J Hotels and Resorts to sue government

J Hotels and Resorts intends to sue the government “at length” over the Cabinet’s decision to terminate the contract for Laamu Gan Asseyri Project, which was awarded in October.

Company chairman and former ruling party MP Abdulla Jabir said no explanation for the termination was given, and claimed it was not the first time that the Cabinet had retracted a decision.  He said he had “strong suspicions” of corrupt dealings.

“There are ruling party members who decided that they want the project, so they forced the President to terminate my contract through the Cabinet. The Cabinet is unfit to operate, it is just playing games on its high chair in the Maldives,” Jabir said.

The project was won via bidding and awarded on October 12 of this year. It includes a 50-year lease of 25 hectares for the development of hotels and 79 guest houses containing a total of 1,500 beds. Restaurants, spas and sports facilities were also included in the project plan.

Originally, a joint venture company was to be created with the government, which would earn a five percent share, and J Hotels and Resorts. State Minister for Tourism Thoyyib Mohamed was previously reported saying the government preferred a private party to develop and manage the whole project, but the ministry had a ‘Plan B’ to lease out separate components of the project to different parties.

According to the government gazette the Cabinet decided to terminate the contract on November 29, and has lately decided to re-open the bidding process.

Minister of Tourism Mariyam Zulfa was unavailable for comment, however Permanent Secretary Ahmed Solih said the ministry had sent its reply to J Hotels and emphasised that the issue now lies between the Ministry and the company.

Jabir warned that the Cabinet’s decision was one of several factors that was causing a dip in investor confidence.

“These are expensive games, for the investors and for the Maldivian people,” he said. “The government is losing credibility doing this. I am disappointed that the Maldivian government is dishonoring its agreement.”

According to Jabir, the contract between J Hotels and the Ministry of Tourism was valid under Maldivian contract law.

“We have incurred losses of income and opportunity, and our lawyer is assessing those losses now,” Jabir said, reiterating that the company plans to sue the government.

He further claims that a contract cannot be terminated unilaterally, as the Cabinet has done, and that the government cannot accept bids for a project which is the active subject of a lawsuit.

Jabir was unable to provide further details regarding losses incurred.

Last week, the Cabinet instructed the Attorney General’s Office to monitor allegations of corruption made against the government, and file defamation lawsuits where such allegations were proven unfounded.

The Cabinet’s request follows growing concern that some such allegations are being made for political purposes. Meanwhile, the acrobatics of local politics could have a detrimental effect on foreign investment.

At the same time, the government has been tasked with improving its latest ratings in Transparency International’s 2011 Corruption Perception Index (CPI), which were less than favorable.


9 thoughts on “J Hotels and Resorts to sue government”

  1. Its mismanagement Minivan. The President is surrounded by advisers who do everything on an ad-hoc basis.

    A holistic thinker is missing throughout the whole cabinet. True Nasheed is not a bad politician and PR gimmicks are his forte. However the gist of the matter is that PR alone cannot sustain a government. Transparency and openness have laid most of Nasheeds government bare with regards to populist issues such as petty corruption.

    However economic indicators hidden to the rest of the population show a clear picture. This government is done for.

  2. Laamu Atoll is a political hot spot for investment.

    (1) Mariya's husband - Amir has an investment in guest houses on gan
    (2) Reeko Moosa has the lease of Green Hotels on Kadhdhoo domestic airport
    (3) Sarangu Adam manik has a 300 room resort island and city hotel on Gan island
    (4) group x Sappey has the lease of the transportation network island project

    3 is a crowd, 4 is a gathering and jabir as no.5 labels laamu atoll "politically poisonous!"

  3. Zulfa and Thoyid were playing game for president. not bomb explode in hand. Mariya's husband want land ownership becoming in Laamu.

  4. This is same old story. Jabir will sue the Government for millions of dollars and the government will pay it. Then it will be distributed with Jabir, Reeko, Mariya and Anni. This something similar to what happened with MTDC. MTDC decided to settle the Jabir case outside the court and gave millions of dollars to Jabir and the money was distributed with the top officials of MDP and MTDC board. almost Similar thing is Reeko doing with the Thilafushi board as well. All courrupt people.

  5. Fact 1: Tourism did not conduct a bidding process for laamu Asseyri.

    Fact 2: J Hotels did not show interest in the project when Tourism called for Expression of Interest on project.

    Fact 3: J Hotels did not form a Joint Venture Agreement with Govt to allow any tourism lease agreement without a tender process.

    Fact 4: J Hotels does not have a lease agreement for a cabinet decision to terminate a lease contract


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