Addu City Council refutes Kooddoo claims over stalled fish cannery project

The Addu City Council has denied claims by Kooddoo Fisheries Maldives Ltd (KFML) that the company is waiting for the council to grant a plot of land to build a fish processing centre and a cold storage unit.

The government-owned company claimed in a press statement earlier this week that the council has not officially responded to a request for a plot of land in the Hithadhoo harbour area and that a dispute between the council and the Fisheries Ministry over ownership of the land was stalling the project.

Fisheries Minister Dr Mohamed Shainy had also claimed during minister’s question at a parliament sitting on June 30 that the council had refused to grant a plot of land.

However, the city council claimed in a counter statement on Monday (July 14) that an 861,113 square foot land north of the regional harbour was leased to Kooddoo on November 1, 2013 for a period of 50 years with no rent to be charged for the first two years.

Moreover, the council stated that Kooddoo obtained a US$4.4 million letter of credit and US$2 million overdraft demand loan from the Bank of Maldives after mortgaging the plot, which was registered under the council’s mortgage registry on November 7, 2013.

The council accused the company of attempting to mislead the public and create division and strife amongst the city’s “fraternal and united community”.

The stated purpose of the planned cold storage facility and fish cannery is to reduce the cost of purchasing fish from Addu City as the fish catch from the southernmost atoll had to be transported to Kooddoo’s main operation base in Gaaf Dhaal atoll.

In its statement, Kooddoo noted that the city council had leased a plot of land to a private company for a similar fisheries-related project, suggesting that fishermen in Addu City would benefit more if only one of the companies was allowed to make the investment.

Responding to the objection, the city council noted that a lease agreement for a 20,000 square feet plot of land with Sea Dynamics SUL was signed on October 10, 2013 – prior to leasing a different plot to Kooddoo – following a competitive bidding process.

The council noted that it did not have the legal authority or jurisdiction to reclaim the land after terminating the agreement and compensating the company.

Moreover, the council accused Kooddoo of being both “reluctant to work in a competitive environment” and “attempting to increase influence and power in business”.

Obstruction of the council’s efforts to create a competitive business environment for the benefit of Addu City fishermen was “unacceptable,” the council statement read.

Kooddoo’s objections also suggested that the company did not wish to conduct any business enterprise in Addu City, the statement added, accusing the company of exerting influence over the Fisheries Ministry to block approval for Sea Dynamics to begin its fisheries business.

“This council has always been working, and will continue to work, to provide broad opportunity for all businesses in an open and competitive environment and to ensure security and protection for entrepreneurs in various sectors,” the statement read.

The Addu City Council also attached copies of the lease agreements with Sea Dynamics and Kooddoo, letters exchanged with the Fisheries Ministry, and copies of mortgage agreements with the Bank of Maldives.

The Addu City Council is comprised exclusively of councillors from the opposition Maldivian Democratic Party (MDP).

Meanwhile, the audit report of Kooddoo for the financial year 2013 – made public earlier this month by the Auditor General’s Office – noted that the company was “not proceeding further with the cannery project.”

“Accordingly, the total capital work-in-progress shown as that of Addu cold storage facilities and cannery project amounting MVR20,121,839 are overstated by an undetermined amount and the results for the year overstated by the unrecognised impairment, respectively,” the report stated.

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