Business & Tourism – Page 6 – Minivan News

Government signs MoU with Dubai Ports World

The Maldivian government signed a Memorandum of Understanding (MoU) with Dubai Ports (DP) World on Thursday (March 19) to develop a port at Thilafushi as a free trade zone.

In a press statement on Sunday (March 22), DP World said the MoU was signed for the development of the Maldives’ “ports and logistics industry” by DP World Chairman Sultan Ahmed Bin Sulayem and Tourism Minister Ahmed Adeeb.

“The Maldives has been growing rapidly, driven largely by its tourism development. We are working with them to help diversify the economy through building infrastructure, logistics and transport links needed to make this happen,” said Bin Sulayem.

“The UAE has much experience and expertise in this area thanks to the vision of our leaders to explore new growth strategies. We are proud to share our expertise with the Maldives as they develop their capabilities in the global supply chain industry.”

The press release added that the MoU was the outcome of several meetings between DP World and Maldivian government officials over the past few months, including discussions between Bin Sulayem and President Abdulla Yameen in July and September 2014.

Economic Development Minister Mohamed Saeed and Youth and Sports Minister Mohamed Maleeh Jamal also attended the signing ceremony along with key DP World company officials

The global marine terminal operator said the meeting “provided an opportunity to highlight DP World’s global portfolio and expertise in assisting partners with the development of their infrastructure and transport networks.”

After signing the MoU in Dubai, Adeeb told local media that DP World has agreed to complete the new Thilafushi port with a free trade zone within two years of signing a joint venture agreement with the Maldives Ports Limited (MPL).

A timeline for the project has been agreed upon and the MoU was signed with a view to signing the joint venture agreement in a month, he said.

“The first phase would also include a big cargo container terminal. First the port service, then a free trade zone for the imported cargo which will be isolated with a fence. Import and export cargo will be kept there,” the co-chair of the cabinet’s economic council was quoted as saying by Sun Online.

Adeeb – also chairman of the Special Economic Zones investment board – told the press last week that the central commercial port would be relocated from Malé to the industrial island of Thilafushi.

The envisioned free zone at Thilafushi port would include facilities for bulk breaking and transhipment cargo handling, he said, adding that the project would be divided into three phases with an estimated investment of between US$250 and US$300 million.

A larger port was essential logistically if 50 new resorts were to be developed, he continued, noting difficulties at present in importing and clearing resort supplies through the central port.

Economic Development Minister Mohamed Saeed said the Maldives was ripe for “an ocean economy” and the current administration has undertaken unprecedented efforts to diversify the economy with a focus of maritime businesses.

Congestion was a serious problem at the Malé commercial port, which has space for about 60,000 containers, Saeed explained.

“Due to the efficiency of the ports in Singapore and Dubai with an established efficient free trade zone, cargo from all over the world is being brought to these ports. It’s collected and then go to their destination. So merchants can get items even if they didn’t produce the cargo and it’s cheaper to bring things in bulk and redistribute,” Adeeb told local media after signing the MoU.

Photos by Economic Development Minister Mohamed Saeed

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Saudi Arabia assured loan assistance for airport development, says Dr Shainee

Saudi Arabia has assured loan assistance at a low interest rate from the Saudi Fund to develop the Ibrahim Nasir International Airport (INIA), Minister of Fisheries and Agriculture Dr Mohamed Shainee has revealed.

Speaking to reporters at the airport yesterday after accompanying President Abdulla Yameen during a state visit to the kingdom, Dr Shainee said Saudi Arabia has offered a lower interest rate than other parties the government has approached.

“They have indicated they would give us a loan with about two percent [interest],” he said.

A Maldivian delegation would depart for Saudi Arabia in the next week for further discussions, he added.

Last month, the government revealed that the estimated cost of the INIA development and expansion project was US$845 million. The government had previously announced it was seeking a US$600million loan from China and Japan for airport development.

While a project for building a second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), development of the airport terminal was awarded to Japanese Taisei Corporation.

President Yameen meanwhile told journalists that several bilateral agreements between Saudi Arabia and Maldives would be signed in the next two months.

The Maldives sought assistance in various fields, such as education, health, and foreign investment, Yameen said, and “constructive” discussions took place with government ministers during the visit.

During the state visit – made at the invitation of the Saudi king – President Yameen met the Saudi Arabian ministers for education, defence, petroleum and mineral resources, and finance.

The Saudi Arabian government has pledged 150 scholarships for Maldivian students to pursue higher education in Saudi institutions, he noted, stressing that relations between the countries have been significantly strengthened as a result of the visit.

Reject “foreign interference”

A joint communique issued on March 18 noted that President Yameen “held talks with the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al-Saud in an amicable atmosphere that reflected the bonds of brotherhood that unite the two countries and the excellent relations between them.”

“The two sides confirmed their intentions to continue fortifying their bilateral cooperation in all fields including foreign affairs, defence, Islamic affairs, judiciary, economy, commerce, investment, education, and health for the purpose of accomplishing their common interests and providing support to the issues of the Muslim nation, while rejecting any foreign interference in their internal affairs,” read the communique.

“To this end, the Kingdom of Saudi Arabia has agreed to open an embassy in the Republic of Maldives.”

It also stated that the two sides agreed to increase “their commercial exchange while expanding and enhancing investment between the two countries and extending invitations to their respective private sectors to explore the available investment opportunities in both countries.”

“The Saudi Fund for Development will continue to finance the development projects in the Republic of Maldives and will consider participating in the expansion of Malé airport and beache preservation in Hulhumalé,” it added.

President Yameen meanwhile “emphasised that the Kingdom of Saudi Arabia is the primary partner of the Republic of Maldives.”

Islamic Minister Dr Mohamed Shaheem Ali Saeed told the press that the Saudi government has agreed to increase the Maldives quota from 1,000 pilgrims at present to 2,000 next year.

President Yameen also requested a plot of land in Mecca to construct a hotel for Maldivian pilgrims, Shaheem revealed, the Saudi government agreed to allocate land.

Moreover, the Saudi government would assist with the establishment of an Islamic University in the Maldives, he added.

King Salman asked for an agreement to be signed between the Maldivian Islamic ministry and the Saudi counterpart in order to provide assistance in Islamic affairs, Shaheem said.

The communique also noted that the “two sides have agreed to finalise the procedures leading to the signing of an agreement in Islamic affairs between the two countries.”

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Tourist arrivals reach record high in February

Tourist arrivals reached an all-time record level for a single month with 120,468 visitors in February, the Ministry of Tourism has revealed.

Arrivals in February was 8.8 percent higher than the same period last year, which was “a significant improvement compared to the negative growth (-7.8 percent) registered in January 2015,” the tourism ministry observed in a statement on Thursday (March 19).

“With this boost, the total arrivals at end February 2015 was 217,541, an increase of +0.7 percent compared with the 216,001 tourists that visited during the same period of 2014,” the ministry noted.

The occupancy rate meanwhile declined by 4.8 percent this year, with an average occupancy rate of 80.8 percent. The average duration of stay was six days.

After falling 12.2 percent in December and 33.1 percent in January, Chinese arrivals bounced back in February with a 30.5 growth compared to February 2014.

A total of 43,349 Chinese tourists visited the Maldives last month.

At a press conference last week, Tourism Minister Ahmed Adeeb suggested that Chinese visitors increased sharply as the Chinese New Year was on February 13.

Adeeb noted that overall arrivals growth was at about one percent compared to the first two months of 2014.

“So our travel trends is not falling. The past month was a very profitable month,” he said.

However, the Maldives Inland Revenue Authority (MIRA) revealed earlier this month that revenue collection was 17.6 percent below forecasts due to “the decrease in tourism related revenues by 17 percent as tourist arrivals did not meet expectations.”

MIRA also revealed that US$2.2 million was collected last month as airport service charge, compared to US$2.3 million in February 2014.

However, Adeeb said income from Tourism Goods and Services Tax (T-GST) for February would be collected in March, and would reflect the arrivals hike.

Referring to travel alerts issued by the UK in the wake of political unrest sparked by the arrest of former President Mohamed Nasheed on February 22, Adeeb noted that tourists were only advised to avoid Malé due to demonstrations.

Asked if arrivals could decline in March due to the ongoing political crisis, Adeeb said the tourism ministry has been monitoring booking cancellations.

“Our monitoring shows there have been no booking cancelations in March,” he said, adding that he expected arrivals to remain unchanged from March 2014.

Condemning calls for tourism boycott, Adeeb said the government was countering the social media campaign by opposition supporters through marketing efforts by PR firms.

Adeeb suggested the tourism boycott campaign would not have “much of an impact.”

Regional markets

Europe retained top spot as the largest regional source market for tourist arrivals with a 49.3 percent market share in 2015.

However, with 107,263 visitors so far this year, total arrivals from Europe registered a marginal decline of 0.8 percent.

European arrivals in February declined by 1.9 percent compared to the same period last year on the back of a steep 53.4 percent decline in arrivals from Russia.

However, arrivals from the United Kingdom and Germany increased by 10.6 percent and 10.3 percent, respectively. The number of Italian tourists also grew by 10.3 percent compared to February 2014.

Total arrivals from Western Europe declined by 2.9 percent due to a fall of 15.5 percent in arrivals from France, which the tourism ministry said has been posting negative growth since July 2014.

In terms of individual markets, China remains the largest source market with a 29.3 percent market share, followed by Italy, the United Kingdom, and Germany.

Both the national carrier Maldivian Airlines and Mega Maldives launched direct weekly flights to Chinese cities during February.

The Maldives Marketing and Tourism Development Corporation (MMPRC) also conducted roadshows in three Indian cities last month to promote the Maldives as a destination for Indian tourists.

With 4,235 visitors, arrivals from India grew by 17.8 percent in February with a market share of 3.7 percent.

“During the last two months of 2015, while important markets such as Russia, and Japan registered declines of -43.9 percent and -0.6 percent respectively, significant increases were recorded from Denmark (+82.8 percent), United Arab Emirates (+47.9 percent), Brazil (+44.6 percent), Spain (+40 percent) and Romania (+33.9 percent) at the end of the period,” the ministry noted.

At the end of February, the Maldives had 308 registered establishments in operation with a bed capacity of 27,670.

“The operational capacity included 106 resorts with 23,247 beds, 15 hotels with 1,508 beds, 106 guest houses with 1,568 beds and 81 safari vessels with 1,367 beds,” the ministry revealed.

“The total tourist bed nights of these operational establishments at the end of the period was 1,313,259 which was a drop (-3.7 percent) compared with the same period of 2014.”

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Government to sign MoU with Dubai Ports World to develop port at Thilafushi

The government is planning to relocate the central commercial port from Malé to Thilafushi and sign a joint venture agreement with Dubai Ports (DP) World to develop the port as a free zone, the cabinet’s economic council has revealed.

Speaking at a press conference at the President’s Office yesterday, Tourism Minister Ahmed Adeeb said “advance discussions” have taken place with DP World about a joint venture with the government.

“In my view, such progress shows the confidence in the Maldives,” the co-chair of the economic council said.

Economic Development Minister Mohamed Saeed and Youth Minister Mohamed Maleeh Jamal would depart for Dubai on Wednesday night to sign a Memorandum of Understanding (MoU), Adeeb said.

DP World is one of the largest marine terminal operators in the world and currently manages more than 60 terminals across six continents.

The envisioned free zone at Thilafushi port would include facilities for bulk breaking and transhipment cargo handling, Adeeb said.

DP World has expressed interest in investing in the port project, he continued, and negotiations were ongoing concerning details of the joint venture between the Emirati company and the Maldives Ports Limited (MPL).

DP World would be required to keep existing local staff at MPL, bring Maldivians to the top management and provide training, Adeeb said.

The project would be divided into three phases with an estimated investment of between US$250 and US$300 million, he said.

Adeeb explained that DP World would be offered incentives under the government’s flagship Special Economic Zones (SEZ) Act with “a free trade zone area” and relaxed regulations.

A larger port was essential logistically if 50 new resorts were to be developed, he continued, noting difficulties at present in importing and clearing resort supplies through the central port.

The government would also hire a port expert for the negotiations to ensure the “best deal” for the Maldives, he added.

Economic Development Minister Saeed said the Maldives was ripe for “an ocean economy” and the current administration has undertaken unprecedented efforts to diversify the economy with a focus of maritime businesses.

Congestion was a serious problem at the Malé commercial port, which has space for about 60,000 containers, Saeed explained.

The SEZ investment board was in the process of finalising plans for establishing “a free zone or dedicated free trade zone” at the port, Saeed revealed.

During last year’s budget debate, opposition MPs expressed skepticism of the government’s forecast of US$100 million expected as acquisition fees for SEZs by August 2015.

The opposition has also criticised the lack of significant foreign investments despite assurances by President Abdulla Yameen’s administration with the passage of the SEZ law last year.

Saeed meanwhile noted that the seaport project was announced in April last year at an investor forum in Singapore.

“So in a very short period of time, we have steadied the economy, stabilised the currency, increased the gross reserve, increased investor confidence, and while solving issues in the domestic environment or arena, we are seeing today that what this government is doing is real governance,” he said.

“So citizens should rejoice. And I believe that the progress we are making is unprecedented in recent history.”

Adeeb also said projects to construct a new terminal and second runway at the Ibrahim Nasir International Airport (INIA) as well as a bridge connecting the capital to Hulhumalé would begin before the end of the year.

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Government issues loans to 14 recipients under fisheries loan scheme

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

President Abdulla Yameen presented award letters at the President’s Office this morning.

In his remarks at the ceremony, President Yameen said the loan scheme was “a stimulus” to the economy, which would be beneficial to one of the most important industries in the country.

“For the population in islands, the employment that brings the biggest income is still, without a doubt, the fisheries sector,” he said.

The “impetus or stimulus” for the fisheries industry was part of the government’s efforts to “improve the fundamentals of the economy,” he added.

According to the fisheries ministry, 60 percent of the funds were earmarked for youth. The loans were issued at a six percent interest rate, the ministry said, and was intended to provide financial support for boat building as well as purchasing engines and other equipment.

Fisheries industry

The annual fish catch in the Maldives declined from approximately 185,000 tonnes of fish caught in 2006 to about 70,000 tonnes in 2011.

In its latest monthly economic review, the Maldives Monetary Authority revealed that in January 2015 “the volume of fish exports declined by 18 percent in annual terms due to the decline in export of both frozen skipjack tuna and yellowfin tuna exports.”

“Similarly, earnings on fish exports also declined by 14 percent during the review month, which can be attributed to the fall in frozen tuna exports,” the review stated.

Yameen meanwhile said the government’s objective was encouraging youth to take up fishing by providing loans to cover the high initial capital investment.

He noted that the loan scheme was part of the ruling Progressive Party of Maldives’ manifesto pledges.

The present loan scheme was “symbolic” as the figure was a fraction of the state budget, Yameen observed, but higher amounts could be allocated in the future based on the interest from the public.

As only three of the 14 recipients awarded the loans today were young fishermen, Yameen urged more youth – the “target group” – to apply.

The amount allocated for the loan scheme could be doubled if 80 percent of the 14 recipients had been youth, he said, adding that the mindset of Maldivian youth needed to change.

The willingness of youth to become gainfully employed or start up enterprises was essential for the success of the government’s youth programmes, he said.

Fishermen in the Maldives earn a high income, Yameen continued, suggesting that the low number of fishermen who have joined the government’s insurance scheme showed that fishing was lucrative.

The ‘beyas nubeyas’ insurance scheme was part of a PPM pledge to provide MVR10,000 (US$649) a month to fishermen during lean periods.

For the scheme to succeed, Yameen said fishermen needed to register for the government to manage the fund.

“But we believe there isn’t that much of an interest in this because an individual believes his income is higher than MVR10,000,” he said.

“If not, the interest would be there. If you are to join an insurance scheme, you have to pay some kind of premium from the day you join.”

The lack of interest suggested that fishermen did not want to pay the premium as they earned enough during peak periods, Yameen said.

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Economic growth relatively strong, but public debt ratio high: IMF

Economic growth in the Maldives is expected to remain “relatively strong in the near term,” but persistent fiscal deficits have driven up the public debt ratio to a high level, the International Monetary Fund (IMF) has said.

In a press statement last week following its executive board’s 2014 Article IV consultation with the Maldives, the IMF noted that growth is estimated to have reached five percent last year on the back of strong tourism activity, low inflation levels, and reduction in the current account deficit.

“However, persistent and growing fiscal deficits have driven up the public debt ratio to a high level,” the IMF observed.

“The fiscal deficit increased to an estimated 7.8 percent of GDP in 2013 and, following increases in recurrent spending, the deficit is likely to have widened further in 2014. Sustained primary deficits have led to an increase in the public debt level from 52 percent in 2009 to 75 percent of GDP in 2014.”

However, presenting the 2015 state budget to parliament in November, Finance Minister Abdulla Jihad said public debt was expected to reach MVR31 billion (US$2 billion) or 67 percent of GDP at the end of 2014.

Moreover, Jihad said the estimate for economic growth in 2014 was 8.5 percent, significantly higher than the IMF estimate.

In its monthly economic review for January, the Maldives Monetary Authority (MMA) revealed that the “total outstanding stock of government securities, which includes Treasury bills (T-bills) and Treasury bonds (T-bonds), rose by 53 percent in annual terms and reached MVR17.6 billion [US$1.1 billion] at the end of January 2015.”

“The annual increase in T-bonds reflects the conversion of a short term loan extended to the government by the MMA to T-bonds,” the central bank explained.

While the government’s forecast for economic growth in 2015 was 10.5 percent, the IMF expects growth to be around 5 percent this year.

Growth in 2014 was driven by “a rapid expansion from Asian markets and a tepid recovery from Europe,” the IMF noted.

“Higher tourism exports and subdued global food and fuel inflation have helped reduce the current account deficit to around 8.4 percent of GDP in 2014; and following significant data revisions, the current account is now substantially smaller than previously estimated. Lower oil prices have improved the outlook for the current account and inflation in 2015,” the IMF explained.

“Gross official reserves have risen to around $614 mn (2.8 months imports). Financial soundness indicators are slowly improving, monetary conditions are loose, but credit growth is subdued at just 0.5 percent year on year to November 2014.”

Reining in the fiscal deficit

The IMF welcomed the government’s cost-cutting and revenue raising measures for 2015 – intended to rein in the fiscal deficit -including imposing a green tax, acquiring fees from Special Economic Zones (SEZs), raising import duties, a public employment freeze, and better targeting of subsidies.

“However, further fiscal adjustment measures would be needed to place debt ratios firmly on a downward path,” the IMF cautioned.

Moreover, the IMF noted that “the fiscal adjustment envisaged in the 2015 budget will have a mildly negative effect on growth.”

“There is also some upside potential if lower oil prices are sustained. However, with limited policy buffers, the economy is vulnerable to fiscal slippages and inward spillovers. In the event of large fiscal overruns relative to the authorities’ targets, borrowing costs and monetization could increase, which would weaken the external position,” the press release stated.

In addition to the proposed revenue raising – which it suggested would “only have a temporary effect” – the IMF advised that “durable fiscal adjustment, with a focus on expenditure restraint, will be needed to place the public debt-to-GDP ratio on a downward path over the medium term, consistent with the Fiscal Responsibility Law.”

The IMF executive board also welcomed “the authorities’ commitment to avoiding the monetization of the fiscal deficit, which will help direct monetary policy at supporting the exchange rate regime and build buffers.”

The directors “supported plans to make greater use of market-based financing for government debt, including by developing the government securities market” and welcomed “the improvement in financial soundness indicators, and called for continued efforts to strengthen financial supervision, including measures to ensure uniform high standards for institutions that decide to operate in special economic zones.”

The IMF also suggested the stabilised exchange rate regime was “appropriate for Maldives,” welcomed “the increase in official reserves, and recommended continued strengthening of the official reserves position.”

On key medium-term objectives, the IMF recommended public service delivery and economic diversification and welcomed “proposals for establishing regional hubs and improving inter-island connectivity.”

“Directors stressed that strict ring-fencing of tax exemptions for special economic zones will be necessary to preserve the tax base. They also emphasized that scaling up infrastructure investment should be implemented efficiently in order to boost growth potential,” the press release stated in conclusion.

“Directors welcomed the significant recent improvements in macroeconomic statistics, and encouraged the authorities to continue to strengthen data quality and availability, including adopting a statistics law to enhance data provision, to assist policy decisions.”

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Businesses need an “economic tsar” or a “tyrant” to succeed, says President Yameen

An “economic tsar” or a “tyrant” is essential for a business to succeed, President Abdulla Yameen said at a ceremony held last night to celebrate local investment company Alia’s 50th anniversary.

While business decisions are made in boardrooms after considering social factors, President Yameen said economic decisions should be taken by “someone with an economic mindset.”

“Success for a business is to have an economic tsar or an economic tyrant leading it,” said Yameen, addressing Alia’s senior management.

Alia Group has remained successful for so long because it is a “strong family business,” Yameen suggested.

“There cannot be many owners in a business. Businesses will get suggestions from the board, but when it comes to decisions, if there is one person who makes the decisions, it is more efficient,” he added.

Alia – founded by the late Ali Abdulla, father of former first lady Laila Ibrahim – started out in the early 1960s as Alia carpentry, before expanding into the construction industry.

Ten years later, the company reached an agreement with Yamaha, and introduced the Yamaha outboard engine to the Maldives, still being widely used in the transportation industry.

President Yameen praised Ali Abdulla for his vision and forward thinking, adding that under his management Alia had transformed the construction industry whilst revolutionising sea transportation with the introduction of the Yamaha engine.

Economy and investments

Yameen went on to say that the government is aiming toward increasing the rate of economic growth in the Maldives.

“The GDP growth this year is estimated at eight percent or higher,” he said.

“This growth, when compared to other countries and our close neighbour’s sluggish two to three percent growth, is a very vibrant economic situation.”

Last year, the government enacted its its flagship Special Economic Zones (SEZs) Act, which President Yameen’s administration insists would attract large scale foreign direct investments.

While the government forecasts it will receive US$ 100 million as acquisition fees for the SEZs by August 2015, the opposition has criticised the lack of significant foreign investments despite assurances from the government.

Last night, Yameen said peace and stability in the Maldives together with the government’s policies would spark interest from potential foreign investors.

“If we are able to grab the attention of the investors, and with the current direction of the economy, there will be big infrastructure projects in the future,” said Yameen.

Such investments would provide opportunities for local construction companies and create employment opportunities for the youth, he said.

“Sovereign guarantee”

President Yameen last night reiterated the government’s pledge to provide sovereign guarantees on loans to develop new resorts, noting that that the tourism industry offers “lucrative” employment opportunities for youth.

The economy does not benefit if resort development on islands leased by the government remains stalled for eight or 12 years, Yameen said.

“The rent for the islands might go into MIRA [Maldives Inland Revenue Authority],” he continued.

“However, the opportunity cost of the eight years is much higher. Imagine the amount of dollars which would cumulate and roll through the resort if it had been developed.”

Last year, the cabinet’s economic council announced plans to remove import duty on construction material needed for the refurbishments of resorts, in order to stimulate resort development.

Correction: This article previously identified Alia’s founder as Ali Ibrahim. This is incorrect. Alia was founded by Ali Abdulla.

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INIA capacity will increase threefold with new runway and terminal, says economic council

Additional reporting by Hassan Mohamed

The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.

At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.

“The previous development concept was only for the development of the terminal,” says Saeed.

“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”

After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.

“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.

Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.

The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.

The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.

Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.

In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.

The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.

The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.

Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.

Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.

Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.

GMR Compensation

In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.

A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).

The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.

However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.

The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.

Chinese arrivals

Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.

However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.

“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.

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High Court overturns stay order halting seizure of Villa properties

The High Court today overturned a Civil Court stay order halting the seizure of three islands and two lagoons belonging to the Villa Group, a company owned by Jumhooree Party (JP) Leader Gasim Ibrahim.

The Tourism Ministry on February 5 ordered the Villa group to return Thaa Atoll Elaa, Raa Atoll Maanenfushi, Gaafu Dhaal Atoll Gazeera, Kaafu Atoll Maadhihgaru lagoon, and Vaavehdhi lagoon.

The islands and lagoons had been granted as compensation for the nationalisation of several development projects, including Kadhdhoo airport.

In its February 11 stay order, the Civil Court said the ministry’s termination of the settlement agreement could cause irrevocable damages to the company, and noted the properties had been granted due to the government’s inability to bear the burden of a financial or monetary compensation.

However, the High Court ruled that the lower court had not considered protecting the state from potential damages from the stay order.

“The interests of the state protected from not issuing the stay order is larger than the interests of Villa Hotels and Resorts”, the High Court ruling said.

The Civil Court’s injunction also violated “judicial and legal principles”, the panel of three judges unanimously ruled.

The Tourism Ministry’s Senior Legal Officer Faseeh Zahir said the ministry had not yet made any moves following the High Court order as they are yet to receive confirmation from the Attorney General’s Office.

Gasim has previously contended the ministry is punishing him for his recent alliance with the opposition Maldivian Democratic Party (MDP) against what they allege to be President Abdulla Yameen’s repeated violations of the constitution.

The JP’s opposition to key government legislation last year saw Gasim suffer setbacks to his businesses, as well as physical threats against his person – both of which the party blamed on Gasim’s former political allies.

Speaking at a joint rally of JP and Maldivian Democratic Party (MDP) on February 5, Gasim stated that “the Maldivian people will not allow injustice.”

“Forget it, nobody can push us back, we will be in the service of the Maldivian people. We will defend the fundamental rights and freedoms of the constitution,” Gasim said.

“You can seize everything, take it. Take it. After all, things can only be taken from people who have them,” he said.

President Abdulla Yameen has denied Gasim’s business reversals were a result of political events, stating that all businesses were treated equally under the law.

Meanwhile, the Tourism Minister Ahmed Adeeb claimed the Villa Group owes the government US$100million as rent and fines for properties leased to the company.

Gasim has denied the claim and called for Adeeb’s resignation.

Related to this story

Civil Court orders halt to seizure of lands allocated to Gasim’s Villa company

Gasim defiant as opposition sign agreement to defend Constitution

MDP and JP reach agreement on defence of Constitution

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