Politics – Page 275 – Minivan News

Pressure growing in PPM to quit coalition government: MP Nihan

Pressure is growing in the Progressive Party of Maldives (PPM) for its council to decide whether to continue backing President Dr Mohamed Waheed’s government ahead of September’s presidential election, a party official told Minivan News.

PPM MP Ahmed Nihan said the party has grown increasingly concerned at what it believed were “deliberate” attempts by President Waheed to try and discredit the party and its members to boost his own election campaign.

Nihan said that once senior party officials returned from campaigning this week in Shaviyani Atoll, he expected the PPM council would need to hold discussions on whether to remain in the current coalition government.

The ‘forward with the nation’ coalition backing Waheed dismissed the notion of a split within the government before voting begins, claiming that all parties were expected to stick with the present administration until September’s vote.

However, Nihan said despite the dismissal of several high-profile PPM members from Waheed’s government over the last week, the president had not attempted to make a single call to the party’s presidential candidate, MP Abdulla Yameen.

“We are a government stakeholder, yet not a single call has been made [by President Waheed] to Yameen,” he claimed. “This is the level of how the government operates now.”

Nihan alleged that the government was being run as if it was solely operated by the president’s Gaumee Ithihaad Party (GIP), rather than a collection of different parties.

PPM concerns

While not being able to speak for the PPM before an internal vote was taken, Nihan said party councillors and general members had continued to raise concerns about President Waheed’s conduct towards the party and its representatives in government.

He added that with PPM founder former President Maumoon Abdul Gayoom expected to return from a visit to Malaysia around June 29, the issue of the party’s ongoing support for the current government would need to be discussed.

“I would hope a motion will be discussed concerning leaving the current government in the coming week after the campaign trips are over,” Nihan said.

“A lot of damage has been done, and there is a belief this has been masterminded by GIP loyalists to discredit the party in the outer islands. It has had the opposite effect though,” he added.

Nihan said a many concerns were raised by members of the perceived deliberate attempt to remove PPM representatives in the government “one by one”.

On Thursday (June 20), Sun Online reported that PPM member Abdullah Nashid was dismissed by the government over accusations he had been involved in corruption.

During the same week, the President’s Office announced it had dismissed Deputy Tourism Minister Mohamed Maleeh Jamal and Minister of State for Economic Development Abdulla Ameen from the government at the insistence of their former party, the DQP.

Former Deputy Minister Maleeh expressed his belief at the time that he had been fired because of his support for the presidential candidate of PPM, MP Abdulla Yameen.

On the back of the dismissals, the PPM told local media on June 20 that it would consider leaving the government should the party’s deputy leader and current Minister of Tourism Ahmed Adheeb be fired from his post.

On Wednesday (June 19), Adheeb was accused of running his ministry in an “unacceptable” manner by Mariyam Mizna Shareef who announced her resignation as minister of state for tourism, arts and culture in protest.

Contacted by Minivan News after announcing her resignation, Mizna declined to discuss her position further, requesting to stay clear of the country’s political arena and media attention.

“Political games”

Nihan today accused Mizna, who is the daughter of DRP Spokesperson Ibrahim Shareef, of playing “political games” in what he said was a bid to launch unproven allegations against Minister Adheeb to discredit him.

“Adheeb is the elected deputy leader of our party and is also a great young politician in the country,” he said, “[Mizna] was given her position as a present from [DRP Leader] Ahmed Thasmeen Ali who campaigned to get her the position.”

Nihan alleged that Mizna’s father, Ibrahim Shareef was seeking to blame any negative coverage of the present administration as being the fault of the PPM, as part of President Waheed’s aim of removing its members from the government.

He also accused Shareef of questioning the need to retain the PPM within the present government ahead of elections.

Despite the PPM previously raising concerns over what it claimed was President Waheed’s use of state fund and resources to give his own party an unfair campaign advantage, party officials have maintained that they would remain in the coalition as part of what it claimed was attempt to run the nation in a stable manner.

Nihan said today that the party would continue to look at whether it was in the best interest of the Maldivian people for the party to remain in the present coalition, before any decisions were taken by party members and senior officials.

Despite the PPM’s decision to stand directly against Dr Waheed in the presidential election, Abdulla Yazeed, a spokesperson on the media team of the president’s ‘forward with the nation’ coalition, today dismissed the likelihood of the PPM prematurely leaving the present government.

Yazeed told Minivan News that he did not believe a split in the current administration was imminent, adding that all parties were committed to ensuring the state continued to run effectively ahead of the upcoming vote.

Contacted by Minivan News today, DRP Parliamentary Group Leader Dr Abdulla Mausoom refused to speculate on whether the PPM would remain as a member of the current government up to September’s election.

However, Dr Mausoom dismissed the threat to the coalition’s campaign from the PPM standing as an election rival, claiming the MDP was the only “reasonable competitor” that stood a chance of beating President Waheed’s coalition in September.

He claimed that the party was also confident that no single candidate would have sufficient electoral support to secure a first round election victory, that voters disenchanted with the MDP candidate former President Mohamed Nasheed’s three years in government would look to President Waheed as an alternative to previous administrations.

President’s Office Media Secretary Masood Imad was not responding to calls at time of press.

Presidential candidates

Of the parties presently part of the coalition government, the PPM announced it would be fielding its own presidential candidate to contest the election after MP Yameen was declared the winner of a primary election against rival Umar Naseer in March this year.

Fellow government-aligned parties including the Dhivehi Qaumee Party (DQP), the Dhivehi Rayyithunge Party (DRP) and the religious conservative Adhaalath Party have all pledged to back President Waheed and his Gaumee Ithihaad Party (GIP) in the election.

The government-aligned Jumhoree Party (JP) meanwhile said last week that it would not make a decision on whether to join President Waheed’s coalition before its national congress scheduled for later this month, despite anticipating that it will field its own candidate – expected to be party founder and leader Gasim Ibrahim.

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ACC defends report on airport privatisation deal as Sheikh Imran insinuates bribery from GMR

The Anti-Corruption Commission (ACC) has issued a press statement defending its investigative report of the airport privatisation deal signed by the previous government, harshly condemning “false and misleading” remarks by politicians of government-aligned parties.

On June 17, the ACC released a 61-page investigative report concluding that there was no corruption in the awarding of a concession agreement to a consortium of Indian infrastructure giant GMR and Malaysia Airports Holdings Berhad (MAHB) to develop and manage the Ibrahim Nasir International Airport (INIA).

The report was met with strong criticism and bribery allegations from parties in the government coalition.

Insisting that the government’s stand would not change as a result of the ACC findings, President’s Office Spokesperson Masood Imad told the Press Trust of India (PTI) that “if there is a reasonable cause of doubt, this report can be contested by some parties.’’

“Many people say here that the ACC Board is not an unbiased organisation. They say it is politically motivated,” he was quoted as saying.

Religious conservative Adhaalath Party President Sheikh Imran meanwhile described the report as “a slap in the people’s face” while President Dr Mohamed Waheed’s Gaumee Inthihaad Party (GIP) Spokesperson Abbas Adil Riza accused ACC members of corruption.

In an appearance on pro-government private broadcaster DhiTV last night (June 23), Imran insinuated that ACC members accepted bribes from GMR offered through former Indian High Commissioner D M Mulay.

The ACC report was “a highly unprofessional, semi-technical and procedural review” that did not amount to either a proper investigation or an audit, Imran said, calling for “a full-fledged investigation.”

In November 2012, the current administration abruptly terminated the US$500 million contract with the GMR-led consortium, declared the concession agreement ‘void ab initio’ (invalid from the outset), and gave GMR seven days’ notice to leave the country.

The decision followed weeks of protest by a self-titled “National Movement” spearheaded by Sheikh Imran and senior government officials – born out of the unofficial December 23 coalition of eight political parties and an alliance of NGOs that rallied at a mass gathering to “defend Islam” in late 2011 – calling on the government to “reclaim” and nationalise the airport.

Last Friday, GMR filed a claim for US$1.4 billion in compensation from the Maldives at ongoing arbitration proceedings in Singapore over “wrongful termination” of the contract.

Meanwhile, former Attorney General Azima Shukoor, who headed the cabinet committee that advised termination of the contract, contended on DhiTV last week that the ACC report was “incomplete” as the commission had overlooked several key factors.

“Did they omit the factors deliberately or unknowingly or simply just overlooked them? But a lot of factors have been overlooked and omitted from the report. The state will suffer great losses because of it. Especially when the country is tied up in a judicial case,” she was quoted as saying by newspaper Haveeru.

ACC response

In its press release on Thursday (June 19), the ACC stated that its investigation was “not based on what politicians say at podiums and in the media.”

“Instead, the case was investigated based on relevant information collected for the investigation, documents and statements taken after questioning those involved in the case,” the ACC said, denying the allegations of undue influence on its members or staff.

The ACC statement added that the commission in concluding investigations adhered to article 25 of the Anti-Corruption Commission Act of 2008, and did not reach its conclusions “after considering the wishes of a particular politician.”

The commission noted that it had not responded to any political rhetoric targeting the ACC in the past, adding that all corruption investigations followed criminal justice procedures, the ACC Act and regulations under the law.

The statement explained that article 25(a)(2) of the Act required the commission to submit cases for prosecution if sufficient evidence to secure a conviction was gathered.

In the absence of evidence to prove corrupt dealings, article 25(a)(1) of the Act stipulates that the commission must declare that the case does not involve corruption.

The report made public last week contained information collected for the investigation, observations and the reasoning for reaching the conclusion “without any omissions or additions,” the ACC added.

“This is the first time that an investigative report of a case investigated by the commission has been made public like this,” the statement continued. “It was released that way to provide details of the case to the public as transparently as possible.”

The ACC further noted that in December 2012 the commission submitted a case to the Prosecutor General’s Office (PGO) requesting criminal prosecution over the previous government’s decision to deduct a court-blocked Airport Development Charge (ADC) from concession fees owed to the state.

The ACC asked the PGO to seek reimbursement of MVR 353.8 million (US$22.9 million) from former MACL Chair Ibrahim ‘Bandhu’ Saleem and former Finance Minister Mohamed Shihab over the alleged misuse of authority the commission contended had led to significant financial losses for the state.

Bribery allegations

Responding to remarks in local media last week by an unnamed ACC member alleging that Imran attempted to influence the outcome of the investigation, the Adhaalath Party President admitted on DhiTV last night that he met commission members while the “National Movement” protests were ongoing.

Imran said he met ACC members after learning of efforts by GMR to bribe politicians through the former Indian High Commissioner Mulay.

Mulay also requested meetings with Imran himself on numerous occasions “through some of our ministers and even by directly calling our office,” he claimed.

Upon hearing of meetings between Mulay and ACC members, Imran said the leaders of the “National Movement” met commission members to “advise against accepting bribes.”

“[ACC members] said, ‘how can we go near that? we have sworn an oath,'” Imran said.

He claimed the ACC members told him that “the roots go deep” in the GMR deal and that former President Nasheed “completed the deal in Singapore.”

ACC members informed Imran that bribes from GMR was deposited to bank accounts in countries near Singapore, he claimed, while the commission members provided assurances that “everything would be made clear” once the investigative report was made public.

Imran said he would reveal further details of the “National Movement’s” meeting with ACC members if the commission responded to the allegations.

“In any case, we were working to liberate the airport on behalf of religion and the nation,” he said, adding that the government eventually decided to terminate the agreement without waiting for the ACC report.

As a result of pressure from the protests, he continued, the government was convinced it was not in the national interest to persist with the contract.

Imran also insinuated that the ACC would receive a portion of the US$1.4 billion compensation figure claimed by GMR.

State Minister for Home Affairs Abdulla Mohamed, who was part of the protests against GMR, meanwhile argued that the ACC releasing its report a few days before an arbitration hearing could not be “a coincidence.”

“Do we really have to comply with a court order from a Singaporean court?” he asked.

He contended that the Maldivian government would not have to compensate GMR despite a decision in favour of the consortium at the ongoing arbitration proceedings.

“Also, we can appeal such a judgment in Maldivian courts, can’t we? That’s not prohibited by Maldivian law. There’s no obstacle to that. So this is not something that the public should be concerned about at all,” he said.

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Former MDP MP Musthafa to ask Supreme Court to declare DRP Leader Thasmeen’s seat vacant

Former Maldivian Democratic Party (MDP) MP Mohamed Musthafa has said he is filing a case in the Supreme Court requesting the apex court declare the seat of Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali vacant, over unpaid debts.

Musthafa contends Thasmeen – recently appointed President Mohamed Waheed’s running mate ahead of September’s election – had not paid loans he took from Deputy Speaker of Parliament Ahmed Nazim or those taken from the Bank of Maldives in the name of a company of which he is a shareholder.

Musthafa himself was disqualified from the parliament in 2012 over an unpaid decreed debt, which the court concluded had rendered him constitutionally ineligible to remain in the seat.

As a consequence, Mustafa said that there was precedent for the court to declare Thasmeen’s Kendhoo Constituency seat vacant.

On June 17, the Civil Court ordered all Thasmeen’s bank accounts of frozen, and ordered immigration to withhold his passport following a case filed by Deputy Speaker Nazim to recover a debt of MVR 1.92 million (US$124,513).

Nazim filed the case requesting enforcement of a Civil Court verdict in April 2011 – upheld by the High Court in April 2013 – ordering the vice presidential candidate to pay back the money.

MP Nazim, of the Progressive Party of the Maldives (PPM), initially sued Thasmeen in March 2011 to recover the remainder of a loan worth MVR 2.55 million (US$200,000). After the Civil Court ruled in favour of Nazim, Thasmeen appealed the judgment at the High Court in June 2011.

In October 2011, the High Court upheld Civil Court verdicts ordering Mahandhoo Investments and Kabalifaru Investments – two companies with ties to Thasmeen – to repay millions of dollars worth of loans to the Bank of Maldives Plc Ltd (BML).

In the first case involving Mahandhoo Investments, BML issued a US$23.5 million demand loan, a US$103,200 bank guarantee and US$30,090 letter of credit on July 10, 2008.

The second case involved a US$3.3 million loan issued to Kabaalifaru Investment. The appeal of a Civil Court verdict on September 30, 2009 ordered the company to settle the debt within 12 months.

Meanwhile, a third case involving a Civil Court verdict in December 2009 ordered luxury yachting company Sultans of the Seas – with close ties to the DRP leader – to pay over US$50 million in unpaid loans, including incurred interest and fines, was appealed at the High Court.

In September 2009, Maldives Customs filed a case at Civil Court to recover US$8.5 million from Sultans of the Seas in unpaid duties and fines for allegedly defrauding customs to import two luxury yachts, and in February 2010 the court ordered the company to pay MVR 110 million (US$7 million) as fines and unpaid import duties.

Precedent

In July 2009, then-PPM Vice President Umar Naseer filed a case against Musthafa shortly after the MP won the election for Thimarafushi constituency against former President Maumoon Abdul Gayoom’s son, Gassan Maumoon.

Umar Naseer contended that Musthafa not repaid a loan of US$31,231.66 (MVR 481,952) borrowed from the Bank of Credit and Commerce International (BCCI) according to the court order and therefore must be removed from parliament for the violation of article 73(c)1.

According to the article 73(c)1 of the constitution, “a person shall be disqualified from election as, a member of the People’s Majlis, or a member of the People’s Majlis immediately becomes disqualified, if he has a decreed debt which is not being paid as provided in the judgment.”

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Special Operations (SO) officers stationed permanently on Thinadhoo

The Maldives Police Service (MPS) has decided to station officers of the Special Operations (SO) command on the island of Thinadhoo in Gaaf Dhaal atoll.

According to Sun Online, the SO officers will work with the Thinadhoo police station to establish “peace and security”.

On February 7, 2012, SO officers instigated a violent mutiny, assaulted government supporters, ransacked the ruling Maldivian Democratic Party (MDP) Haruge (meeting hall), staged a protest at the Republic Square demanding the resignation of then-President Mohamed Nasheed, clashed with soldiers and stormed the national broadcaster in the hours immediately preceding Nasheed’s controversial resignation.

Moreover, on February 8, 2012 SO officers brutally beat supporters of the deposed MDP during a heavy-handed crackdown of a protest march led by Nasheed, who had just declared that his resignation the previous day was made “under duress.”

Dozens of demonstrators were left injured and hospitalised in a crackdown described by the Human Rights Commission of the Maldives (HRCM) as “brutal” and “without warning.”

The crackdown sparked violence across the country, with several islands shutting down or burning police stations and courts, notably in the urban centres of Addu City, Thinadhoo and Kulhudhufushi.

In March 2012, police arrested 17 people in Thinadhoo for alleged involvement in vandalising government property and setting fire to the police station, magistrate court, atoll council office, and all police vehicles. Some 108 persons involved in the demonstration are currently facing criminal prosecution.

Nine policemen were attacked and subsequently treated at the Thinadhoo Regional Hospital, leading police to declare the island unsafe for police officers.

More recently, President Dr Mohamed Waheed’s visit to Thinadhoo earlier this month was met with hundreds of angry protesters.

Since the transfer of presidential power, SO officer have been accused of using excessive force against demonstrators by Amnesty International.

In May this year, Addu City Mayor Abdulla Sodiq told Minivan News that 50 people were arrested in advance of a visit by President Waheed, “and about 90 percent of those taken in were MDP supporters”.

Mayor Sodig explained that the city council had requested the police “provide extra strength to increase numbers to about 30 per station.”

“The special operations team [responded by] sending their ‘star force’, but they don’t have their commander here. He’s not in control of this group or operations. Instead they are directly overseen by Male’ command,” said Sodig.

“That’s the reason why we don’t want them to continue,” he declared.

Later that month, eight young detainees arrested in the Maradhoo ward of Addu City alleged physical abuse by SO officers while they were under police custody.

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Maldives failing to uphold international human rights obligations: Forum Asia

The Maldives has failed to uphold its obligations to core international human rights treaties related to freedom of expression, assembly and association, the regional NGO Forum Asia has concluded.

The Asian Forum for Human Rights and Development (Forum Asia) – a regional human rights NGO with 47 member organisations from 16 Asian countries – evaluated the promotion and protection of these core human rights in the Maldives in regard to September’s presidential elections during their recent mission to the Maldives.

Forum Asia noted the “shortcomings in the laws relating to freedom of assembly”, particularly relating to the “shrinking space” for the exercise of the right to assemble as well as the right of all workers to associate and assemble, during their press conference held Saturday (June 22).

Reports of security forces engaging in excessive use of force to prevent and disburse assemblies, also “concerned” the Forum Asia mission.

Security personnel were urged to exercise restraint and refrain from using excessive force, irritants, or dyes on assemblies, while the Police Integrity Commission (PIC) has been asked to closely monitor and prevent such situations, said Forum Asia.

“We hope that the PIC and the security forces will work together to ensure they are able to resort to reasonable and internationally accepted means while engaging with assemblies,” said Forum Asia’s South Asian Programme Officer Gayatri Khandhadai. “Similarly we hope that all protesters also resort to peaceful and democratic means while exercising their right to assembly.”

“We are particularly also worried about the restrictions placed on journalists covering these protests,” she added.

Khandhadai highlighted that it is unrealistic for journalists to seek accreditation for different types of events – protests, cultural events, etc – given the time and energy involved in the registration process.

“Media is the platform that brings information to the people, so media must have free access. we have requested to amend the laws on the basis of practicality because Maldives also belongs to the civilized world of the 21st century,” said Forum Asia Chairperson Subodh Raj Pyakurel.

“It may be legal to put some kind of regulation and restriction process etc, but this is not legitimate, because one journalist can go anywhere, anywhere, informally,” he noted.

Forum Asia also identified “difficulties faced by the various associations”, including NGOs, professional associations, trade unions, community based organisations, and political parties, in the Maldives attributed to “unclear regulations, especially relating to registration.”

Human rights perspective needed

The limitations codified in the ‘Freedom of Peaceful Assembly Act’ “must be amended to meet constitutional guarantees and international norms”, the organisation stated.

“There has to be a method – on paper and in practice – for what are the different peaceful engagements you have to have with the crowds,” said Khandhadai.

“These rights are particularly important to ensure ahead of elections” and to guarantee peaceful and inclusive elections occur, she added.

The Government of Maldives was also compelled to implement recommendations made by the Human Rights Commission of the Maldives (HRCM) and PIC.

Additionally, political parties were requested to “adopt a human rights perspective and formally include the promotion of human rights in their official agendas and manifestos prior to elections”.

The Forum Asia mission also “implored the Maldives’ government, judiciary, legislature, independent commissions and media to develop and strengthen their engagement with civil society organisations, which are essential for a healthy democracy”.

Meanwhile, civil society and human rights defenders within the Maldives were encouraged to unite in solidarity and engage with the state to promote a culture of human rights in the country, said Forum Asia.

Use of force disastrous

Having less than 10 percent of Male’ available for protests is “quite a worrisome issue”, said Khandhadai.

Unprovoked actions against demonstrators have been seen in the Maldives and it is necessary to identify whether that use of force could have been avoided or not, as well as whether the crowd was posing a threat, noted Khandhadai.

“The points to be taken into consideration are what would have happened if that force was not used,” she explained. “If any other means could have been put in place to disperse that crowd, or even if that crowd needed to be disbursed to start with.”

“I’m particularly worried about the sanction of the use of irritants in a space like Male, which is particularly small… and shrinks the already small area where people can protest,” she continued.

Sanctioned or encouraged use of force within that small space “will become very, very difficult and disastrous even,” Khandhadai added. “The only solution is to promote a culture of peaceful engagement.”

Pyakurel echoed these sentiments and emphasised that holding democratic elections means maximising public mobilization.

“During the elections we always expect that each and every citizen has the opp to interact and understand,” he noted.

“People [protesting] become destructive only when they are restricted, if you don’t restrict them they don’t become destructive,” he continued.

“Discipline is a must but it should be regulated through a very concrete and specific law, not the will of the [police] officer – that creates a problem,” he added.

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Auditor General’s Office to verify disputed figures in finance ministry audit report

The Auditor General’s Office has said it is verifying whether Vimla Construction Pvt Ltd was in fact given an advance payment of MVR 198.1 million (US$12.8 million) in February 2009 as flagged in the finance ministry’s 2011 audit report.

In a press release last week, the Auditor General’s Office said it was in the process of “further checking and verifying” the disputed figure stated in the audit report (Dhivehi) released earlier this month following questions raised in the media over its authenticity.

The case highlighted in the report concerned a large advance payment for delivery of construction materials for a tsunami-related housing project in Gaaf Alif Atoll.

Vimla has claimed in local media that the company received MVR 5 million (US$324,254).

“The audit report did not state that the advance payment to Vimla Construction for the Gaaf Alif housing project was made in violation of the law and regulations,” the press release stressed, adding that the audit office did not make any recommendations concerning the advance payment.

The case was uncovered during auditing of the finance ministry records, the press release added, and the figures were based on information collected from the ministry for its 2011 audit.

Auditors met with senior officials of the finance ministry on February 24, 2013 to verify the figures stated in the audit report and invited feedback from the ministry in a letter sent on March 19, 2013, the press release revealed.

“However, as a result of not receiving comments for the Ministry of Finance and Treasury’s 2011 audit report as of its publication date, this office believes that errors in the figures concerning the cases highlighted in the report are possible,” the Auditor General’s Office conceded.

The press release added that the Auditor General’s Office regretted “any difficulties” or “diminished name or reputation” caused by inaccuracies contained in its audit reports.

The press statement concluded by providing assurances to the public on the professionalism and impartiality of the audits conducted by the office.

The case flagged in the finance ministry’s audit report for 2011 concerned payments made on February 18, 2009 – just over three months after the Maldivian Democratic Party (MDP) administration took office.

However, following the controversial transfer of presidential power on February 7, 2012, President Dr Mohamed Waheed appointed members of then-opposition parties to cabinet and senior government posts.

Current Finance Minister Abdulla Jihad was also the finance minister during the last year of former President Maumoon Abdul Gayoom’s 30-year reign.

Auditor General Niyaz Ibrahim meanwhile told newspaper Haveeru last week that the office has uncovered a number of issues in the tsunami-related reconstruction projects commenced by the Gayoom government in Gaaf Alif atoll.

Niyaz told the local daily that the finance ministry’s audit report for 2011 was published after a long period awaiting comments from the ministry.

“There could be a mistake since they have not said whether there is anything they object to or not,” he was quoted as saying.

Tsunami reconstruction

Niyaz also revealed that the Auditor General’s Office was in the process of completing a special audit of the tsunami reconstruction projects, which would also shed light on the disputed advance payment made to Vimla Construction.

According to the section of the audit report dealing with the advance payment, the “Reconstruction and Development of Gaaf Alif Atoll Project” was to be undertaken with loan assistance from the Saudi Fund.

However, in 2011, the finance ministry spent MVR 17.6 million (US$1.1 million) out of its special budget to transport material needed for the project from the Hithadhoo Regional Port in Addu City to Gaaf Alif atoll.

While Vimla was contracted for the project and given an advance payment, the report explained that a foreign company named Performance Builders was contracted under a “deeds of assignment” on March 25, 2010 to replace Vimla on the project as the local company had been unable to complete the contracted work.

According to local media, the project was eventually awarded to the Maldives Transport and Contracting Company (MTCC) after Performance Builders also failed to complete the work. The government-owned company reportedly faced a loss of MVR 17 million (US$1 million) due to nonpayment.

The case is currently the subject of an inquiry by parliament’s Finance Committee.

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GMR compensation claim of US$1.4 billion eclipses annual state budget

Indian infrastructure giant GMR has filed a claim for US$1.4 billion in compensation from the Maldives, following the government’s sudden termination of its concession agreement to manage and upgrade Ibrahim Nasir International Airport (INIA).

According to Indian media, the 75 page claim for “wrongful termination” of the concession agreement includes payments to subcontractors and loss of profits over the lifespan of the 25 year agreement.

Both the government and the state-owned Maldives Airports Company Limited (MACL) will be invited to respond, with a final court order in the case expected in March 2014.

In separate Singapore-based arbitration proceedings one of the project’s lenders, Axis Bank, is also seeking payment of US$160 million for a loan guaranteed by the Maldivian Finance Ministry.

Axis Bank recently raised concerns with MACL and the government, after President Mohamed Waheed moved to create a state-owned airport company and transfer to it MACL’s management responsibilities.

The prospect of MACL’s assets being dissipated led Airports Council International (ACI), the global body representing the world’s airports, to advise its members to exercise caution before making any investment in the Maldives relating to INIA, warning of “legal and financial risks”.

The government subsequently dropped the attempt, after its Attorney General Aishath Bisham warned that President Waheed had exceeded his authority in appointing board members to the new entity.

The lead up to eviction

GMR, in consortium with Malaysia Airports, narrowly won the International Finance Corporation (IFC)-managed bid for the airport in 2010, and signed the agreement with MACL under the former government of Mohamed Nasheed

The then-opposition, including the Progressive Party of the Maldives (PPM), People’s Alliance (PA), Dhivehi Qaumee Party (DQP) and Adhaalath Party (AP), opposed the agreement primarily on nationalistic grounds, and alleged corruption in the bidding process.

Other concerns raised by the opposition at the time included the prospect of GMR allowing Israeli military aircraft to stop over in the Maldives and refuel “after bombing Arab countries”.

The DQP then filed a civil court case, managing to block the developer’s charging of an Airport Development Charge (ADC) stipulated in the concession agreement, on the grounds it was a tax and therefore required parliamentary approval.

Backing the concession agreement, the Nasheed government permitted the airport developer to deduct the ADC from its share of the revenue as a stopgap measure, while it sought to appeal.

However shortly afterwards the Nasheed government was deposed during February 7 2012’s controversial transfer of power, and the opposition parties assumed control of the government – and the prospect of paying GMR for the development of the airport.

The government received US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time it was facing a crippling budget deficit, a foreign currency shortage, plummeting investor confidence, spiraling expenditure, and a drop off in foreign aid.

In the second quarter GMR presented MACL with a bill for US$1.5 million, and in the third quarter, US$2.2 million.

“The net result of this is that the Maldivian government now has to pay GMR for running the airport,” wrote DQP Leader and newly-appointed Special Advisor to President Mohamed Waheed, Dr Hassan Saeed, in a self-described “candid” letter to Indian Prime Minister Manmohan Singh.

A subsequent report by the government’s own Auditor General (AG) found concession revenue due the government had plummeted fourfold as a result of the court verdict sought by Saeed’s own party while it was in opposition.

According to the report, net concession revenue to the government had fallen to just US$6,058,848 in 2012, compared to US$25,424,877 in 2011.

Rather than appeal the Civil Court verdict obstructing the ADC, “The new government took the view that it would not be proper for it to intervene in the legal process for the benefit of a private concern,” the report noted, and instead, on April 19 2012, the informed the developer it was “retracting the previous agreement [to offset the ADC] on the grounds that the then Chairman of MACL did not have the approval of the MACL board to make the agreement.”

GMR asserted that this decision was a political event as defined within its concession agreement, and warned that this would amount to a breach of the agreement by the government.

“The government did not accept this argument,” noted the AG.

Seeking a way out of the agreement but wary of the heavy penalties in the termination clause, the government accused the World Bank’s IFC of “irresponsibility” and “negligence” in its conduct of the bidding process.

“The government must also consider how much money has to be paid back as compensation if terminating the agreement,” said Attorney General at the time, Azima Shukoor, during a prescient press conference in September 2012.

“It is clear to all of you that the Maldives financial and economic situation is at a critical level, and in this situation [termination] is not an easy thing to do,” Shukoor said.

In August 2012, with the new terminal and refurbishment 25 percent complete according to the government’s outside engineering assessment, the government ordered a halt to construction pending new ‘regulatory approvals’, and demanded a second runway not included in the original agreement.

GMR agreed to construct an emergency runway and proposed exempting Maldivian nationals from paying the ADC as a compromise. The company received no response to the offer.

Dr Hassan Saeed meanwhile issued a pamphlet calling for the cancellation of the agreement, likening it to “taking bitter medicine to cure a disease” or “amputating an organ to stop the spread of cancer.”

In his letter to Indian Prime Minister Manmohan Singh, dated September 19 2012 and obtained by Minivan News, Saeed further claimed that “GMR and India ‘bashing’ is becoming popular politics”, and warned that “as a result, “the Maldives is becoming fertile ground for nationalistic and extremist politicians.”

“I want to warn you now that there is a real danger that the current situation could create the opportunity for these extremist politicians to be elected to prominent positions, including the Presidency and Parliament on an anti-GMR and anti-India platform,” Saeed informed Singh.

Saeed went on to accuse GMR of extensive bribery, including the payment of “millions of dollars to buy MPs to get a parliamentary majority for the then ruling Maldivian Democratic Party”.

He claimed that “politicians and MPs who end up in GMR’s pocket keep silent but no one – with the exception of former President Nasheed and his key associates – have defended the indefensible GMR deal in public.”

Eviction

In late 2012 the government declared the concession agreement ‘void ab initio’ (invalid from the outset), and gave GMR seven days’ notice to leave the country.

The move swiftly followed the Singapore Supreme Court’s lifting of an injunction blocking MACL from taking over the airport pending arbitration proceedings, on the grounds the arbitration court had no jurisdiction to prevent the Maldives as a sovereign state from expropriating the airport.

The full verdict however did not exempt the government from compensation for this maneuver. In fact, according to the verdict document, Financial Controller for the Ministry of Finance Mohamed Ahmed “affirmed in an affidavit that the Maldives government would honour any valid and legitimate claim against it. He also stressed that the Maldives government had never defaulted on any of its payments.”

Moreover, lawyer representing MACL, Christopher Anand Daniel, “also accepted that if the arbitration tribunal found that the Appellants were wrong in their asserted case that the Concession Agreement was void ab initio and/or had been frustrated, but the Appellants had by then already gone ahead with the taking over of the airport, they would at least be liable to compensate the respondent for having expropriated the airport” (emphasis retained).

ACC exonerates airport deal

The Auditor General’s report acknowledged allegations of corruption in the deal, but finding the evidence “not conclusive on this point”, deferred to the judgement of the Anti-Corruption Commission (ACC).

That arrived on June 17, 2013, in the form of a 61 page investigative report that concluded that the bidding process was conducted fairly by the IFC, and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.

The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.

Furthermore, “Considering the situation (2008, 2009 and 2010) when the decision was made to privatise the Male’ International Airport,” the ACC’s calculations showed that MACL would make a profit of about US$254 million in 25 years if the airport was operated by the government-owned company.

Conversely, the government would receive about US$534 million in the same period from the GMR consortium if the airport was privatised, the ACC found.

Reactions

Following publication of the ACC’s report, the government has backed away from allegations of corruption and instead declared to evict the developer was made due to its impact on state finances.

“Back before the government took back control of the airport from GMR, the reason we gave was that the deal was bleeding the country’s economy. We were paying GMR to keep them here,” President’s Office Spokesperson Masood Imad told Minivan News last week.

Azima Shukoor meanwhile labelled ACC’s report “incomplete” and “lacking professionalism”, in an interview with local media.

“There’s no contradiction between the government’s decision and the ACC report. We never levelled any corruption charge in terminating the agreement,” said the former Attorney General, in an interview with local media.

“Did [the ACC] omit the factors deliberately or unknowingly or simply just overlooked them? But a lot of factors have been overlooked and omitted from the report. The state will suffer great losses because of it. Especially when the country is tied up in [arbitration proceedings],” Shukoor was reported as saying.

“The state did a thorough investigation of the contract, including what happened during and after the signing of the agreement. So the government’s legal position doesn’t and shouldn’t change due to the report. We made a very firm decision,” she said.

Speaking at a campaign rally on the island of Thimarafushi in Thaa Atoll, former President Nasheed observed that the figure sought by GMR as compensation amounted to more than the annual state budget of the Maldives.

“Even today in my view it is one of the most important duties of the People’s Majlis to renew the contract, find a way to hold discussions with the company over [renewal], and save the Maldives from the great misfortune our people are about to face,” he said.

Former President Maumoon Abdul Gayoom’s PPM have meanwhile laid the blame for the airport debacle on President Waheed, accusing him of “ignoring advice”.

“We told the next President Mr Waheed that he should hold discussions with the GMR Group and the Indian government to arrive at an acceptable solution, after which the government was free to act on its own,” he said. “Unfortunately, this was not done and suddenly there was this unhappy ending,” Gayoom was reported as saying in the Hindu, following a visit to India and a meeting with Prime Minister Singh.

Following the PPM’s apparent turnaround on the GMR issue, Parliamentary Group Leader of the Waheed-aligned Dhivehi Rayithunge Party, Dr Abdulla Mausoom, said it was in fact senior figures in the PPM who were among the most vocal supporters for terminating the GMR agreement.

“It is ironic that we are hearing these statements from the PPM, whose leader has been witnessed supporting rallies demanding the cancellation of the [GMR] agreement,” he said.

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Nasheed welcomes scrutiny of MDP government finances, calls for ACC investigations

Former President Mohamed Nasheed has called for investigations by the Anti-Corruption Commission (ACC) into government spending during his administration flagged by the Auditor General’s Office as ostensible violations of the Public Finance Act.

Speaking at a campaign rally in the Henveiru ward of Male’ on Wednesday night (June 19), Nasheed said he accepted the findings of audit reports concerning public finances during the three years of the Maldivian Democratic Party (MDP) government.

“We were the government that first started work with independent institutions in place. We were the government that had the good fortune of having been the target of audits by an independent Auditor General for the first time; and the government that had the opportunity to govern with the oversight of an independent Anti-Corruption Commission,” the MDP presidential candidate said.

“Our purpose, our wish, is for all government funds to be accounted for and for all expenditures to be transparent. I assure all citizens of the Maldives, I will not touch a single cent of your money,” he added.

Nasheed said he was pleased that of the MVR 31 billion (US$2 billion) spent by the MDP government from 2009 to 2011, the Auditor General’s Office only estimated that approximately six percent was “not spent in accordance with public finance regulations.”

“No one has said that [these expenses] involved corrupt dealings or facilitated corruption,” he stressed, calling for investigations by the ACC to determine whether corruption or misappropriation of funds had taken place.

Nasheed said he had studied all the audit reports of government ministries from 2009 to 2011 released by the Auditor General’s Office so far.

“What I want to note is that [expenditure] not being in line with public finance regulations does not mean corruption has taken place or that a criminal offence was committed,” he contended.

The Auditor General’s role was identifying expenditures made in breach of regulations, Nasheed explained, while the financial loss to the state as a result of the ostensibly illegal spending would be determined in light of investigations.

Taking examples of cases highlighted in audit reports, Nasheed referred to the purchase of five cars for government use flagged in the 2011 audit report of the finance ministry.

The audit report noted that a local company was contracted in December 2010 to buy five Nissan Sunny N16 Super Saloon cars for MVR 2.9 million (US$193,904).

However, the company delivered Nissan cars of the Ex Saloon model, the audit found.

“So what we have to find out is whether there was a difference in price between the two brands and which [brand] was cheaper,” Nasheed said.

The case reminded him of the Violet House group in Majeedhiyya School ordering a set of football boots when he was in school, Nasheed said.

“What they received was a set of key chain boots,” he said.

On the Auditor General discovering that the MDP government spent MVR 13.9 million (US$901,426) to train 259 participants of the ‘Hunaru’ skills programme, Nasheed said the programme was brought to a halt after the “coup d’etat” on February 7, 2012 and no further participants were trained despite being enrolled.

The initial spending included capital expenditures for the skills training programme, which targeted leading 8,500 youth to the job market, Nasheed noted.

While the Auditor General’s Office calculated that MVR 50,000 (US$3,242) on average was spent to train a single participant, Nasheed contended that if the programme had concluded successfully, “we estimated at the time that the Hunaru programme could be conducted for about MVR 7,000 or MVR 8,000 per participant.”

On MVR 8.1 million (US$525,291) worth of unpaid bills in the aviation sector owed to the government, Nasheed called on the Auditor General’s Office to forward the case to the ACC for further investigation and to recover the outstanding payments.

“The national administration office of the North [Province] made illegal expenditures for travel [according to the audit report],” Nasheed continued “In this case, if these trips were made in violation of the regulations, we want it to be stopped and for those who do it – even if they were under our government – to receive the just punishment.”

Referring to the Auditor General alleging illegal expenditures for the November 2011 SAARC (South Asian Association for Regional Cooperation) in Addu City, Nasheed said the party wished to determine the nature of the expenses in question.

“I can certainly see the convention center built there, the roads laid in Hithadhoo and the water and sewerage systems as well as the harbour there,” Nasheed said, contending that the costs would not exceed the “concrete work” that was done.

However, he added, if the Auditor General believes there were instances of illegal spending for the SAARC summit, the cases should be properly investigated.

On MVR 168.4 million (US$10.9 million) worth of unpaid expatriate work permit fees owed to the government, Nasheed said the oversight was “worrying” and called for the Prosecutor General’s Office (PGO) to file court cases to recover the outstanding payments.

The former president also took note of the ACC’s recent investigative report that cleared the previous government of corruption in the awarding of a concession agreement to a consortium of Indian infrastructure giant GMR and the Malaysian Airports Holdings Berhard (MAHB) to develop and manage the Ibrahim Nasir International Airport (INIA).

Nasheed said he had rejected requests for meetings by the companies that had submitted proposals for the airport privatisation project as he believed such interaction ahead of the conclusion of the bidding process would not be appropriate.

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Adhaalath Party head accused of attempting to influence ACC investigation into GMR

Adhaalath Party President Sheikh Imran Abdulla attempted to influence the Anti Corruption Commission (ACC)’s investigation into alleged corruption in the previous government’s aborted airport privatisation deal, a commission member alleged to local media outlet CNM.

The ACC member, on condition of anonymity, reportedly alleged that the commission during its investigation came under heavy criticism from Sheikh Imran over its refusal to tailor the report to his liking.

The ACC’s findings, which were published last week, concluded that there was no corruption in the airport privatisation deal, days prior to GMR claiming US$1.4 billion in compensation for “wrongful termination” of its 25 year concession agreement.

“He met with me on two occasions. The first meeting happened just a day before they were to have a big night of protests. He requested that the ACC help the national movement’s efforts to drive GMR away and to speed up our investigation and conclude it in such a fashion that would assist their efforts,” CNM quoted the commission member as saying.

The second meeting took place a day before the national movement’s protests concluded, he claimed.

According to the unnamed commission member, Imran requested a five-minute meeting.

“On the second night he told me that he hoped the ACC would include at least one phrase that would be helpful to the national movement,” he said.

ACC President Hassan Luthfee had his phone switched off when contacted regarding the allegations today.

Sheikh Imran and national movement steering committee member and spokesperson Abbas Adil Riza were not responding to calls from Minivan News at time of press.

Last Monday, the ACC ruled out corruption in the awarding of a concession agreement in June 2010 to a consortium of Indian infrastructure giant GMR and Malaysia Airports Holdings Berhard (MAHB) to develop and manage INIA.

In a 61-page investigative report (Dhivehi), the ACC concluded that the bidding process was conducted fairly by the World Bank’s International Finance Corporation (IFC) and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.

The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.

The amendments were published in the government gazette after the concession agreement was signed, the ACC noted.

In December 2012, shortly after the protests led by Sheikh Imran Abdulla under the self-titled ‘national movement’ against GMR concluded, the government of President Mohamed Waheed Hassan abruptly terminated the agreement and gave GMR a seven day ultimatum to leave the country.

“The government has given a seven day notice to GMR to leave the airport. The agreement states that GMR should be given a 30 day notice but the government believes that since the contract is void, it need not be followed,” then-Attorney General (AG) Azima Shukoor said in a press conference announcing the decision.

Shukoor claimed that the government reached the decision after considering “technical, financial and economic” issues surrounding the agreement.

Criticism

Responding to the ACC report in local media, Sheikh Imran Abdulla described the findings as a “slap in the peoples’ face.”

He claimed that the public now resented the ACC due to its findings and that the commission had lost credibility as a result of the report.

Imran contended that the report would facilitate the return of GMR should the opposition Maldivian Democratic Party (MDP) win the September presidential election.

Responding to the ACC’s findings, the government of President Waheed insisted that the report would have no impact on its legal position to declare the GMR concession agreement void, contending that President Waheed’s decision had nothing to do with corruption allegations levelled by “some people”.

President’s Office Media Secretary Masood Imad told Minivan News following the release of the report that the contract was declared void from the beginning due to the negative impact on state finances in 2012.

Masood said that despite “speculation from some people” concerning corruption by the former administration in signing the deal, the present government was not responsible for filing a case with the ACC.

He added that the government’s concerns over the deal had been in relation to the imposition of a US$25 Airport Development Charge (ADC) by GMR that was blocked by the Civil Court in 2011 after the then-opposition DQP filed a case on the matter.

The DQP, now part of President Waheed’s coalition government, attempted to block payment of the charge on the grounds that it was effectively a tax not approved by parliament.

In response, then MDP government agreed to deduct the ADC from the concession fees payable, while GMR later offered to exempt Maldives nationals from paying the ADC as it moved to appeal the verdict.

However, former President Mohamed Nasheed resigned under controversial circumstances on February 7, 2012 amidst a violent mutiny by elements of the police and military before the Civil Court verdict was appealed at the High Court.

Consequently, in the first quarter of 2012, Dr Waheed’s government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

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