Month: June 2014

How will guest house islands benefit the community?

With the unveiling of the first guest house island plan this week, industry experts have questioned whether the government’s new guest house tourism policy will benefit the local communities in the same was as past approaches.

“The guest house is a policy – a development implement,” said former Minister for Economic Development Mahmud Razee.

“It should be an equitable thing – if it is purely a tourism policy that is only on a selected island, then we are moving away from the fundamental issue of enabling all Maldivians to benefit from tourism.”

The model’s first project – the Thumburi ‘Integrated Resort Development’ scheme – was launched on Monday night (June 23), being branded as a way to “responsibly diversify the tourism product of the Maldives”.

Recent guest house development – reintroduced by the Maldivian Democratic Party after a decades-long hiatus – was intended to open up the billion dollar tourism market to small and medium sized businesses.

While the placement of guest houses on local island was also intended to stimulate the local economies, concern was expressed by religious groups regarding the impact on local communities.

President Yameen’s guest house island policy – included in his election manifesto – instead plans to recreate the more traditional resort concept, with the participation of multiple smaller entrepreneurs.

“Once again today we are looking to diversify tourism, to shape it in a different way. It does not mean moving away from the existing concept of having one resort on one island,” said Yameen at Monday’s launch.

Yameen also revealed that future developments would take place within proposed special economic zones, which will cede local authority to incoming foreign investors as part of  a system of incentives agreed upon at the government’s discretion.

‘A new concept for a world class brand’

Describing the project as “a new concept for a world class brand”, the Thumburi brochure reveals plans for several beach hotels with rooms ranging from US$100-200 – far less than that currently charged by the country’s budget resorts.

The development of the project will be overseen by the government’s marketing corporation, the MMPRC – who unable to respond to further queries at the time of press.

Tourism Minister Ahmed Adeeb has previously told Minivan News that, while his government would continue to support individual guest houses, there was a reluctance to promote them for fear of damaging the country’s brand as a luxury tourism destination.

“The thing is, from a marketing perspective, we have positioned the Maldives as a high-end destination,” explained Adeeb.

“A-category guests will continue coming for as long as we market the country as an A-category destination. Guests for B,C,D and E categories are something we automatically get.”

General Manager of Sales and Marketing at Triple A resorts Willem Fokkenrood, however, disagrees with this assessment, suggesting that this type of exclusive approach is outdated.

“Does guest house and B&Bs damage Hawaii’s image? No, it just puts more money into the pot.”

Fokkenrood also suggested that placement of the of the guest house concept on single islands would “defeat the purpose” of the model.

“People want to have guesthouses so the local people can reap the benefit from it. If you open a guest house island, what benefit are you talking about?” he asked.

“Because you get to stay with the local population, it’s a draw for a lot of people to say ‘I have stayed in the real Maldives’.”

Fokkenrood felt the key difference between the new concept and the traditional guest house model would be the addition of pork and alcohol products – illegal on the Maldives’ inhabited islands – to the mid-market sector.

“That would change the game, then it becomes a direct competitor to these established resorts,” he said.

Razee, however, felt that the policy may represent an attempt to reassure current industry leaders – described as oligarchs in a recent UNDP report – that the mid range market would progress in a “more controlled fashion”.

Minivan News was unable to obtain further comment from the Tourism Ministry on this subject.

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Swell waves flood Thimarafushi airport runway

The Thaa Atoll Thimarafushi Airport runway has been hit by high swell waves.

According to Thimarafushi Council President Hussein Shareef, waves flooded approximately 150- 250 foot along the runway and covered it with waste.

The airport fence was also destroyed, he said.

Only one flight was scheduled out of Thimarafushi today. The flight departed at 9:40 am before the waves hit.

According to Channel News Maldives (CNM), part of Rathafandhoo Island in southern Gaaf Dhall atoll also was also flooded with swell waves this morning.

Islanders told CNM that water had come up to one feet in some areas and an area measuring 700 foot on the north eastern side of the island.

Several islands in the Maldives have reported flooding from swell or udha waves since the onset of the wet season in June.

Udha is a common phenomenon in the Maldives, particularly during the south-west monsoon, and is often associated with changes in ‘Nakaiy’ – the fortnightly intervals of the Maldives’ unique weather calendar.

A local environmentalist familiar with the Nakaiy system said Udha waves are connected to the moon, gravity, and changes in winds and said it is a completely normal natural phenomenon but that it could harm islands which are already eroding.

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Criminal Court detains two individuals caught with MVR0.9 million drug haul for five days

The Criminal Court on Tuesday extended pre-trial detention of two individuals caught with MVR900,000 (US$58,366) worth of illicit drugs to five days.

The Drug Enforcement Department (DED) caught the two individuals on arrival from the airport to Malé Monday. They are Maldivian nationals aged 48 and 31 years.

The police believe the drugs were trafficked via air.

According to the police, the 31-year-old was accused of stealing money and documents from fifth floor apartment on Malé’s Dhafeena Building in December 2011.

On Tuesday, the DED also searched both of their residences and found documents related to the drug haul.

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Chinese companies express interest in Hulhumalé – Malé bridge

Three Chinese companies have submitted detailed expressions of interest in building a bridge between capital Malé and surburb Hulhumalé, Economic Development Minister Mohamed Saeed has said.

They are Dongfeng, China Machinery and Engineering Corporation (CMEC), and Beijing Urban Construction Group (BUCG), he said.

Although 19 parties from 8 countries had expressed interest following an investment forum in Singapore, only three submitted detailed expressions of interest.

Speaking to the press on Tuesday, Saeed also said the documents will be evaluated in July and expressed hope work could commence in December this year.

President Abdulla Yameen is also seeking investment in four more infrastructure projects. They are development of Ibrahim Nasir International Airport (INIA), development of northern Ihavandhippolhu atoll, relocation of the Malé port to Thilafushi Island, and the development of a youth city on Hulhumalé.

Saeed said the government is in discussion with investors on the relocation of Malé port and the project will give the Maldives a competitive edge over other ports in the region.

Reclamation work for Hulhumalé Youth City will begin within weeks and revetments will be installed by December 2015, he said.

He further said a technical team has been set up at the President’s Office to facilitate investment in oil exploration.

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Police launch new information management system

The Maldives Police Services has launched a new information management system today.

Speaking at a ceremony held to inaugurate the Police Information Management System (PIMS), Commissioner of Police Hussein Waheed said the new system will facilitate investigations and introduces new services.

The system facilitates the handling and storing of information regarding investigations and evidence, and dramatically reduces paper costs at the office, he said.

The Police Management Board also held discussions on posting police officers on all inhabited islands on Tuesday.

According to a police statement, the board aims to increase or limit officers depending on the population and number of crimes. The size and amount of services available at police stations will also vary depending on these factors.

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Government seeks US$600 million from China and Japan for airport development

The government of Maldives is in talks with the Japan Bank for International Cooperation (JBIC) and China Exim Bank to secure a US$600 million for airport development.

Tourism Minister Ahmed Adeeb said the government is seeking US$200 million from JBIC and US$400 million from China’s Exim Bank to develop a terminal and runway respectively.

Sinagpore’s Changi Airport Group will be hired as consultants as they are better qualified to work with Chinese and Japanese contractors, he added.

The government is in the process of finalising an agreement with Changi, he said.

Speaking to the press on Tuesday, Adeeb said he does not expect a Singaporean tribunal’s ruling ordering the government to pay damages to former airport developer GMR Infrastructure for wrongful termination to affect the government’s new plans.

In abruptly terminating the contract, the government had chosen to protect the country’s multibillion-dollar tourism sector, Adeeb said. He claimed major airlines had threatened to cease operations in the Maldives following the GMR takeover – a move that may have led to collapse of tourism.

Compensation

Adeeb has dismissed opposition fears of an imminent sovereign debt crisis if forced to pay GMR’s initial claim of US$ 1.4 billion, repeatedly stating the government has the capacity to pay compensation.

“God willing, our airport will be developed. Our economy will grow with the special economic zone bill, and our government will become rich, we will overcome our budget deficit and god willing we will be able to pay any amount we have to,” he said.

Adeeb also said the arbitration tribunal had ruled out the US$1.4 billion claim as a large percentage of the claim is business opportunity losses.

The exact amount of compensation is to be set in a second phase of arbitration and will factor in concession fees and the amount GMR invested in INIA.

President Abdulla Yameen has previously predicted compensation to be approximately US$300 million, while former Attorney General Azima Shakoor in 2012 said the figure may be as high as US$700 million.

The World Bank in December said GMR’s compensation will place severe pressure on the country’s already “critically low” reserves.

As of April 2014, the Maldives’ gross foreign reserve stood at US$434.8 million, while total outstanding debt at the end of 2013 stood at US$793.6 million dollars.

GMR or tourism?

The concession agreement was “lopsided,” “biased” and negatively affected airline operations in the Maldives, Adeeb said.

“[I]t was either tourism or GMR contract. Only one of them would survive in the Maldives. Airlines were complaining, some airlines were moving out – as you know, for big airlines like Qatar, it is no big deal for them to stop operations here. For them, this is a very small market. If airlines stop operations, a country’s tourism will go bankrupt. We have seen the decline to tourism in Seychelles and Mauritius. We had to take action,” he said.

“IATA research shows seat capacity from Europe decreased from 2010 – 2012, and it was not affordable for charter airlines to fly to the Maldives. They were increasing fuel prices, by week, by month, for big scheduled airlines, without considering world prices, because they had a monopoly. Due to the agreement, there was nothing the government could do,” he added.

However, a 2013 Auditor General report presented a “mixed picture”, stating only Sri Lankan airlines definitively ceased refueling due to increased price of fuel.

Adeeb said he believed airport infrastructure are tourism investments, and pledged to integrate tourism and regional airport development.

“We want responsible investors, not just investors,” he said, adding that the government will sue former government officials who have caused losses to the government through lopsided business contracts.

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Majlis standing committees’ composition approved as parties reach compromise

A five-member select committee tasked with constituting parliament’s standing committees has finalised the composition of the 13 committees after political parties reached a compromise today.

Following weeks of disagreement, a proposal by opposition Maldivian Democratic Party (MDP) MP Ibrahim Shareef – seconded by MP Ahmed Amir from the government-aligned Maldives Development Alliance (MDA) – was passed with three votes in favour at the 12th meeting of the select committee.

In addition to Shareef and Amir, the select committee included MP Riyaz Rasheed as the chair from the ruling Progressive Party of Maldives (PPM), MP Gasim Ibrahim from the Jumhooree Party (JP), and MP Anara Naeem from the Adhaalath Party (AP).

JP Leader Gasim Ibrahim did not participate in the vote after objecting to a change in the number of seats in some committees.

The committee decided to increase the number of seats in the public accounts oversight committee to 13 and reduce the number of seats in the petition committee and ethics committee to 10.

A proposal by MDA MP Amir to constitute the ‘241’ security services committee with 14 seats was also approved with six seats for the PPM, three seats for the MDP, two seats for the JP, one seat each for the MDA and AP, and one seat for Independent MP Muaz Mohamed Rasheed.

Article 241 of the constitution states, “A committee of the People’s Majlis shall be established to exercise continuing oversight of the operations of the security services. The committee shall include representation from all the different political parties within the People’s Majlis.”

Aside from the 241 committee, Muaz – the sole remaining independent – was assigned to the ethics committee.

Reflecting the ruling coalition’s majority with its 46 MPs in the 85-member parliament, the PPM-MDA secured a voting majority on all standing committees with the exception of the privileges committee.

Parliamentary rules dictate proportional representation on the standing committees based on the number of MPs in each party.

Concluding the select committee meeting today, Chair Riyaz Rasheed said the committee’s report will be submitted to the Majlis floor, where it would be put to a vote.

The PPM MP for Thaa Vilifushi expressed gratitude to political parties for agreeing to compromise.

The protracted dispute over the allocation of seats on standing committees has left parliament deadlocked since the first regular sitting on June 2.

Two consecutive sittings had been called off amid disorder in the chamber after MDP MPs insisted that preliminary debate on bills could not begin in the absence of standing committees to review legislation.

Speaker Abdulla Maseeh Mohamed adjourned yesterday’s sitting to hold discussions with political party leaders.

At last week’s sitting, pro-government MPs had accused the opposition of obstructing the Majlis to thwart the government’s legislative agenda, while MDP MPs accused the ruling coalition of attempting to create “a one-party state” without parliamentary oversight.

Today’s sitting was meanwhile adjourned to allow the select committee to conclude its work. Speaker Maseeh has since announced that the next sitting will take place at 10:30am on Monday (June 30).

The first piece of legislation up for debate is the bill on establishing special economic zones, the centrepiece of the government’s legislative agenda.

Majlis composition:-

PPM – 41 MPs (48.2%)

MDP –  24 MPs (28.2%)

JP – 13 MPs (15.3%)

MDA – 5 MPs (5.9%)

AP – 1 MP (1.2%)

Independents – 1 MP (1.2%)

Standing committees:-

Public Accounts Committee – six seats for PPM, four seats for MDP, two seats for JP, and one seat for MDA.

Government Oversight Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for MDA.

Independent Institutions Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for MDA.

‘241’ Security Services Committee – six seats for PPM, three seats for MDP, two seats for JP,  one seat for MDA, one seat for AP, and one seat for the Independent MP.

National Security Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for MDA.

Social Affairs Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for AP.

Economic Affairs Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for MDA.

National Development Committee – five seats for PPM, three seats for MDP, one seat for JP, one seat for MDA, and one seat for AP.

Rules Committee – six seats for PPM, three seats for MDP, one seat for JP, and one seat for MDA.

Ethics Committee – five seats for PPM, three seats for MDP, one seat for JP, and one seat for the Independent MP.

Privileges Committee – six seats for PPM, three seats for MDP, and two seats for JP

Petition Committee – six seats for PPM, three seats for MDP, and one seat for JP

General Affairs Committee – five seats for PPM, three seats for MDP, two seats for JP, and one seat for MDA.

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Employment Tribunal spent MVR1.2 million in excess of approved budget

The Employment Tribunal spent MVR1.2 million (US$77,821) in excess of the parliament-approved budget in 2013, the institution’s audit report for 2013 made public today has revealed.

An annual budget of MVR5.7 million (US$369,649) for the tribunal had been approved by parliament.

“The overspent amount was facilitated by a budget extension of MVR1,251,429 made to the Tribunal by the Ministry of Finance and Treasury. However, it was observed that the parliamentary approval for this budget extension was not obtained as per clause 32(a) of the Public Finance Act,” the report stated.

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Police seize drugs with street value in excess of MVR900,000

Police have arrested two male suspects – aged 31 and 48 – with drugs worth over MVR900,000 (US$58,365) in street value.

According to police, the 31-year-old suspect had a criminal record for committing a robbery in 2011.  The pair were arrested on Monday (June 23) based on intelligence information suggesting their involvement in drug trafficking.

The drugs were found in their possession when the suspects were searched near the Hulhumalé ferry terminal upon their arrival in Male’ from the airport. Further evidence was discovered after police searched their residence with a court warrant.

The drugs are believed to have been smuggled through the airport.

The Criminal Court yesterday extended the remand detention of the suspects to five days.

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