French flag carrier airline Airfrance is in the process of introducing scheduled flights to the Maldives in late 2012, President Mohamed Nasheed announced yesterday in his weekly radio address.
Delivering the radio address Friday morning shortly after his return from an official visit to France last week, President Nasheed said he met the Vice-President of Airfrance and was informed that preliminary preparations for the scheduled flights would take six months.
“Nevertheless, we expect that God willing an Airfrance scheduled flight will begin operations to the Maldives in Europe’s winter of 2012,” he said.
The government delegation also met with French tour operators to discuss ways to increase tourist arrivals from France, Nasheed added.
Prominent resort businessman and Independent MP Ahmed ‘Sun Travel’ Shiyam was part of the Maldives delegation.
“As you know, at the moment about 40,000 tourists from France visit the Maldives [annually],” Nasheed said. “Our aim is to double that figure and undertake efforts to attract French tourists in the same numbers as British tourists come to the Maldives right now.”
Tourist arrivals reached a record high in 2010 with 791,917 arrivals, a 20 percent increase compared to 2009. Tourists from the United Kingdom accounted for 15 percent of the total arrivals at 118,961.
While arrivals from France were considerably lower than England or the UK as a whole, the French market grew by nine percent in 2010 from the previous year. Some 50,373 French tourists visited the Maldives in 2009.
The Maldives meanwhile signed the Paris-Nairobi Initiative during the visit, Nasheed continued, which would facilitate French assistance for renewable energy programmes and adaptation measures for beach erosion.
President Nasheed signed the accord on behalf of the Maldives at a meeting with Nathalie Kosciusko-Morizet, the French Minister of Ecology, Sustainable Development, Transport and Housing.
The Maldivian delegation also met with senior officials of the Agence Française de Développement (AFD), a French bilateral development finance institution, who “gave the green light” for more water and sewerage projects in addition to the sewerage projects AFD has undertaken in Gaaf Dhaal Thinadhoo and Laamu Gan.
“Additionally, good discussions took place with the French Foreign Minister,” Nasheed continued. “He welcomed our standing together with France on the issue of Libya. I thanked the French government on behalf of the Maldivian people for their efforts to help the people of Libya.”
Parliament yesterday rejected at the preliminary stage a bill proposed by the government to modernise the existing Companies Act as part of its 18-bill economic reform package.
The bill was narrowly rejected 37-36 in a vote to send the draft legislation to committee for further review.
Jumhooree Party (JP) Leader Gasim Ibrahim – who voted with the ruling Maldivian Democratic Party (MDP) in August to pass the Goods and Services Tax (GST) legislation, the first of the 18 economic reform bills to be passed – cast the swing vote against the proposed company law.
According to the government, the purpose of the bill was to modernise bureaucratic procedures for formation and registration of companies and facilitate ease of doing business.
Among the main changes proposed to the existing law were enabling formation of companies with a single shareholder or a single director (the law currently requires at least two); abolishing the annual companies fee; specifying procedures for seeking authorisation from government agencies along with registration procedures for foreign investment companies; enabling the registration of branches of foreign or multi-national companies in the Maldives; outlining criteria for company directors and managing directors; specifying procedures for public disclosure; streamlining the process for dissolving registered companies; and delegating the tasks of the companies registrar to local councils.
During the preliminary debate stage, opposition MPs however contended that as a Companies Act was enacted in 1996, the government could not propose a bill under the same name.
MP Abdulla Yameen, who served as Trade Minister and chairman of the State Trading Organisation (STO) under the previous government, objected to a provision stipulating that the minimum capital required to register a company would be Rf2,000.
With the country’s level of development and an annual budget in excess of Rf12 billion, said Yameen, the figure was too low especially if directors’ and shareholders’ liability would be limited.
“The bill also proposes the creation of companies for a particular project. For a particular period,” he continued. “Private companies or limited liability companies are not formed for certain periods. They exist for perpetuity […] Therefore you cannot create a company to reclaim land in Gulhifalhu or a company for a three-year project.”
Moreover, Yameen added, the proposed law would give legal discretion to the registrar of companies or an official appointed by the President to deny requests for company registration if it is believed to pose a threat to national security.
“However, under the existing laws in the Maldives, a court of law shall determine that national security is endangered,” he said. “It is not something a registrar, a single person, could decide.”
Granting such discretion to a single state official, including the power to dissolve companies if it is believed to be in the public interest, was “how things are done in uncivilised countries,” he said.
MP Mariya Ahmed Didi, former chairwoman of the Maldivian Democratic Party (MDP), meanwhile argued that the concept of limited liability was “the means that advanced nations used to reach modern development.”
“Because we are unfamiliar with this concept what happens is that people are reluctant to invest their money in a business,” she explained, adding that the law would ensure that shareholders would be liable to the company’s debt only to the extent of their shareholding.
“Nothing positive”
Speaking to Minivan News today, MP Dr Abdulla Mausoom, deputy parliamentary group leader of the opposition Dhivehi Rayyithunge Party (DRP), said that the bill was framed to “give extra powers to the executive” and “open up the country to foreign businesses.”
Mausoom noted that there was an existing law that governed company formation and registration.
The DRP also objected to the government’s proposed amendments to the Immigration Act to grant resident visas to skilled expatriates as well as a bill to abolish existing foreign investment laws, Mausoom said.
“We voted against [the proposed company law] because we didn’t see anything positive in the bill,” he said.
Economic Development Minister Mahmoud Razi told Minivan News that the proposed company law was important to “level the playing field” and streamline business registration procedures to “make them simpler and more cohesive.”
As parliament had rejected the bill at the preliminary stage, said Razi, the government could not submit the bill again during the ongoing session.
“But we will consult with the legal people and stakeholders to propose the bill as amendments to the existing Company Act for the next session,” he said.
While it would have been “ideal” to pass all the component bills of the reform package on schedule, Razi continued, yesterday’s vote did not constitute a serious setback to the reform programme.
“It will have an impact, yes, but it will not be a very negative impact,” he said.
The High Court today denied a request by the Maldives National Chamber of Commerce and Industry (MNCCI) to grant a temporary injunction to halt the enactment of the Goods and Services Tax (GST) Act pending a court ruling on the constitutionality of contested provisions in the legislation.
Presiding Judge Abdul Gani Mohamed noted that the MNCCI filed the case late afternoon on Thursday, September 29, and that the GST law was in effect when the court reopened after the weekend. Following a preliminary hearing, the case was registered at the High Court on October 5.
If the court were to rule against MNCCI after granting a temporary injunction, the judge continued, it would not be possible to charge GST for goods sold in the intervening period.
Moreover, as article 65 of the Act states that the Tourism Goods and Service Tax (T-GST) Act would be repealed and replaced by the GST Act, the state would have to stop collecting T-GST from the tourism industry if the High Court issued the injunction.
Judge Abdul Gani said the claimant was unable to establish that irreversible damage would be caused to businesses if the injunction was not granted.
A majority of the five-judge panel therefore decided that there were no legal grounds to issue a temporary injunction to halt the enactment of the GST Act. In addition to Judge Abdul Gani, the panel consisted of Chief Judge Ahmed Shareef, Judge Dr Ezmiralda Zahir, Judge Abdul Raoof Ibrahim and Judge Abbas Shareef.
Legal challenge
At the first hearing of the case last week, lawyer Ali Hussein representing the Chamber of Commerce argued that article 51 of the GST Act – dealing with registration at the Maldives Inland Revenue Authority (MIRA) within a one-month period from the commencement of the Act – conflicted with articles 17 (non-discrimination) and 20 (equality before the law) of the constitution.
Ali Hussein contended that setting a threshold for registration – taxable supplies of the business over the course of 12 months must exceed Rf1 million – conflicted with the constitutional provision on “equal protection and equal benefit of the law.”
As a result of the threshold, said Ali Hussein, smaller shops would not charge GST while larger stores would do so for the same items.
The MNCCI therefore requested the High Court to strike down article 51 of the GST Act on the grounds that it was unconstitutional.
Moreover, it was argued that the one-month registration period provided in article 64 was too short and inadequate for businesses to prepare.
The third and last point of contention involved regulations drafted by MIRA under the Act not exempting semi-mature coconuts from GST despite different types of coconut being exempted under the Act.
Addressing the legal points raised by the MNCCI, State Attorney Moosa Alim referred to the concept of vertical equity in tax collection, whereby taxes paid increase with income.
Alim noted that article 17(b) of the constitution states that, “Special assistance or protection to disadvantaged individuals or groups, or to groups requiring special social assistance, as provided in law shall not be deemed to be discrimination.”
The length of the period for registration or glitches in implementation were not sufficient grounds to abolish the law, he said.
On the contention that the introduction of GST on top of custom duties amounted to double taxation, the state attorney submitted a list of 112 countries that charge import duties or tariffs in addition to Value Added Taxes (VATs).
MIRA’s Director General of Tax Planning Aiman Ibrahim explained that double taxation technically referred to the imposition of two or more taxes on the same income, property or financial transaction.
Businesses that paid GST on commodities purchased from wholesale traders or importers would have that amount deducted from their tax returns, he added.
Ali Hussein however contended that both import duties and the GST would be passed down to customers, who would be paying two taxes for the same item.
Asked by the Chief Judge whether a small business not eligible for GST registration could sell a taxable item without charging the tax, Aiman Ibrahim from MIRA replied yes.
Speaking on behalf of the MNCCI, the organisation’s Treasurer Ahmed Adheeb insisted that the Maldivian economy could not be compared to large economies such as Singapore or New Zealand.
“I know of nowhere in the world where GST has been implemented within a month,” he said, arguing that the cost of implementing the tax, in terms of monitoring and auditing tax returns, was prohibitive and outweighed the benefits.
Moreover, said Adheeb, there was no audit law in the Maldives and “only three licensed auditors.”
“We foresee serious problems that will eventually reach court as a result of [GST implementation],” he said.
In response, Aiman said there was “no connection between GST and audit licensing” as businesses would not be required to file audited reports for GST returns. “[The tax return] will be a single page document and MIRA will do the auditing,” he said.
Adjourning today’s hearing, Judge Abdul Gani observed that the legal points raised by were “very technical” in nature and offered both sides an opportunity to make a presentation on the technical issues involved in the case at the next court date.
Minivan News is proud to introduce our new subsidiary travel site www.Dhonisaurus.com, offering the first independent, comprehensive, reader reviews and ratings for the Maldives tourism industry.
A ‘dhoni’ is a traditional Maldivian vessel with a distinctly curved prow, while a thesaurus helps you choose exactly the right word for the occasion. Stick the words together: Dhonisaurus. The dinosaur is just a bonus.
The Maldives is world famous for its beaches and clear blue waters.
But what really makes one resort different from another? It’s surprisingly hard to tell from a glossy tourism brochure, or an article written by a well-pampered travel journalist.
Opinion sites such as TripAdvisor powerfully influence the decision of tourists to visit a destination, but these large, international travel review sites do not have the luxury of detail as they must be able to objectively measure a rented château in Paris alongside a backpacker hostel in Yemen.
Moreover, rather than staying a few nights, the average visitor to the Maldives spends US$10,000-12,000 and stays on a single island for several weeks, so we figure they could use a bit more detail before making the big decision.
We pick up where TripAdvisor leaves off, asking visitors to rate resorts for Rooms, Service, Beach, Activities, Dining, Bar Experience, House Reef, Environmental Responsibility, Value and ‘Look and Feel’. We average these scores and all submitted reviews to automatically generate an overall rating out of 100. This way the more ratings submitted the more accurate the reviews become.
The ratings on Dhonisaurus reflect readers’ opinions, not our own, and the site pays its way through banner advertising rather than being sponsored by a consortium of resorts and tour operators, or by taking a cut from bookings. We have a vested interest in giving useful, impartial information, as this makes readers come back, review their experience and help make us even more accurate and credible.
Because we take an average from 10 categories, our ratings may seem harsher than those of other Maldives review websites, but the advantage of doing things this way is that you can get an honest, overall picture of what a resort is really like behind the brochures and press junkets. It’s also the first time resorts in the Maldives have been reviewed and contrasted for qualities such as their environmental responsibility.
The in-house reviews on Dhonisaurus are written by Maldives experts, including guidebook author Adrian Neville, who has reviewed almost every resort in the country over 20 years writing about the Maldives.
Adrian and the Dhonisaurus team will also be answering questions posted by travellers in the new site’s Advice Forum, on topics as diverse as diving, expat living and marine biology.
As Dhonisaurus grows we intend to add local guest houses on inhabited islands, include useful tools and forum posts for independent travellers in the Maldives, develop a separate rating system for safari boats, and hold award ceremonies for the winners of each category.
We’re very excited about the launch of Dhonisaurus as it greatly expands Minivan News’ presence in the travel sector and the advertising opportunities we can offer, and gives us an additional revenue stream to reinvest in growing independent journalism in the Maldives.
For a limited time only we are offering discounted introductory rates on Dhonisaurus.com for businesses keen to capture a high-conversion audience right in the act of planning their trip to the Maldives.
We want Dhonisaurus to be comprehensive. If a resort is not listed or has just opened (or closed!), contact us and we will ensure it is amended. Listed resorts must be open and receiving guests.
The Anti-Corruption Commission (ACC) yesterday entered the Disaster Management Center (DMC) with a police escort to investigate files relating to a 2006 housing construction project in Laamu atoll.
The Ministry of Housing and Environment did not comment on the investigation’s purpose, which is being conducted four months after outstanding payments to the construction company were made.
Movey Construction Company was hired under the former government to manage an Rf18 million project in 2006, which was completed in 2007. In 2009, DMC delayed payments due to a financial shortage, and in January 2011 Movey Construction filed a complaint for financial losses.
Deputy Minister of Housing and Environment, Ahmed Zaki, said he had been puzzled by the delay. “All the paperwork was in order,” he told Minivan News today. Moreover, the complaint against the Disaster Management Center “had enough evidence, and the payments were made with approval by the Finance Ministry in May.”
Zaki said forensic experts had accompanied ACC staff yesterday to “review paperwork and files in a clear and informed fashion. The hard drives which had been removed for further examination were returned today, all clear.”
When asked if the ACC investigation implied a concern for corruption, Zaki said he did not believe there was any reason to suspect corruption in the dealings between DMC and Movey Construction Company.
“This is just an accusation because payments were delayed. But the payments were made this May with sufficient documents from all parties. The financial system in the Maldives is very transparent, there are a lot of layers, checks and balances, so I am confident that there is no issue of corruption here,” he said.
Police Sub-Inspector Ahmed Shiyam said the police would provide support as needed during the investigation.
“We have a signed agreement with the ACC to provide support as needed. Our forensic experts are currently working on the case,” Shiyam said.
Members of Movey Construction Company and the ACC were not available for comment.
Under the proposed legislation, an experienced Muslim foreigner may be appointed among the seven-judge bench for the court, which will have jurisdiction to handle cases relating to transactions concerning tourism, construction, international business, insurance, civil aviation, maritime, shipping, leasing, banking and finance, securities, fishing, company disputes, partnership, professional liability and intellectual property rights.
The mercantile court will also handle contract, trade and service provision, consumer and service recipient protection in cases worth more than Rf15 million (US$1 million).
During today’s preliminary debate on the bill, opposition MPs raised concern that allowing a foreign judge to sit on a Maldivian court would threaten the country’s independence.
MP Ibrahim Muttalib, who recently rejoined the religious conservative Adhaalath Party, alleged that the bill was part of a government “plot to destroy and dis-empower the judiciary.”
“We should be alert to the government’s efforts to change this country’s constitutional system with the scheming of the Jews,” he said, adding that the bill was drafted “under this scheme” by Independent MP for Kulhudhufushi South Mohamed Nasheed, who served as Legal Reform Minister in the last years of the former government.
“If this court is established, in order to bring the judiciary into disrepute, within a few days of its formation there will be courts established in every inhabited island and existing courts will be made redundant,” he claimed.
Other opposition MPs contended that there were enough qualified professionals with the requisite experience in the Maldives.
“If there aren’t competent enough judges, they can be trained,” suggested MP Hassan Latheef.
Appointing foreign judges to a Maldivian court was “completely unacceptable,” said MP Abdul Azeez Jamal Abubakur, objecting to different criteria for Maldivian and foreign judges in the bill.
MP Dr Abdulla Mausoom of the Dhivehi Rayyithunge Party (DRP) acknowledged the need for the legislation but questioned the provision for two foreign judges.
Presenting the legislation on behalf of the government, MP Mohamed Musthafa of the ruling Maldivian Democratic Party (MDP) stressed the “urgent” importance of establishing international standards for dispute resolution in the Maldivian judiciary.
The lack of legal protection for foreign investors in the country was “the main challenge” to operating their businesses, Musthafa explained.
The provision to allow a foreign judge on the bench is to seek expert assistance from foreign judges to establish the court, Musthafa continued, which would have the same status or rank as a superior court.
The court would also have the authority to transfer cases from other courts that fall under its jurisdiction.
Investor confidence
The legislation comes in the wake of concerns aired by international organisations such as the International Committee of Jurists (ICJ) that the existing Maldivian judiciary lacked the independence and capacity to rule in cases involving complex civil proceedings.
Speaking to Minivan News in March after several weeks observing the operation of the Maldives’ Judicial Services Commission (JSC), former Australian Supreme Court Justice Professor Murray Kellam said that an impartial judicial system was a key factor in encouraging foreign investment and could have a direct and significant impact on the economy.
This was something that Singapore recognised 15 years ago, he said.
“They understood the value of a civil system that is incorruptible and competent. They spent a lot of money on their judiciary and Transparency International now rates their civil legal system as one of the best in the world.
“Singapore realised that one of the best ways to attract investment was to have a system whereby international investors knew they would get a fair go in domestic courts. If you look at the circumstances in other parts of the world where investors have no confidence in the judiciary, that deters investment and takes it offshore. They’ll go somewhere else.
Citing Adam Smith, considered one of the founders of modern capitalism, Kellam observed that “Commerce and manufacturers can seldom flourish long in any state which does not enjoy a regular administration of justice, in which people do not feel themselves secure in possession of their property, in which the faith of contracts is not supported by law.”
As a foreign investor, Kellam said, “you want to know that contact you enter into with domestic partners will be understood and enforced by courts if there is a breach. You want courts to judge you impartially – you don’t want to be discriminated against because you are a foreigner.”
“Secondly, it’s no good getting judgement if no there is enforcement – which is a major factor in developing countries. Sure you can get a judgement, but it’s not worth the paper it’s written on because there is no process for getting it enforced, and you can’t turn judgements into anything productive.”
Singapore had recognised this, and become not only a hub for foreign investment but also a regional hub for commercial arbitration, Kellam said.
“People from around the region will use Singapore as a place of law and business,” Kellam observed.
President Mohamed Nasheed’s energy advisor Mike Mason has unveiled the technical and economic justification for transforming the Maldives into a solar-powered nation.
“I have the oily rag job,” said the former mining engineer, speaking at Soneva Fushi’s Slow Life Eco Symposium about the government’s ambition to generate 60 percent of the country’s electricity needs through solar. “It’s a bit like trying to build a complex aircraft while the captain’s trying to fly it.”
Last year the Maldives spent 16 percent of its GDP on fossil fuels, making the country staggeringly vulnerable to even the tiniest oil price fluctuations and adding an economic imperative to renewable energy adoption.
Mason evaluated available renewable alternatives to diesel and concluded that solar was the most abundant, cost-effective and realistic resource to exploit.
“We can forget ocean currents for now,” he said, explaining that as the currents were wind driven and therefore seasonal, marine current generators would only generate significant electricity for half the year.
Ocean thermal was “very exciting”, Mason observed, although he noted that Soneva Fushi bore the scars of a failed ocean thermal project: “I suggest we wait for someone else to pioneer this,” he said.
Biomass generation “fits us rather well”, as even if the most expensive form of biomass was imported from Canada it would represent 50-66 percent the current cost of diesel.
“It is cheap but can only be used at scale, such as Male’ and possibly Addu,” he said.
Wind and solar
That left wind and solar, the potential for which was “fascinating”.
The challenge with wind, however, was that it was inconsistent, and there were large periods of the year with little resource available.
“What do you do in the eight months without enough wind?” Mason asked, displaying wind data collected in the country’s north.
“What you do is put up solar. In that case, why bother to put up wind at all? With solar the sun rises every day – it is wonderfully predictable.”
The trick was going to be to transform solar from a green, niche, “subsidy hungry creature, to something so obvious that the current government of the time sees it as a sensible and intelligent thing to do. The reality is that it is easy to get to 30-40% emission reduction, but getting beyond first stage to the 80-90 percent that has been proposed by cabinet will be more difficult.”
Mason collected data concerning the cost of generating electricity using diesel at 100 of the country’s inhabited islands, “as I felt there was not enough data available”, and found staggering levels of inefficiency.
The numbers, he said, “are really scary. At best it costs 28-29 cents to produce a kilowatt hour, but at the top right of the graph it is costing 77 cents per kilowatt hour. Anything beyond 28-29 cents for a big island and 32-33 cents for a small island is just money being burned.”
The Maldives could quickly and easily save US$0.5-1 million dollars a month “simply by fixing power stations by doing boring, sensible stuff.”
“Diesel engines are designed to work at their rated power – they like going flat out. The moment you back off by half, you end up with a less efficient engine. Many islands have power stations with engines out of proportion to the size of the island’s energy needs – in some cases they are running at 15-25 percent capacity. That is a real cost we have.”
Mason then displayed a graph detailing the cost of providing solar, and observed that the cost plummeted quickly when it came to providing 30-40 percent of the country’s energy needs but sharply increased thereafter to a point where it was less competitive.
The challenge, he explained, was storage – how to retain electricity to operate devices such as lights, fridges and air-conditioners at night.
“Energy storage is the big hole in our story here. The key for me is to reach that 80 percent goal without the [cost] graph rising beyond where it is today,” Mason explained.
Using data detailing the energy use patterns of the island of Maalhos in Baa Atoll, Mason observed a high variability in power demand. Introducing solar without storage – “from panel to fridge” – would complicate that by requiring more flexibility from the existing power plant.
Energy Advisor Mike Mason
“Stick a solar panel on [Maalhos] and you can generate 29kw at midday with zero demand [on the powerplant]. But the maximum you need from the powerplant [without solar] is 42kw. This is a fundamental problem – the more solar you get, the more we have to get the power stations right.”
The cost of providing solar electricity straight from the panel was far below the cost of using diesel on any island, including Male’. On Maalhos, by pointing the solar panel in the same direction all day, “you can meet midday demand easily. But between 6-11 am in the morning, and after 2pm in the afternoon, you still need to meet the cooling load of fridges and air-conditioners.”
Mason had two suggestions – the first was to use (more expensive) tracking solar panels that would follow the sun and extend the daytime period in which demand could be met using solar. This would also generate the maximum yield from each panel, mitigating another problem – space.
“The challenge will be getting tracking to work in a hot, humid, salty environment,” he acknowledged, particularly if the panels were mounted in shallow lagoons.
The cost of providing electricity from solar in conjunction with current commercially available battery technology was not much different from existing diesel arrangements on many islands, Mason observed. “You lose 20 percent of the electricity putting it in and taking it back out, and it is expensive to fix. It’s not good enough.”
However on Maalhos, Mason noted, 28 percent of the electricity demand was for cooling.
“I had a think about storage. We could use really cold water refrigerated during the day, and use that to drive air-conditioning and fridges at night. This applies as much to resorts as it does home islands.”
This innovation would drop the cost to the level of the country’s most efficient diesel generators, Mason explained. For those powerplants currently running at 77 cents a kilowatt, “this is an opportunity to print money – and there aren’t many of those available to the government.”
Challenges
The major problem was obtaining the capital, Mason said, estimating that such an overhaul for the nation would cost US$2-3 billion, “although half of that would come from the tourist industry.”
“With renewable energy, on day 1 you buy 25 years of electricity. It might be cheap, but you still need enough cash on day 1.”
Attracting the investment in a country such as France or Germany would be “a no brainer”, Mason said, however because of the Maldives turbulent political history and fiscal deficit, it had a very weak credit rating.
“There is a shortage of knowledge and skills as well,” he said. “We need an energy technology support unit, and an energy finance corporation that can for this project provide guarantees and get countries to underwrite us. We do not want to be reliant by subsidies.”
In response to a question regarding the planned Gaafaru wind farm, Mason acknowledged the build, own and operate agreement STELCO had signed with Chinese wind turbine manufacturer XEMC to develop a 50mw wind farm at Gaafaru was a potential commercial pressure for adopting solar.
Under this agreement, a backup liquefied natural gas (LNG) plant would also be built, capable of providing up to 30 megawatts on windless days, or when there is not enough wind to meet demand.
Minivan News raised concerns in an article published in April 2010 that according to figures published in a 2003 report by the US National Renewable Energy Laboratory (NREL), North Malé Atoll had an annual average wind speed of 4.9 m/s (17.7 km/h), while a 2005 report by the American Wind Energy Association (AWEA) described the minimum average wind speed needed to run a utility-scale wind power plants as 6 m/s (21.6 km/h).
Mason described the contract as crafted with “more enthusiasm than technical involvement”, and noted that an LNG plant put out 92 percent of the emissions of a diesel plant “of the kind that STELCO already run very well.”
“A single cycle gas turbine of the kind described is very efficient but does not have the flexibility [required]. There is a technical challenge. We need to think about how we integrate things before we sublet the parts, so my instinct is that the contract will not be enacted in form presented.”
Speaking of the solar plan, now backed at least by data if not the finance, a senior government official remarked that the plan to turn to solar was “no longer froth. There’s a shot of espresso in the cappuccino now.”
The Maldives has meanwhile become the first country to crowdsource its renewable energy plan on the internet.
Forum topics in the comprehensive crowdsourcing project include solar and wind technology, energy storage, system control and demand management, novel technologies (including marine current and ocean thermal), biomass power generation, and finance.
Under each topic the Maldives appeals for expert assistance on several technical questions, around issues such as the use of solar panels in corrosive environments, the economics of tracking or fixed solar panel systems, and the viability of low velocity wind turbines.
The Fishermen’s Union has rejected Male’ City Council’s proposal to privatise the fish market on the grounds that the change would eliminate competition and complicate boat routines.
“We have to keep our system,” said union chairman Ibrahim Umar. “Privatising will make the operation too big.”
Umar said that 50 vessels currently come to Male’ each day to deliver fish, and that space is tight. Under the proposed plan, said Umar, fishermen would have fewer responsibilities in Male’s fish market but would be expected to make more frequent trips in and out of Male’s harbor.
“There isn’t room for that kind of traffic in the harbor. And there isn’t storage capacity for the extra fish that would be coming in,” said Umar.
According to Umar, the fish market currently enjoys a healthy level of competition.
“Every day the fishing is good, there is enough money, and there is even demand from other atolls for fish from Male’. Privatising the fish market will kill the competition because fishermen will have to sell at the same private rate. Bringing in more fish will also keep the price down, and there’s nowhere to keep it on Male’. We need to run this through the union,” he said.
Male’ Mayor ‘Maizan’ Ali ‘Alibe’ Manik said the plan to privatise is an effort to comply with World Health Organisation (WHO) standards, Haveeru reports.
“When we hand over the fish market for management, the fishermen will just have to bring the fish to the market and hand it over to those in charge of management. That way it saves the fishermen time, allowing them to set off fishing faster,” he said.
For Umar, the advantages were unclear.
“How will fishermen get paid? It will take longer if they aren’t selling the fish themselves,” he observed.
Addressing the issue of facilities, however, Umar said that an earlier proposal to build a fish harbour in Hulhumale’ was being revisited by the Ministry of Fisheries and Agriculture, the Ministry of Transport and Hulhumale’ Development Corporation (HDC).
In 2009, plans to build a fish harbour on Hulhumale’ were sent to the National Planning Council. The harbour was intended to expand and expedite the fishing industry, and reduce the pressure on Male’s market.
When the National Planning Council rejected the plan, however, Umar said there was a breakdown in communication and trust. “They weren’t talking to us, I found out through the Fisheries Minister that they had rejected the plan. There was no communication with [the union] about the plan or the finances.”
Umar said the union was told there was a lack of funds, but claimed that the International Fund for Agricultural Development (IFAD) had set aside money for the harbour. “I don’t know what happened with that money, we never got an explanation.”
In 2006, IFAD approved a post-tsunami recovery program in agriculture and fisheries. IFAD currently classifies the program as ‘ongoing’.
Minister of Fisheries and Agriculture, Ibrahim Didi, said the earlier financial problems have been resolved and the ministry is currently working with HDC to construct a fish harbour.
Didi said expanding work space is integral to privatising the fish market, which is growing.
“There’s already plenty of demand for the fish,” said Didi. “Privatising it would bring significant benefits to fishermen. They will have more access to the harbors, necessities such as ice will arrive on time, and things will happen more quickly.”
Didi said development of Hulhumale’s fish harbour has priority, and plans for other fish harbours will be considered accordingly.
According to Didi, President Mohamed Nasheed’s plan will distribute fishing components such as ice, oil and parts to different interested parties. Didi said the approach would improve facilities.
“If the different components of the fishing industry are spread out among interested parties working with a commercial interest, then business will move very fast because there will be a real business interest.”
The City Council earlier told Haveeru that the goal of privatising the market was to improve selling procedures, not to increase profits. Representatives said the union’s response would affect planning.
Council representatives and officials familiar with the proposal had not responded to inquiries at time of press.
The government expects the fiscal deficit to have fallen to a single digit at the end of the year, below the previous forecast of 11 percent of GDP, President Mohamed Nasheed said in his weekly radio address on Friday.
“The budget deficit as a percentage of GDP or national productivity has been estimated for next year at [budget] meetings with ministers and heads of government offices,” he said. “From that estimate we know that government expenditure has been substantially reduced in a number of different areas. For this year, we forecast a budget deficit of 11 percent. We have noted now that it has been reduced by three or four points.”
The government hoped that the fiscal deficit would be below 10 or “a single digit figure” when it is calculated at the end of the year, he said.
The budget deficit, which stood at just 1.9 percent of the economy in 2004, expanded to 7.3 percent in 2006 and ballooned to 23.9 percent in 2007, according to the International Monetary Fund (IMF).
The fiscal deficit exploded on the back of a 400 percent increase in the government’s wage bill between 2004 and 2009, with tremendous growth between 2007 and 2009. On paper, the government increased average salaries from Rf3000 to Rf11,000 and boosted the size of the civil service from 24,000 to 32,000 people – 11 percent of the total population of the country – doubling government spending from 35 percent of GDP to 60 percent from 2004 to 2006.
While preliminary figures had pegged the 2010 fiscal deficit at 17.75 percent, “financing information points to a deficit of around 20-21 percent of GDP”, down from 29 percent in 2009, the IMF noted in March this year.
“We see bringing the fiscal deficit down as the key macroeconomic priority for the Maldives,” the IMF’s Mission Chief to the Maldives, Rodrigo Cubero, told Minivan News at the time. “A large fiscal deficit pushes up interest rates, thereby undermining private investment and growth, and also drives up imports, putting pressure on the exchange rate and inflation, all of which hurts the Maldivian people, particularly the poor.”
“Further efforts are still needed to reduce the fiscal deficit. Those efforts should comprise further tax reforms as well as measures to reduce expenditure and to improve the channelling of social expenditures to the needy.”
Meanwhile in a booklet issued to media titled “the DRP’s response to the government’s economic nuisance package,” the main opposition Dhivehi Rayyithunge Party (DRP) strongly objected to a bill on fiscal responsibility currently before parliament.
The DRP also noted that provisions on imposing limits to government spending would only come into force after 2013.
“In the past three years, the MDP [Maldivian Democratic Party] government earned billions of rufiya by selling off state assets, facilitating business opportunities for their friends and introducing new taxes,” the DRP said. “Nonetheless, while the health sector, the education and overall standard of living has gone from bad to worse, it is unclear how the government spent the billions and billions of rufiya it received.”
President Nasheed signed the accord on behalf of the Maldives at a meeting with Nathalie Kosciusko-Morizet, the French Minister of Ecology, Sustainable Development, Transport and Housing.
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