.

In April, the company conducted a travel road show in partnership with the Maldives Ministry of Tourism.

The company reported the cancellation of some flights after the political unrest in the Maldives in February. Although arrivals figures bounced back, the Maldives still remains on the Hong Kong Security Bureau’s travel alert system.

Disturbances in the capital at the time included the destruction of the National Museum’s pre-Islamic display. The Museum itself was a gift from China in 2010.

A Chinese embassy opened in Male’ in time for the opening of the SAARC summit last November, reciprocating the opening of a Maldivian mission in Beijing in 2007.

Indian officials were reported at the time as having concern that the move was part of China’s “string of pearls” policy which supposedly involves Chinese attempts at naval expansion into the Indian Ocean.

When asked by a reporter what the Maldives’ policy was regarding Sino-Indian competition in the region, President Waheed is said to have responded that the policy of a small nation like the Maldives ought to be to avoid too great an involvement in geopolitics.

Waheed’s first official state visit after becoming president saw him travel to India in May. The Maldives National Defence Force (MNDF) conducted joint naval operations with India in the same month.

Likes(1)Dislikes(0)

“Subterranean tunnels” and “private submarines”: Dutch Docklands details floating golf course

Proposals for the creation of a series of five man-made islands to support leisure developments such as a 19-hole golf course in the Maldives are expected to become a reality by the end of next year, project developers have told UK media.

Combining an underwater club house, subterranean tunnels and private submarines, architects have told prominent UK media that the golf course, estimated to cost £320m (Rf7.6 billion), will be “anchored” to the seabed through the use of cables or telescopic mooring to stabilise the landforms.

Once complete, golfers are expected to begin teeing off on the island’s surfaces by late 2013 -ahead of an official launch proposed for 2015.

The project was first approved back in 2010 under the government of former President Mohamed Nasheed as a means to try and diversify tourism in the country. An agreement was made with the then government to develop floating properties on five lagoons within Kaafu Atoll to include a convention centre and an 18-hole golf course as part of a joint venture agreement.

The UK-based Daily Mail newspaper has reported that European developer Dutch Docklands, which formed a joint venture with the authorities back in January 2011 to raise some US$500 million in funding, has unveiled further designs for the golf course – set to be based “five minutes” from Male’ by speedboat.

“The islands will also be designed for swimmers, divers and even private submarines to enter them from below, and the Dutch firm designing the scheme has said visitors will be able to rent private submarines that can surface right in the middle of their living rooms,” the newspaper reported.

Dutch Docklands, claims to have previously produced floating islands for several purposes including residential properties and jails out of a technology using concrete and polystyrene foam.

Company CEO Paul Van De Camp told the Daily Mail that he had promised the nation’s president that the man-made island developments would be an environmentally friendly project, as well as a solution to potential fears that the low-lying country could face extinction should sea levels rise sufficiently.

“’We have a way of building and sustaining this project that is environmentally friendly too. This is going to be an exclusively green development in a marine-protected area. The first part of the project to be built will be the golf course. This will be the first and only floating golf course in the world – and it comes complete with spectacular ocean views on every hole,” he was quoted as telling the Daily Mail.  “And then there’s the clubhouse. You get in an elevator and go underwater to get to it. It’s like being Captain Nemo down there.”

Koen Olthuis, who is working on the project through his Netherlands-based firm, WaterStudio, told the paper that the islands would be constructed outside of the country – potentially in India or the Middle East – a decision he claimed would ensure “no environmental cost to the Maldives”.

“When it comes to the golf course, the islands will be floated into position first and then the grass will be seeded and the trees planted afterwards,” he said.

The Daily Mail added that designers were aiming for the project to be run on renewable energy technology such as solar power, while claiming the construction would be carbon neutral.

Dutch Docklands had not returned calls to Minivan News at the time of press regarding the project.

Minister of tourism, Arts and Culture Ahmed Adheeb and Deputy Tourism Minister Mohamed Maleeh Jamal were also not responding to calls.

Environmental assessment

When the project was first announced back in 2010, the Maldives’ Environmental Protection Agency (EPA), which is responsible for conducting environmental impact assessments, said project would “definitely have negative environmental impacts”.

An EPA spokesperson at the time said: “it is not for the EPA to assess the risks of this project at this stage. The contractor [Dutch Docklands] is responsible for finding a suitable consultant to assess the risks.”

At the same time, a spokesperson for local environmental NGO Bluepeace said that as long as the project was conducted in an environmentally friendly manner, the proposals were “very exciting” and “innovative and weird”.

“I don’t think there should be a problem,” a Bluepeace spokesperson claimed, “but it depends on how they do it.”

Since the controversial transfer of power in February that brought President Dr Mohamd Waheed Hassan into office, the present government has pledged to try and transform the Maldives into the world’s largest marine reserve.

The government has claimed it also remains committed to the aims outlined by former President Mohamed Nasheed to make the Maldives a carbon neutral nation by 2020.

Minister of Environment and Energy Dr Mariyam Shakeela was not responding to calls from Minivan News today about the project.

Likes(0)Dislikes(0)

Finance Ministry proposes drastic austerity measures to Parliament

Parliament’s Finance Committee last week received a proposal from the Finance Ministry which, if accepted, would save MVR2.2billion (US$143million).

The austerity measures include raising Tourism Goods and Services Tax (TGST) to 15 percent,  terminating electricity subsidies in Male’, increasing import duties on alcohol and imposing a 3 percent  duty on oil, “reforming” the Aasandha health insurance scheme, and reducing the budget of every Ministry and independent institution by 15 percent – among other measures.

If successfully carried out the Ministry’s proposals would halve this year’s budget deficit, currently projected to reach MVR9.1billion (US$590million).

The original budget for 2012 envisioned that revenue would rise to MVR11.4billion (US$740million) with expenditure anticipated to be MVR14.5 billion (US$941million). This would have resulted in a budget deficit of around MVR3billion (US$194million), representing 10 percent of GDP.

However, the revised figures provided by the Finance Ministry have shown that revenue will only be MVR8.4billion (US$545million) for this year with actual expenditure rising to around MVR18 billion. The ensuing deficit would represent around 28 percent of the nominal GDP for 2012, which was predicted to be MVR31.7billion (US$2billion).

This ballooning deficit has alerted the IMF which has expressed concerns that without raising revenue and cutting expenditures the country risked exhausting its international reserves and sparking an economic crisis.

The Maldives Monetary Authority’s (MMA) most recent statistics show that the country’s gross international reserves had decreased by 2 percent in the 11 months up to May before dropping by a further 6 percent between May and June this year.

The MMA’s data shows this figure to represents around ten weeks worth of imports in the Maldives, a country which relies heavily on imports, spending around two thirds of its real GDP on foreign goods each year.

The current government has pointed the finger at the previous administration for the current budgetary issues whilst simultaneously implementing a series of policies which have added to its financial obligations.

These deficit expanding policies have included promoting 1000 police officers,  doubling of the budget of the Maldives Marketing and Public Relations Corporation (MMPRC) to MVR69.3million (US$4.5 million), hiring of 110 new police officers, and a reinterpretation of the legal provision for the payment of resort island lease extensions which had cost the government MVR92.4million (US$6million) already in comparison with the same point last year.

The government also chose to reintroduce a MVR100 million (US$6.5 million) fishing subsidies and to reimburse MVR443.7 million (US$28.8 million) in civil servant salaries, reversing measures implemented during the previous government’s own austerity drive.

The raft of measures currently being considered by the Finance Committee represent the most comprehensive effort thus far to reign in the deficit.

Austerity Measures

The proposed measures for reducing state expenditure were published in local newspaper Haveeru. They include discontinuing electricity subsidies in Male’ City which, where around one third of the nation’s population live, saving MVR135million (US$8.7million).

Reducing the state’s offices budget by up to 15 percent is expected to save MVR1.5billion (US$97million) and was first suggested by Finance Minister Abdulla Jihad in May. Jihad mentioned at the time that a pay review board would be convened in order to “harmonise” the pay of government appointees.

The document received by Haveeru revealed details that this pay review body will seek to restructure pay schemes in order to save MVR100million (US$6.5 million). It also emerged that MVR300million (US$19.5million) could be saved by introducing a recruitment freeze in the civil service.

The austerity plan also includes a reform of the Aasandha national health care scheme, the cost of which promised surged ahead of its MVR720million (US$46.7million) budgeted allowance shortly after its introduction in January. After discussions with the government, the Aasandha company has decided to share the costs of private treatments with patients.

The Finance Ministry predicts that reform of the Aasandha scheme can save the government MVR200million (US$12.9million).

Revenue raising

Proposed revenue raising measures include raising the import duty on oil, upon which the country relies heavily for fuel, to three percent. MMA figures show that the price of crude oil has decreased 15 percent in the 12 months leading up to June whilst the domestic price had remained the same with the exception of diesel which increased in price by 2 percent.

Import duties are also to be raised on items whose value exceeds MVR6.4million (US$41million) as well as on liquor imports. The duty on both of these items had been raised as part of the amended Export Import Act in December of last year which saw duties on pork and alcohol products, used exclusively by the resorts, go up by 42 percent.

The tourist industry will be similarly hard-hit by the proposals to raise Tourism Goods and Services Tax (TGST) to 15 percent.  The IMF had previously urged the government to double the 6 percent tax levied on all goods and services sold in resorts with Tourism Minister Ahmed Adheeb announcing his intention in May to consult the tourism industry.

Minivan News discussed the potential increase with several resort managers at the time, and was told that an increase would have  “serious ramifications” for certain sections of the market. One manager said that the fixed term contracts many resorts have with operators meant that increases to T-GST would have to be absorbed from revenue, resulting in potential cutbacks to staff or services.

Visitors to the Maldives could also be affected by the proposed increase in the Airport Service Charge from US$18 (MVR277) to US$30 (MVR462).

Further rises to the tax levied on luxury items would be accompanied by the introduction of taxes to the sale of flats and on telecoms service in the Finance Ministry’s plan.

The visa fee paid by foreigners working in the Maldives is also slated to see be increased by MVR150 (US$10). Estimates of expatriate workers are be as high as 110,000 although the same estimates suppose that around half to be undocumented.

Despite the recent suspension of sittings of the full Majlis, the Finance Committee continues to hold meetings as normal.

Likes(0)Dislikes(0)

Former finance chief questions timing of MMA private sector T-bill reform

Former Finance Minister Ahmed Inaz has questioned the timing of the Maldives Monetary Authority’s (MMA’s) decision to offer Treasury Bills (T-bills) to the wider private sector claiming it would compound the country’s budget deficit rather than directly address state debt.

Inaz, who served as Finance Minister under the administration of former President Mohamed Nasheed, said that until the present government put a lid on its expenditure to levels agreed in the national budgets of the last two or three years – extending T-bills to the wider private sector in the current climate would only prolong economic uncertainty.

The comments were made as local media reported yesterday that the Maldives Monetary Authority (MMA) had opted to allow “private groups” to purchase T-bills.

Such bills, which are sold by governments all over the world, serve as a short-term debt obligation backed by sovereign states. In the Maldives, T-bills are said to have a maximum maturity of six months, in which time they must be repaid, according to Inaz.

The economy, particularly national debt, has become an increasingly important issue for the coalition government of President Dr Mohamed Waheed Hassan.

Parliament’s Financial Committee in May released projection that the Maldives’ budget deficit will reach 27 percent of the GDP by the end of 2012, a 175 percent increase on earlier forecasts.

In recent weeks, the government has downplayed delayed payments of civil servant salaries as being the result of a banking “administrative error”, while also admitting to facing “economic difficulties” in covering months of outstanding premium payments resulting from the Aasandha universal healthcare programme.

Yesterday, Abdulla Yameen, parliamentary leader of the government-aligned Progressive Party of Maldives (PPM) told local media that the country was in “dire need” of financial assistance from the international community to help set right the economy.

Yameen and fellow PPM MP and Spokesperson Ahmed Mahlouf were not responding to calls from Minivan News today to clarify the comments.

T-bill extension

Finance Minister Abdulla Jihad said the decision to extend the availability of T-bills to private enterprise was a condition outlined by the Asia Development Bank (ADB) to secure loan funding. He was unable to give the exact amount of the loan at the time of press.

According to Jihad, T-bills had been previously only open to private financial institutions, a market place that he said was presently “saturated” in terms of demand, limiting the amount of T-bills the institutions were willing, or had the capacity, to purchase.

“The issue was to open the market to private groups,” he said.

In regards to criticism from the previous administration about state spending, the Finance Minister pointed to a recent order for all government institutions to immediately reduce their budgets by 15 percent – a pledge Jihad stressed had been successfully realised.

However, former Finance Minister Inaz said by that extending the T-bill scheme without addressing wider concerns of groups like the International Monetary Fund (IMF) over government expenditure, authorities were only prolonging current economic instability rather than tackling the present spending shortfall.

“My reaction to the MMA’s proposals is that issuing T-bills to the private sector or these private groups is not going to help the situation. The budget deficit should be reduced at all costs. Then these T-bills could be introduced as a way to meet capital expenditure,” he said.

“Expenditure should of course not be reduced to a level that would kill off independent institutions and the democratic reform of recent years. But the best way forward is to maintain expenditure say to the levels set in the 2010 or 2011 budget, while increasing income.”

While accepting that current political tensions between the government and the now opposition Maldivian Democratic Party (MDP) made it difficult reach parliamentary agreement, Inaz said that the Majlis would need to agree on any changes to the state budget.

Inaz also called on policy makers to adopt a “broader mindset” by reviewing the present government’s decision, announced earlier this year, to restore import duties and reduce GST.

He believed that taxation measures such as the GST remained the easiest solution to boosting revenue.

Inaz contended that a focus on more direct taxation would allow the government to serve as a facilitator to encourage the private sector to generate economic activity.

T-Bill reliance under Nasheed

Despite concern over the timing of the MMA’s proposals, Inaz conceded that the previous administration had itself relied on debt financed through the sale of T-bills that amounted to about Rf 1.4billion in 2011. However, he claimed that the final budget passed under the Nasheed government in December 2011 was designed to reduce the nation’s budget deficit, while also cutting down on short-term debt obligations such as T-bills.

“The T-bills issued in 2011 amounted to Rf1.4 billion (US$90.8 million). We foresaw the need growing every year, but this is very difficult to maintain as the maximum maturity for T-bills is six months, during which time they must be paid back,” he said

However, Inaz added that before the controversial transfer of power in February that brought President Waheed into office, the Nasheed government had pledged to reduce its reliance on T-bills by focusing on generating revenue through economic reforms such as GST.

“This year though we were set to reduce our reliance on T-bills to about Rf 700 million (US$45.4 million) with a view to cutting back completely through repayments in the next two years or so.”

Local media reported in April last year that government debt accrued through the sale of T-bills to banks and financial enterprises was estimated to be equivalent to more than a third of this year’s Rf 12 billion (US$778.2 million) national budget, according to Maldives Monetary Authority (MMA) figures released at the time.

Likes(0)Dislikes(0)

Government must assess financial, investor impacts of airport renationalisation: Thasmeen

The Dhivehi Rayyithunge Party (DRP) has called on the government to consider the potential financial repercussions and impact on investor confidence should it renege on a contract with Indian infrastructure group GMR to develop Ibrahim Nasir international Airport (INIA).

DRP Leader Ahmed Thasmeen Ali today said the party had asked the current government to assess the possible implications of cancelling the GMR agreement in three key areas before his party decided on whether to agree to proceed with renationalising INIA.

An agreement now thought to amount to US$511M was signed between GMR and the previous government of Mohamed Nasheed in June 2010 to manage and build a new airport terminal by 2014, as well as renovate the existing airport facilities in the meantime

The deal, the largest single financial investment in the Maldives’ history, has since faced several protracted legal disputes resulting this month in the infrastructure giant referring a disputed US$25 Airport Development Charge (ADC) included in its contract to a court of arbitration in Singapore.

Several pro-government parties – including the DRP, the Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – advised President Waheed in June this year that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised.

The agreement endorsed six main points which included taking legal action to prevent the government’s decision to award the contract to GMR.

Thasmeen’s comments today about assessing the potential impacts of terminating the contract were made as Progressive Party of Maldives (PPM) Deputy Leader Umar Naseer alleged in local media that the DRP was now the “main obstacle” to the state resuming management of the airport.

The PPM is a coalition partner of the DRP in the government of President Dr Mohamed Waheed Hassan.

According to newspaper Haveeru, Naseer contended that an invitation from Indian Prime Minister Manmohan Singh to meet with Thasmeen this week was directly related to the GMR airport dispute.

With the Maldivian Democratic Party (MDP) and the PPM respectively holding the majority and minority leadership roles in parliament, he questioned the reason for Thasmeen’s invite other than discussing the airport case.

“I do not think this trip is related to anything else. The DRP not the main opposition anymore as everyone knows. Even if it is taken in an official manner, the parliament minority leader is from PPM,” Naseer was quoted as saying.

Naseer also claimed that President Mohamed Waheed Hassan’s government wanted to reclaim the management of the airport from GMR – a pledge he hoped would be carried out even without the support of the DRP.

An Anti-Corruption Commission (ACC) investigation into allegations that DRP Leader Thasmeen and Parliamentary Speaker Abdulla Shahid accepted US$1 million in bribes from GMR was last year reported to have “investigated thoroughly”, both men were cleared of wrongdoing over the case.

Thasmeen, Shahid and GMR have all vehemently dismissed the allegations of bribery.

Responding to Naseer’s claims today, Thasmeen told Minivan News that his recent visit to India was the result of a long-standing invitation by the Indian government to discuss a number of issues including the current political situation in the Maldives. He added the visit had not been related to GMR’s dispute with the government.

Thasmeen was not drawn into whether the issue of the GMR contract formed part of discussions, adding only that the prime minister had shown a desire for long-term stability in the Maldives during the talks.

“He was clear in his desire to see a resolution to the current political problems in the Maldives,” he said.

In addressing the issue of GMR, Thasmeen claimed that the DRP has already responded to a request by President Waheed for the views of his coalition government on how to proceed over the matter of the GMR case – but had yet to decide on possible renationalisation.

“In making a decision on this case and the GMR contract, there are three things to consider. These are the impacts on investor confidence from pulling out of such a deal,  the impact this will have on bilateral relations with friendly nations and the extent of the financial repercussions from terminating such a contract,” Thasmeen claimed. “What sort of compensation might there be for example?  The government is best placed to make such an assessment and we will wait for it to do so before making a decision on the case.”

While GMR has pledged to have the new terminal open by July 1, 2014 “irrespective” of outside issues, the Maldives government has pledged to back the will of parliament should it decide on re-nationalising the project.

The relationship between the airport developer and the government soured further late last month after the government temporarily called for a halt to work on the new airport terminal, alleging it had “violated rules and regulations” by not acquiring certain permissions from the Civil Aviation Authority.

In a statement, the infrastructure giant said the GMR Malé International Airport Private Limited (GMIAL) joint venture company had obtained “requisite approvals” under the regulations at the time construction commenced, but had since been asked to seek further approval from authorities.

“We have received a letter from Maldives Civil Aviation Authority asking us to seek its approval pursuant to a recent regulation, for the construction works related to the proposed new Passenger terminal building. Pending the approval, MCAA has directed stoppage of the said works,” GMR stated. “This has no impact on the operations of the airport at the existing terminal.”

Amidst claims by Attorney General Aishath Azima Shakoor that the “doors for dialogue” were still open over resolving the matter of the ADC case, a GMR spokesperson told Minivan News today that the company was not able to comment if fresh discussions with the government were taking place.  Shakoor was not responding to calls by Minivan News at the time of press.

The attorney general told Sun Online that the company could be waiting for up to two years for a resolution to the ADC court case in Singapore. She claimed that discussions between the company and the government remained the “best way” to resolve the issue therefore.

Compromise

Earlier this year, GMR said it had sought to compromise with the government by offering to exempt Maldivian citizens from paying the ADC. However, the Transport Ministry continued to demand that the infrastructure giant repay US$8.2 million deducted from the concession agreement.

Under the concession agreement, a US$25 Airport Development Charge (ADC) was to be levied on all outgoing passengers to part-fund the airport development.

However, while in opposition, the Dhivehi Qaumee Party (DQP), led by Dr Hassan Saeed, now President Dr Mohamed Waheed’s special advisor, and Dr Mohamed Jameel, now Home Minister, filed a successful case in the Civil Court in December 2011 blocking payment of the ADC on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government as a stopgap measure agreed to deduct the ADC from the concession fees payable by GMR, while it sought to appeal to verdict.

As a result, Dr Waheed’s government received only US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time the country is facing a crippling budget deficit, a foreign currency shortageplummeting investor confidencespiraling expenditure, and a drop off in foreign aid.

According to financial statements sent to MACL and released to local media, in the second quarter of 2012, GMR deducted the ADC revenue of US$7.1 million from total revenues of US$5.6 million, leaving the government with a bill for US$1.5 million.

Managing Director of MACL Mohamed Ibrahim told local newspaper Haveeru at the time that the government would not pay the amount, alleging that GMR’s deduction of the ADC from the revenue was illegal.

In its defence, MACL has said that its board of directors had been reformed with the arrival of the new government, and a decision made to annul the old board’s agreement to deduct the ADC revenue.

The government meanwhile sought to invalidate the GMR contract – and the clause invoking arbitration – by challenging the handling of the bidding process by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private development sector in developing countries.

“The advisory work was supported by AusAid (Australia), the Ministry of Foreign Affairs of the Netherlands, and DevCo. DevCo is a multi-donor program affiliated with the Private Infrastructure Development Group and funded by the UK’s Department for International Development, the Ministry of Foreign Affairs of the Netherlands, the Swedish International Development Agency, and the Austrian Development Agency,” the IFC explained, following a visit by the delegation in June to address the government’s concerns.

Following the first quarter deduction, GMR announced an employee benefits scheme converting 50 percent of employee salaries to US dollars from July onwards, and a one-percent profit-share.

Likes(0)Dislikes(0)

“Administrative issue” behind delayed civil service wage payments: Finance Minister

Finance Minister Abdulla Jihad has said that delays in paying wages to some state employees was the result of an “administrative issue” with the Bank of Maldives (BML) that was expected to be resolved by today.

Jihad told Minivan News that there were no issue maintaining civil servant salaries, adding that BML had been unable to credit accounts for the last few days. A BML spokesperson today responded that the company was “not aware of any such issues” concerning payments being made to accounts it held.

Meanwhile, several island councils have said they had not had any issues with providing wages to their staff.

Economic situation

The Maldives government last week said it was working on overcoming “economic difficulties” to cover several months of outstanding premium payments resulting from the Aasandha universal healthcare programme. Authorities are presently facing a 27 percent budget deficit that has already drawn concern from the International Monetary Fund (IMF).

Besides a crippling budget deficit, the Maldives is also facing a foreign currency shortageplummeting investor confidencespiraling expenditure, and a drop off in foreign aid.

Late last month the Finance Ministry also ordered all government institutions to immediately reduce their budgets by 15 percent.

However, Jihad denied that the present economic situation was adversely impacting the state’s ability to provide wages to civil servants this month.

“We are expecting crediting to occur as of today,” he said. “This is just an administrative issue with the bank.”

Both Civil Service Commission (CSC) President Mohamed Fahmy Hassan and Parliamentary Financial Committee Head Ahmed Nazim were not responding time of press.

However, a number of island councils have maintained that they have continued to receive state funding without any interruptions.

An official for the North Ari Atoll island of Maalhos’ Council Secretariat told Minivan News this afternoon that he was not aware of any issues concerning paying staff salaries, which had so far been received on time each month.

In Haa Alifu Atoll, Utheemu Island Councilor Asrar Adam said the council also had not experienced difficulties with paying wages

“We have been paying the salaries of the staffs on the last day of each month always and this month’s salary have been paid,” he said.

Island Councilor of Raa Atoll Innamaadhoo claimed that during the time of former President Mohamed Nasheed, the council was given funding for its 2012 salaries in advance – therefore ensuring it did not have any issues in paying staff.

“When our president was here everything went fine, we don’t have to worry about the salaries of 2012,” he said.

State revenue

The Maldives Inland Revenue Authority (MIRA) last month published its second quarter report for 2012, detailing the majority of government revenue (with the exception of import duties).

The MIRA report highlights a 16.8 percent increase in revenue collected compared to the same period for 2011, attributable to the increase in tourism GST from 3.5 percent in 2011 to 6 percent in 2012.

Tourism land rent collected for the period was MVR 465.4 million (US$30.2 million)  – a drop of 24.9 percent that was 12.3 percent lower than expected.

Airport Service Charge revenue meanwhile fell 18.6 percent, to MVR 172 million (US$11.2 million).

Total revenue collection for the first half of the year was MVR 3.5 billion, an increase of 59.2 percent compared to the corresponding period of 2011, but 8.4 percent lower than projected.

Likes(0)Dislikes(0)

The Maldives skill “gap” belying television reality

As a concept, it is a formula that has proved popular on television screens around the globe: take a high profile businesses or entrepreneur and allow people to compete in business challenges to earn a shot at the corporate big time as a fabled apprentice.

While reality shows like “The Apprentice” have proved hits with audiences in the UK and the US for the last decade, the Maldives this month concluded its first attempt at producing a business-focused reality TV – under the local guise of “The Interns”.

In a live final broadcast on Television Maldives (TVM) on July 15, a team of students from the Centre for Higher Secondary Education (CHSE) – coincidentally the show’s youngest participants – took the top prize of apprenticeships with some of the country’s largest private-sector employers.

But beyond the practical opportunities and job offers seemingly afforded through participation in reality TV contests, what real world opportunities does the Maldives’ private sector presently hold for the country’s next generation of graduates and school leavers?

Speaking to Minivan News this week, Deputy Minister for Education Anthu Ali said that for many school leavers in the country, regardless of their “academic merits”, a miss-match presently existed between the skills they were being given and those required by employers.

“When we consider the skills an employee needs in the country, say if they are applying for a secretarial role, the candidate may have the language knowledge of English and Dhivehi, but they are not taking short hand or these type of skills,” she said.

According to Anthu, the Education Ministry remained particularly concerned over the prospects available for pupils leaving school at 16, who did not going on to pursue further studies.

“A main challenge is for the 16 year-old pupils who are not going on past their O-levels,” she said. “For those students without the capacity to go into higher education or to do their A-levels, we need to be providing foundation studies.”

Anthu claimed that the government, over the last three years, had been working to try and develop a “platform” that served as a pathway for young people leaving school to help them into the job market.

“This is what we have tried during the last three years – even this year. What I mean by a pathway is not higher academic education, but vocational education,” she said.

According to Anthu, meetings have been taking place ass recently as this month with the tourism sector – as one of the country’s most significant employers – to increasingly tie the lucrative resort industry into this pathway.

She claimed that when looking at human resources nationally, there was a significant number of skilled jobs in the tourist sector being fulfilled by a mostly expatriate workforce.

Anthu said that local employees often “don’t have these skills”, adding that opportunities were required for training to open up these areas to local employees.

Social responsibility

Allied Insurance Company of the Maldives, one of the key sponsors behind “The Interns” show, said that beyond trying to boost its own Corporate Social Responsibility (CSR) initiatives, the television programme was devised from the company’s own concerns about finding suitable employees.

Company Managing Director Abdul Wahid Thowfeeq said the company had opted for a reality show format that would grant students the chance to gain experience in national marketing as well as showcasing their respective skills.

“The basic idea for the show came from the fact that Allied Insurance needed marketing personnel and we generally found there to be a lack of good candidates,” he claimed. “This is a problem faced by many companies here in the Maldives.”

Thowfeeq added that the company opted to back sponsoring a reality show as it hoped to encourage “real students” to experience marketing in a real world environment.

“We conceptualised the show so that even people at home could see there were opportunities here. There are the prospective jobs here, but the youth do not always appreciate the opportunities that are available,” he said, “They are also not aware of the expectations of their employers and the differences between education and workplace challenges.”

According to Thowfeeq, the objective of “The Interns” , at least from the company’s perspective, was fulfilled.

“Once the programme began, many of the participants featured got job offers – not just from Allied, but many other large-scale private employers in the country,” he said.

Inspiration

Discussing the inspiration for the programme, Thowfeeq said that while there were some similarities to “The Apprentice” in terms of content and design, the show was very much geared to local tastes and marketing challenges, such as having participants promoting the popular roadside beverage vendors around the capital.

He added that these challenges focused specifically on playing up the importance of key workplace skills such as customer service.

Thowfeeq contended that such challenges were of particular importance in the Maldives to provide skills in areas not presently covered in the national education curriculum for many students.

“Generally there is a gap between education and the job sector. When students complete their education, they tend to have high expectations of the job sector, but they do not have the orientation or skills to meet these needs,” he said. “A common feature of the job market is that employees do not understand about working in organisations or as part of a team.”

Thowfeeq said that besides better orientating graduates and school leavers to ensure they are prepared for work, employment should also have a positive factor in the country’s development.

“There are lots of influences on peoples lives right now, both societally and politically, we need to give a sense of hope to young people, hope that there is a promising career out there for them,” he said.

Thowfeeq contended that some of the challenges regarding training young people were n addressing that the skills required from workers in the country had drastically shifted over the last ten years.

“The skills needed for jobs in the Maldives are very different right now, especially in marketing. People need to be more specialised in their roles, more professional,” he claimed. “More training in this regard is needed for employers, but they are not getting opportunities. However, the youth themselves have to be willing to undergo this training, as well as be patient. The basic purpose of this programme was to educate the youth about prospective jobs. Such a show helps ourselves and other companies.”

Finalists

In terms of sourcing contestants for the show, the programme makers are said to have invited colleges from across the country to nominate certain students for inclusion . The eight teams chosen represented institutions including Maps College, Clique College, Cyryx College and the Maldives National University.

The eventual winners were Jayyida Badhry (19), Mariyam Hana (18), Ali Aslam (18), Mohamed Sameer (18) and Ahmed Nashiu Naeem (19), all representing the CHSE.

Speaking to Minivan News, Badhry, who before the show had been enrolled as part of a business studies course at CHSE, said ‘The Interns’ had provided a unique opportunity to develop practical skills currently not provided within the education syllabus.

“The show was a really good opportunity as we got to have many different experiences such as in understanding TV advertising,” she said.

Despite the group’s relatively young age compared to rival teams, Badhry claimed that the team’s success had been a result of team work and trusting each other to use their individual strengths.

“We are still quite young as a group and we didn’t have much experience, so we tried to make up for this through team work,” she added.

Of the five finalists, four are expected to commence a special internship with Allied Insurance after Ramazan, while one of the team will be taking a role at a prominent national marketing group.

According to Badhry, the experience on the show was proving to have an impact on her life ahead of taking up the new role – a job she was excited to begin.

“For anyone who is interested, I would recommend them looking for opportunities like this to gain practical experience of work life, It has been really great,” she claimed.

However, Badhry’s fellow team mates stressed concern that while there were opportunities out there for young people in the job market, there appeared to be some reluctance within the wider business community to entrust students with such responsibilities.

Nonetheless, back in the world of local reality television Allied MD Thowfeeq claimed that plans were already under way for a similar – though perhaps not identical – business-targeted show for next year.

“We are thinking about continuing the focus with a similar show next year, though we would like to select another professions relevant to the local community where the skills of young people need to be improved,” he claimed.

Likes(0)Dislikes(0)