Government’s changes to resort lease payments will cost Maldives US$135 million: MDP

The new government’s decision to allow extended resort leases to be paid in installments, rather than upfront at the end of the lease, will immediately take US$135 million of the country’s coffers, the Maldivian Democratic Party (MDP) has claimed.

New Tourism Minister Ahmed Adheeb was not responding at time of press. Former Tourism Minister Dr Mariyam Zulfa explained that Nasheed’s government had offered resorts the option of extending resort lease periods from 25 to up to 50 years.

“Under the regulations the resort lease period was extended to 50 years, with a clause that this would cost US$100,000 every year. But the regulations left open to interpretation how this was to be collected,” she said.

“The Nasheed government had requested that those resorts extending to a 50 year lease pay in a lump sum,” she said, “but while I was Tourism Minister, Gasim Ibrahim and Ahmed ‘Redwave’ Saleem kept pressuring me to let them pay on a yearly basis. They didn’t want to give any money to the government, and soon after the government changed they got what they wanted. [The installments] will only be payable at the end of the current lease periods – it is a huge loss to the treasury.”

According to the MDP, 25 parties had paid the new lease under Nasheed’s government, while a further 90 parties had signed up to extend the lease.

“Some of the resorts wanted it because it increased the value of the property, and therefore increased the value of the government’s asset,” Dr Zulfa explained. “Properties with a 50 year lease paid up front are much more attractive to investors, and encourage development.”

Dr Zulfa contended that not only did the change in policy forgo the country future earnings, “but now they’ve taken a sovereign loan of US$50 million – Tourism Minister Ahmed Adheeb was boasting about it on his Facebook page.”

“They said they need it to finance the budget shortfall – but what shortfall? There was no shortfall – not until they gave this loophole to the coup people who now won’t have to pay anything. They don’t care about the common people – infrastructure projects all over the country have stopped and contractors have been sent home. People [on the islands] are angry, upset and despairing,” Zulfa claimed.

Secretary General of the Maldives Association of Tourism Industry (MATI), ‘Sim’ Mohamed Ibrahim, said he couldn’t speculate on the impact of the decision, but said that negotiations to pay leases in advance had begun during Gayoom’s tenure as President.

“Resorts were willing to pay the government in advance for extensions of their lease,” he explained. “It was not just for development, but because it increases the value of a property and gives investors confidence. We recognized in good faith at the time that the government was in serious need of a cash injection.”

“Obviously, some people don’t agree with that. This came into effect during Nasheed’s government, which argued that if the lease was going to be paid annually, it would be renewed annually. Obviously the interpretations of the law are different.”


6 thoughts on “Government’s changes to resort lease payments will cost Maldives US$135 million: MDP”

  1. We have half baked economics led by yaameen. The only way they know to run the country is to print money before an elections and distribute them to elect themselves.

  2. Yep, Adheeb is Yamin's boy and is doing exactly what he's being ordered to do! They couldn't care less about what happens to the Treasury.

    I would like to counter Zulfa on "infrastructure projects all over the country have stopped and contractors have been sent home". This is a bit rich coming from former MDP cabinet ministers. How many contractors were owed money by the government when Zulfa and her colleagues were in charge? How many contractors were given the run around after having spent money on the Big White Elephant, otherwise known as the SAARC summit in Addu?

    My message to Zulfa is that we have not forgotten your in-action whilst you were in government.

  3. Zulfa, you don't talk about economy and you guys have given over 400 islands for free for your members .

    AAA group have not paid taxes over 15 million and you say nothing about this and they are doing business with our money.

    Did you know how much money Government is to receive from different businessmen from MDP ?

    Zulfa, don't try to ruin the country by your propaganda and talk with the facts not just talk

    MDP has given sovereign guarantee to GMR for over 300 Million dollars and that for you is nothing.

    Nasheed gave airport with just a hand shake and all the assets were given free and what sort of business deal was that.

    So far I have seen much improvement from this Governmet and it was worse during MDP regime .

    MDP is trying to create a havoc in the country to regain the power at any cost.

  4. Urging resort owners to pay the lump sum immmediately would have meant that the elected MDP government would have gotten most of the money during their elected time period.

    For eg assuming the hypothetical situation that if all the resort owners paid lump sum when MDP govt asked, MDP would have gotten around 10 billion dollars in 2010, nothing in 2011, nothing in 2012, nothing in 2013. (Hypothetically, if things had happened as MDP had wanted).

    This is very conveninient for MDP as it boasts a tremendous increase in revenue during their term, however the next Govt that comes about will not get any share of the revenue !

    This is essentially robbing future govt's and future generations of their source of revenue and income.

    Can Maldivians not understand this ?

  5. Commonsense
    It is clear that the opposition agrees that President Nasheed lost his Presidency. The big shots are openly saying that President Nasheed lost his presidency or that his government has been overthrown or toppled.
    This is plain from what we have witnessed in the media. Why do they say he has lost his Presidency? What are the ways for an incumbent to lose his Presidency. How could a serving president avoid resignation when the armed forces and armed police mutiny and demand resignation of the President. Only mindless poodles would deny that duress and compulsion are not involved in such a resignation. It is peoples’ ballot that bring leaders to power in democracies. Not intervention of armed forces. Why are they so fearful of elections. Because in October 2008 Maldives had the only free and fair election in the history of the Maldives that toppled the brutal regime. Still they fear a free and fair election. Why? Because they are addicted to their ways and they do not tolerate humiliation and exposure and election victories are alien to undeserving dictators under a free and fair election. Just could not wait till the next elections. Thus it is crystal clear that this fledgling democracy is yet to be liberated from the clutches of the old dictator. This is no surprise as it takes years even for political rebuilding after decades of centralized power structure that emerged through patronage and consolidation of power as the sole objective with nothing to deliver as an election manifesto.
    Anni symbolizes true peoples’ power . This is sacred to the young Maldivians and all for Islam and nationhood to the coming generations. He is to be given a full term as people’s vote mandated. If not the whole purpose of the constitution and democracy is defeated.
    Appearances are deceptive
    How would you rate killing of a lawful owner or obtaining a will forcibly in such a way that appears as if it is a legal will. Once the owner reaches safety and security and openly declares that he wrote the will only to save his life. The situation is such that by writing the will he did not stand to gain anything but the apparent heir did gain. What is the motive to write such a will when the owner clearly loses what he most dearly valued. This is about who benefits most by creating the false circumstance. Do you doubt? Some silent lawyers in the Maldives need to go back to lawful school and free themselves of ulterior motives. The greed will never leave integrity intact and there is no end to such a thirst. Where lawyers and learned fail, commonsense prevails. The scheming lot will miserably fail, they are doomed to fail.


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