Tourism Minister Ahmed Adheeb has revealed that the Club Faru resort is to be closed down within two months after the government took over the property this weekend.
On Saturday (January 5), the Ministry of Tourism, Arts and Culture said it had assumed control of Club Faru after the resort’s operators were said to have failed to hand over the property following the expiry of their lease agreement.
Adheeb told Minivan News that the resort would be closed as part of the government’s plans to begin the second phase of “reclaiming” Hulhumale’ this year.
“The resort is to be operated by a government company for two months and it will then be closed down and reclaimed,” he said. “It was a seven year lease that expired on November 15. Now the government has decided to reclaim that part of Hulhumale’,” he said today.
The proposed closure has been described as “interesting” by the former secretary general of the Maldives Association of Tourism Industry (MATI), who expressed hope that the government would treat all resort operators equally going forward.
Adheeb today maintained that his ministry would not favour certain resort operators over others in terms of their treatment.
According to the tourism minister, the government offered other companies the chance to temporarily manage Club Faru after the first phase of reclaiming Hulhumale’ was completed.
However, Adheeb claimed that after the expiry of a seven-year lease on November 15, 2012, the resort’s operators had gone to court on two separate occasions to try and extend their lease. He added that the operators had been unsuccessful on both attempts to obtain an injunction against the government.
Despite the lease termination deadline expiring last year and the subsequent takeover on Saturday, Club Faru’s website – when accessed at the time of press – displayed a pop-up sign dismissing rumours that the resort will be closed or temporarily shut down for renovation between November 1 to April 31.
“Attention!!! Against different phrased rumours that seem to circulate in the internet and in certain travel agencies: Fihalhohi and/or Club Faru will neither be closed nor will there be any renovation from November 1 to April 31 that could lead to disturbance. This info is valid for Fihalhohi and Club Faru. Both Islands continue as is,” the pop-up statement reads.
Management at Club Faru resort were not responding to calls from Minivan News at time of press.
Speaking to local media, Adheeb claimed that the handover had gone “smoothly” when he visited the resort yesterday (January 5).
“Everything went quite smoothly. The Finance Ministry’s financial controller, tourism’s permanent secretary, and legal officials of the ministry along with me came to the resort and took over,” he said.
“We will oversee the operations of the island as the [tourism] ministry has reclaimed ownership of this resort,” Adheeb told local newspaper Haveeru.
Local media reports have claimed that the government had assumed ownership of the island property while tourists were still holidaying at the resort.
According to Adheeb, an Italian company called Club Med had originally invested in the resort. However, after Club Faru was designated part of the Hulhumale’ reclamation plan seven years ago, Club Med was given another island as compensation.
Local media reported that the government leased the island for a period of five years on November 16 1995, after a delay in the second phase of reclaiming Hulhumale’. Following the expiry of the five year lease, it was then extended on an annual basis.
All resort operators treated the same: Adheeb
When contacted today, Former Secretary General of MATI ‘Sim’ Mohamed Ibrahim described the Club Faru handover as “interesting”, adding that no operators should be favoured when it comes to breaching legal contracts.
“While it is important that legal contracts are kept to and enforced, it is also important that individual resort operators are treated the same and not differently. It appears that Club Faru has taken precedence over others, especially as Hulhumale’ is earmarked for development,” Sim told Minivan News.
Responding to the comments, Adheeb said that the tourism ministry did not favour any resort operator over another.
While there are no other resorts in the Maldives where an operating licence has been cancelled, Adheeb claimed that when dealing with rent payments, each resort will always have to pay or face a termination notice.
The tourism minister claimed that when he first took up his position following February’s controversial transfer of power, there were 12 resorts found to be not paying rent at the time. However, through flexibility on the interest rates, he maintained there were now “no resorts not paying rent”.
“We are not tolerating resorts who do not pay rent, any operating resort has to pay. Those who are not paying already have the termination notice. This culture has to go, by the end of this year all resorts will be paying and it will become a more stable industry,” Adheeb said.
At a press conference held on December 31, 2012, Adheeb said that resort operator Yacht Tours had been sent termination notices for both Alidhoo and Kudarah resorts, with a seven day period for handover.
He added that while the ministry had come to a payment system agreement with a number of other companies, Yacht Tours had sent no official written communication in regard to the payment of outstanding rents.
Following the termination notice, Yacht Tours, a company owned by opposition Maldivian Democratic Party (MDP) MP Abdulla Jabir, said it will take the government to court over the dispute. The company has alleged that the Tourism Ministry had failed to responded to correspondence it had sent on the matter of rent payments.