Month: August 2011

DhiTV loses court battle for terrestrial broadcasting license

The Civil Court has ruled that the agreement made between the government and Broadcasting Maldives Pvt Ltd, the company that runs DhiTV – mentions only cable and satellite broadcasting and nothing about terrestrial broadcasting frequency.

The company had gone to court claiming the government was obligated to give them a terrestrial broadcasting frequency. DhiTV, an opposition-aligned network, currently broadcasts over cable and satellite.

Ruling on the case, Judge Maryam Nihayath said that cable, satellite and terrestrial broadcasting were three different types of broadcasting and the granting of permission for cable and satellite broadcasting did not mean that terrestrial broadcasting had to be permitted as well.

Nihayath also said the agreement made between the government and Broadcasting Maldives Pvt Ltd did not indicate that the company had been granted permission for terrestrial broadcasting, and that the rights mentioned in the agreement concerned only satellite and cable broadcasting.

Broadcasting Maldives Pvt Ltd claimed that the company needed terrestrial broadcasting permission to make the best use of the license issued by the government, and requested that the court order the state to grant permission for terrestrial broadcasting.

Concluding the verdict, Judge Nihayath said there were no grounds for the government to issue a terrestrial broadcasting frequency to Broadcasting Maldives Pvt Ltd.

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MDP donates Rf100,000 to Saamiliyya fire victims

The ruling Maldivian Democratic Party (MDP) has donated Rf100,000 (US$6,485) to assist victims of a fire incident in Galolhu Saamiliyya in May this year that left its residents homeless.

The donation was handed over to the displaced families at a special ceremony at the MDP main office.

According to the party’s website, five families and one individual were living in the house in the capital Male’ when the fire broke out.

A total of Rf112,465 was raised and distributed to the victims of the fire incident.

After the incident on May 26, both the landlord and his tenants were left homeless and were temporarily relocated to the Social Centre, a building mostly used for sporting purposes and other recreational activities.

Male’ City Council told local media at the time that the council would provide all assistance possible to those affected by the fire, including financial assistance.

The Maldives National Defence Force (MNDF) meanwhile provided the homeless victims with blankets, mattresses and other necessities to make the place adequate for a temporary shelter.

Although the list of homeless people initially had 39 names on it, it was later revised, Major Abdul Raheem told Minivan News at the time.

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Resolution calling for investigation into alleged US$800 million illegal oil trade sent to committee

A resolution proposed by MP Mohamed Musthafa calling for an official investigation into an alleged US$800 million worth of illegal oil trade involving former President Maumoon Abdul Gayoom and MP Abdulla Yameen was sent to committee today.

The resolution was approved 52-11 and sent to the national security committee for further review.

In his closing statement, MP Musthafa of the ruling Maldivian Democratic Party (MDP) said that MP Yameen’s conceding during the debate last month that US$800 million worth of trade in oil did take place had “fulfilled the main purpose of my resolution.”

MP Yameen, who was chairman of the State Trading Organisation (STO) and long-serving Trade Minister under the previous government, however contended that the sale of oil to Burma was not illegal.

“This was done by forming a company in a country where such matters are most closely monitored,” he said. “That company is audited by STO auditors. An illegal business would not be allowed to operate in Singapore. This was not a secret trade.”

Musthafa however argued that Burma was under UN embargo at the time and “no ship registered at the International Maritime Organisation (IMO) could unload cargo at a [Burmese] port.”

As the Maldives was a member of IMO, said Musthafa, trading by sea with Burma would have been a violation of the organisation’s laws.

Musthafa added that the US Treasury Department had labelled one of the Burmese officials involved in the oil trade with STO as “the godfather of heroin.”

“The port of discharge is stated as Maldives,” he continued. “The goods are loaded at Singapore for Maldives, but at sea the ship is diverted to the Burma port.”

Musthafa alleged that there was “serious shipping fraud” involved in the trade.

“The ship owner wants the cargo and he’s told that he’ll have it only when he agrees to a clause in the agreement,” he explained. “The boat operator will say yes because he wants the cargo. The chart agreement states he would have to help ‘a sweet bill of lading.'”

Over 30 shipments went to Burma in 2004 alone, Musthafa claimed, adding that UN reports suggested that US$80 million worth of illegal oil trade at sea occurred daily, involving “corrupt government officials.”

Musthafa challenged Yameen to present 12 kinds of documents to the government to prove his innocence, including shipping documents, bank documents such as LCs (line of credit), board of resolution for forming MOCOM, documents of business transactions, tax receipts to the Singaporean government, purchase and sale contracts, bills of exchange submitted to the banks, account statements and logbooks, cargo manifests and bills of lading of the ships.

Musthafa suggested contacting the United Overseas Bank and Standard Chartered Bank to obtain the documents and seeking Interpol assistance for the investigation.

The Presidential Commission did not have the capacity to investigate fraud on such a scale, he said.

Abdulla Haseen, spokesperson of the commission, told local media last week that evidence gathered so far “suggest links between the trade and convicts serving prison sentences.”

Haseen claimed that attempts were being made to obstruct the investigation in the Maldives, “but given that investigations are being conducted abroad there is little chance for obstruction and thus we’re making progress.”

The commission was being assisted by forensic accountancy firm Grant Thornton, British law firm Lawrence Graham LLP, a Singaporean law firm and several other international organisations, he said.

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Chinese firm to take over Gaafaru wind farm project following collapse of GE/Falcon Energy deal

Chinese electrical manufacturing firm XEMC will take over the development of the government’s flagship renewable energy project, the Gaafaru wind farm, following the behind-the-scenes collapse of the US$200 million dollar agreement between GE and Falcon Energy late last year.

Under the new agreement between XEMC and the State Electric Company (STELCO), XEMC will install turbines capable of generating 50 megawatts and submarine cables servicing the greater Male’ area, under a build, own and operate arrangement.

A backup liquefied natural gas (LNG) plant will also be built, capable of providing up to 30 megawatts on windless days, or when there is not enough wind to meet demand. The wind farm will provide up to 20 megawatts to STELCO’s grid, supplementing its current install capacity of 38.76 megawatts.

STELCO’s Managing Director Dr Mohamed Zaid told Minivan News that under the 25 year agreement the new facility will be owned by XEMC and the electricity bought by STELCO, with construction of the wind turbines starting within three months.

XEMC was selected through an open tender, Dr Zaid said, adding that STELCO had not signed a private partnership agreement with GE/Falcon.

“Initially we did not limit this project to a specific renewable energy source, but the XMEC group recommended using wind turbines given their experience with the technology,” Dr Zaid said, during the signing event held recently at the President’s Office.

He said was unable to provide reasons for the collapse of the GE/Falcon Energy deal “at this time”, and the circumstances around it remain unknown.

Minivan News was told that the reasons included a lack of consensus between the parties involved, and whether they had the requisite experience: “Falcon didn’t work out,” said one informed source, while “a lot of things were not carried out according to the memorandum of understanding,” said another. Local newspaper Haveeru meanwhile reported that there were concerns about pricing and profitability of the enterprise.

The original much-publicised project was to be central to the government’s ambition for the country to become carbon neutral by 2020, and promised a 75 megawatt wind farm in North Malé Atoll that was to produce enough clean energy to allow Malé, Hulhulé and a number of resorts to “switch off their existing diesel power generators”, according to the President’s Office at the time. Excess electricity on windy days was to be diverted to a desalination plant located on Hulhumale’.

The project was, according to President Mohamed Nasheed during its launch, intended to “reduce fuel imports into the country by 25 percent and cut carbon emissions by 40 percent.”

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).

That report stated that because “power available in the wind is proportional to the cube of its speed… doubling the wind speed increases the available power by a factor of eight.”

For example, a turbine operating at a site with an average of 20 km/h should produce 33 percent more electricity than a site operating at 19 km/h, because the cube of 20 is larger than the cube of 19.

This means that a difference of just 1 km/h in wind speed could significantly bring down productivity of the wind farm.

The Falcon/GE project’s local lead, Umar Manik, told Minivan News at the time that due to engineering advances the Gaafaru wind farm was expected to run on a minimum wind speed of 5.7 m/s.

However at time of signing the MoU, Falcon had still to raise the required investment with international banks, which by the time of Minivan News’ 2010 article had almost doubled to US$370 million from the original estimate of US$200 million.

“International banks are very keen to invest in the Maldives,” Manik told Minivan News at the time, “but they need eighteen months of wind surveys. They are becoming partners, they don’t want to lose their money.”

The turbines were to be planted once six months of data had been gathered, “to give us full confidence,” according to Manik.

While data was to be gathered by a 150-foot tall wind mast installed in the area, a LNG backup generator with a capacity of 50 megawatts was to be constructed with a supply contract reportedly signed with a Saudi Arabian firm. The deal was quietly terminated in late 2010.

Minivan News was unable to establish the credentials of Falcon Energy, which no longer appears to have a web presence. The Singapore-listed Falcon Energy Group, a major offshore oil and gas player that was widely presumed by the international energy media to be the party involved in the Gaafaru project, denied any knowledge of its existence when contacted by Minivan News last week. GE meanwhile failed to respond to enquiries.

Falcon Energy was introduced in the President Office’s original release as having commissioned “onshore and offshore wind farms totalling 1,500 MW over the past 10 years, in the UK, Spain, Portugal, Ireland and Canada.”

Interviewing Manik last April, Minivan was led to understand that Falcon Energy Group was based in the UK and represented a consortium of four companies – two from the UK, including Falcon Energy, one from Holland and another from Saudi Arabia.

The government’s Isles project website states that when the MoU signed with Falcon Energy was terminated a decision was made to proceed with a new group identified as ‘STAR Renewables Consortium’, a joint venture represented by the Saudi Trading and Resources Company. However an MoU was never signed as STELCO elected to proceed with an open tender – a process that led to the current deal with XEMC.

Minivan News understands that at least two years of wind data needs to be collected before the Gaafaru venture can proceed – data that should be available by the end of the year.

“The only wind speed data currently available is not good enough for a commercial venture,” an informed source told Minivan News. “That will determine what sort of turbines are needed – some are better at low wind speeds.”

LNG was selected as a backup option due to the ability to rapidly power it on and off as demand necessitated, however “at some point we will want to switch off the gas.”

Minivan News understands that the intention is to ultimately power Male’ and its surrounding islands with a mixture of wind, gas and marine current generation, with potential for the latter presently being determined by a £48,000 (US$76,000) study led by Scotland’s Robert Gordon University and due to report this year.

Foreign investment in such projects is subsequently to be coordinated by the government’s new office of Renewable Energy Investment, operating under the Ministry of Economic Development.

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PA MP announces decision to leave party following coalition split

MP of the opposition-aligned People’s Alliance (PA) Ahmed Rasheed has announced on MNBC his decision to leave the party “to better serve the public as an independent.”

Rasheed, who spoke to the state broadcaster on Sunday, also said he was open to joining other parties “if it was within the public interest.”

The PA’s acting Secretary General Ahmed Musthafa however told Minivan News today that he was unable to confirm whether Rasheed had left the party: “We don’t believe he has moved. I saw him yesterday,” he said, adding that the party would issue a formal communication on the matter in the next few days.

“Maybe he has been pressured by another party such as the MDP to join, although I don’t think he will,” Musthafa said.

Once Rasheed officially informs parliament of his new status as an independent, his departure from the PA could force the committee composition to be revisited for a third time this session.

While the PA would be entitled to fewer seats, parliamentary rules dictate that Rasheed must be given a seat on at least one committee as an Independent.

MP Ahmed Rasheed represents the constituency of Isdhoo in Laamu Atoll, an area of strong opposition support that voted largely for PA candidates under its former coalition agreement with the Dhivehi Rayithunge Party (DRP).

The PA decided decided on July 13 to break the longstanding coalition agreement, after internal strife within the DRP saw the party split into factions loyal to its leader Ahmed Thasmeen Ali or the party’s ‘honorary leader’, former President Maumoon Abdul Gayoom.

Eleven of the DRP’s MPs met with other opposition parties, including the Jumhoree Party (JP), the Dhivehi Qaumee Party (DQP) and an independent MP to discuss the creation of a new voting bloc, one which could see the DRP’s majority control of parliament reduced to 13-15 MPs.

DRP MP Abdulla Mausoom raised concern following the split that the PA’s decision to break the coalition agreement would upset constituents in Laamu Atoll who “are very loyal to the DRP but voted for the PA tag.”

Z-DRP MP Ahmed Mahlouf responded that such islands “voted for the PA because President Gayoom asked them to do it. Even now Zaeem (Gayoom) is with the PA, they are working together. Voters in Laamu didn’t vote for Thasmeen – they voted for Gayoom.”

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Specially-trained officers patrolling the streets during Ramadan to reduce crime

Police Chief Inspector Ahmed Abdul Rahman has announced that specially trained police officers will be patrolling the streets of Male’ during Ramadan, in a bid to counteract a spike in crime observed during the Holy month.

Speaking to the press, Rahman said that every year during Ramadan assault and robbery cases have been observed to increase than compared to other months of the year.

Police have noted that thieves become more active between sunset and sunrise, with records showing that most of the theft and robbery cases have occurred during this time.

The specially-trained police officers will patrol the streets and keep an eye on crime hotspots, he said.

He called on everyone to be more cautious during the month of Ramadan and to upgrade the security of offices and homes.

President Mohamed Nasheed last week announced that almost 400 convicted criminals will be released from prison to offer them a second chance to enter society as a reformed person.

Although the public has raised concern over the issue of  impending release of close to 400 convicted criminals, Press Secretary for the President Mohamed Zuhair has said it will not result in a spike in crime rates in Male’.

““Out of the 119 people released on a previous occasion only two people have had to be taken back to prison for committing an offence,” Zuhair said.

He added that the inmates will be released on the understanding that they would be returned to prison to complete the rest of their sentences if they committed any sort of offence in the next three years.

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Government inviting foreigners to usurp Maldivian businesses, claims MP Muttalib

A business registration bill proposed by the government as part of its economic reform package is “a deceptive ploy” to “open up the country to foreigners”, warns MP Ibrahim Muttalib.

During today’s parliamentary debate, the Jumhooree Party (JP) MP argued that provisions in the legislation allowing foreign businesses to establish branches in the Maldives and requiring at least US$1 million as capital “proves that this bill was drafted to allow foreigners to easily do business in the Maldives.”

“Under this law, a person with US$1 million would be able to easily register a business in this country,” he explained. “Considering the state of the Maldivian people, there won’t be any businessman who has US$1 million at hand. [Foreign businesses] will be able to conduct wholesale business and sell day-to-day necessities.”

Muttalib added that local businesses that trade in footwear and garments “would not have US$1 million, except for a very few people.”

He urged MPs to consider the consequence of foreign businesses entering the footwear, garment and wholesale industry: “What is being done today is part of a neighbouring country’s efforts to open up this country for its citizens,” he said.

“The Indian government proposed opening up the service industry, tourism, travel agencies, construction, health industry, social security, financial industry, maritime travel, air travel and airplane repair under a SAFTA [South Asian Free Trade Association] agreement,” he claimed. “But because all our local industries opposed it the government has decided to do it under a law.”

While the bill specified businesses that could not be conducted by expatriates – such as fisheries, agriculture and selling commodities out of a private residence – all other kinds of businesses were “opened to foreigners” under the proposed law.

“Honourable Speaker, I do not want to live in this country as a third-class citizen,” he said.

Foreign businesses understood that a relatively small amount of capital was enough to “easily bribe officials” and secure investments such as uninhabited islands, Muttalib claimed.

According to the draft legislation, the purpose of the bill is to ensure that businesses, partnerships and cooperative societies operating in the Maldives are registered; specify what kind of businesses must be registered along with procedures for registration; and oblige businesses to submit information to the Registrar of Businesses.

MP Abdulla Mausoom of the Dhivehi Rayyithunge Party (DRP) meanwhile expressed concern that allowing foreign businesses to establish branches in the Maldives could pose challenges to local industries.

Mausoom argued that the US$1 million stipulated as a minimum capital investment for foreign businesses was too low: “All around us, whether it’s India, Celyon [Sri Lanka], Singapore, Malaysia or Africa, are looking at the Maldives; [because] their countries are saturated they are ready to do business in Maldives.

“If we open up too easily like this, [foreign] businesses will pose serious challenges to our small businesses,” he said, suggesting more restrictions to protect local industries.

MP “Reeko” Moosa Manik, acting chairperson of the ruling Maldivian Democratic Party (MDP), noted that there were numerous unregistered businesses operating in the Maldives by foreign parties.

“In the woods in some islands, especially [Laamu Atoll], there’s even an immigration department,” he said, adding that he has learned of work visas approved for ten people under the name of one person. “There’s no particular business done by these people, in sum they’re involved in all business.”

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BML records 40 percent increase in half-yearly profits

The Bank of Maldives (BML) has recorded a significant increase in operating profits of almost 40 percent in the first half of 2011, according to half-yearly results released yesterday.

Notably, the bank’s operating profits for the second quarter of 2011 were Rf 132,201,055 (US$8.57 million) in the second quarter of 2011 compared to Rf 79,872,266 (US$5.17 million) for the same period in 2010.

BML said in a statement that the total profits would be allocated to cover loan loss provisions in the second quarter of 2011. The bank will also not issue dividends to shareholders this year.

The bank also announced the launch of a business transformation programme that will see it evolve into a financial services institution “with a stronger focus on customers and service provision”.

International human resource consultancy firm Hunter Roberts, which has worked with major UK banks including Barclays, had been appointed to develop effective employee policies and provide staff development, BML said.

Speaking to Minivan News in April following his appointment, BML’s new CEO Peter Horton identified service provision as a particular area of improvement for the bank.

“I think this business grew very rapidly, not just the loan base but in terms of customers, especially if you look at what BML was 10 years ago,” he said at the time.

“That goes some way to explaining why we have such big queues in the banking hall. When I came out for my interview I took the time to walk around Male’ several times – and go in very incognito to see the BML branch. I have to experience what the customer experiences, and I don’t think that experience is what any of us want.”

Horton spent 15 years with Barclays in the UK before moving to Africa to run the bank’s corporate turnaround teams, where he became experienced in dealing with distressed portfolios and problem lending. Speaking to Minivan News in April, he identified BML’s high non-performing loan problem as a key impediment to the bank’s performance, noting that it not only had a carrying cost “but it also creates a certain mood around the business internally and externally.”

Horton also worked in the offshore finance field with a subsidiary of the Canadian Imperial Bank of Commerce in the Bahamas, and has championed the potential for the Maldives to develop an offshore finance sector.

“If you look at the world’s emerging economies, which are moving West to East, our proximity to India and to a lesser extent Sri Lanka, and with direct flights to most South-East Asian cities, should be a huge advantage for us,” he told Minivan News.

“The majority of offshore banking centres do rely on imported people and institutions. They are truly migratory these days. We are in a global economy now where things move overnight, so if you were able to do the things to attract people, it is very, very doable.

“The other thing is having sufficient protection around the business – having a strong regulator, a strong legal system, and probably some degree of monetary protection. If a private bank is bringing dollars into the country, there needs to be some degree of certainty that the dollars can sit in the country quite safely,” he said.

The Maldives Inland Revenue Authority (MIRA) has meanwhile announced a 13 percent increase in bank profit taxes collected in 2010 revenue. The country’s six banks paid Rf 226 million (US$14.65 million) in taxes, it said.

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