Additional reporting by Ahmed Naish.
Nexbis has said it will challenge parliament’s decision instructing the government terminate a Border Control System (BCS) project signed under the previous administration.
The Malaysia-based IT group has said it will seek a court injunction preventing any attempts to cancel the agreement whilst court hearings over the contract were still ongoing.
Speaking to local media on Tuesday (December 25), Home Minister Dr Mohamed Jameel Ahmed claimed the government would respect parliament’s unanimous decision to halt the BCS project agreement with Nexbis.
Dr Jameel told local newspaper Haveeru that it was “difficult to come up with an exact figure at present” for the level of compensation the government would potentially have to pay Nexbis after prematurely terminating a contract with the company.
The home minister was not responding to Minivan News at the time of press.
Yesterday’s vote on the deal was taken after Parliament’s Finance Committee claimed there had been foul play in the agreement signed between Nexis and the Maldives immigration department.
Prior to the parliamentary vote, an official spokesperson for Nexbis told Minivan News on December 23 that the company would “challenge” any decision by the Majlis to halt the BCS contract while court hearings were continuing in the country.
“We are asking the Supreme Court to intervene with the decision as we have come to be aware that the contract cannot be legally terminated if there is an ongoing legal case. Presently we have legal cases in the Civil Court, the High Court and the Supreme Court,” the Nexbis source added.
Meanwhile, Director of the Department of Judicial Administration Ahmed Maajid today (December 26) confirmed that to his knowledge, Nexbis was currently involved in ongoing cases within the Maldives’ judicial system.
Maajid added that on a legal basis, the contract between Nexbis and the government could not be terminated until all proceedings involving the company were concluded.
“There is a provision in the Judicature Act under Law 22, 2010 that basically states no public body can terminate a contract with a company that is involved in judicial proceedings in the courts,” he said,
“The government has made their decision based on the the Majlis’ vote. But the legality of that decision can be challenged at the Civil Court if Nexbis submit a case. They have a constitutional right to do so.”
The MVR 500 million (US$39 million) BCS project moved ahead this year after a series of high-profile court battles and delays that led Nexbis to last year threaten legal action against the Maldivian government should it incur losses for the work already done on the project.
The Malaysia-based mobile security provider has come under scrutiny by political parties who claim that the project is detrimental to the state, while the Anti-Corruption Committee (ACC) has alleged corruption in the bidding process.
Nexbis has denied any allegations of wrong doing within its contract.
Amidst these concerns, parliament voted unanimously yesterday (December 25) to instruct the government to terminate the border control project agreement with Nexbis.
All 74 MPs in attendance voted in favour of a Finance Committee recommendation following a probe into the potential financial burden placed on the state as a result of the deal.
Presenting the Finance Committee report to the floor, Chair MP Ahmed Nazim explained that the “main problem” flagged by the ACC was that the tender had not been made in accordance with the documents by the National Planning Council authorising the project.
The documents were changed to favour the chosen party and facilitate the deal, Nazim said, which the ACC considered an act of corruption.
Regarding allegations of corruption within the contract, the Nexbis source told Minivan News that the company is “systematically denying” any allegations of corruption, adding that if there was any foul play within the contract “we were unaware of it”.
Nazim stressed that the Finance Committee inquiry focused on the financial burden on the state and had discovered that the government would have to pay US$166 million to Nexbis over the course of the agreement.
Conversely, he claimed that the Maldivian government would only earn US$8 million as royalties during the agreement period.
Nazim noted that the Finance Ministry informed the committee that it was yet to receive a copy of the agreement two years after it was signed.
The Finance Ministry has also not included any funds in either the 2012 or 2013 budgets to pay for the project.
Nazim also accused the then-attorney general of “negligence” in the deal as he had not provided an official legal opinion to the Immigration Department in writing.
Recommendations by the former attorney general to amend the agreement could not be found in the documentation, he added.
Nazim said the Finance Committee concluded therefore that the best course of action would be to terminate the Nexbis agreement and install a different border control system at the earliest date.
Following the Finance Committee decision, the budget review committee has included a recommendation compelling the government to terminate the Nexbis agreement.
The Finance Committee also recommended terminating the agreement over concerns it contained clauses to waive taxes to the company, Nazim said. He noted that imposing or waiving taxes was a prerogative of parliament under article 97(d) of the constitution.
During the ensuing debate, MPs from both the formerly ruling Maldivian Democratic Party (MDP) and government-aligned parties spoke in favour of terminating the agreement.
Along with the decision to terminate the Nexbis deal, the government of President Dr Mohamed Waheed Hasaan Manik late last month also opted to void an airport development agreement with India-based infrastructure group GMR.
The GMR contract, a 25-year agreement to develop and manage an entire new terminal at Ibrahim Nasir International Airport (INIA), was the single largest foreign investment project in the country’s history.