PPM constituencies will be prioritised for development, says president

Constituencies represented by ruling coalition MPs will be prioritised for development projects in the state budget for 2016, President Abdulla Yameen has said.

During a visit to Meemu Atoll Dhiggaru to campaign for the Progressive Party of Maldives (PPM) candidate, Yameen yesterday urged Dhiggaru constituents to vote for Ahmed Faris Maumoon to ensure development.

“If you do this, no doubt when the budget comes, under the principle where constituencies with our members are prioritised now, this constituency will be noted very early on,” he said.

The by-election is scheduled for Saturday, June 6.

The PPM and coalition partner Maldives Development Alliance (MDA) controls a comfortable majority of the 85-house.

The rhetoric of the main opposition Maldivian Democratic Party (MDP) is unimportant for Dhiggaru constituents, Yameen said.

The MDP, the Adhaalath Party and members of the Jumhooree Party have been protesting for three months over the imprisonment of ex-president Mohamed Nasheed.

Yameen said Dhiggaru constituents wanted a seawall, new classrooms, and a school hall.

“[A] 140 kilowatt generator to ease the electricity problem in this island before Ramadan will be important for the people of this island,” he said.

The generator will arrive before Ramadan, and projects to establish water and sewerage systems in Dhiggaru will begin early next year.

An outer wall for the Dhiggaru football field will also be built in two months and a futsal pitch will be built during the year, he pledged.

President Yameen’s pledges follow PPM MPs assuring development of the five islands in the Dhiggaru constituency if Faris wins the by-election, prompting allegations of undue influence and bribery.

The PPM was previously accused of bribery over the delivery of an x-ray machine to Muli last month.

The government has also signed an agreement with the state-owned Maldives Transport and Construction Company to build a harbour in Dhiggaru.

The ruling party was also accused of vote buying after handing over air-conditioners to a school in Raa Atoll Alifushi, shortly before an island council by-election.

The government’s efforts to develop the Dhiggaru constituency will speed up and be made easier if Faris is elected, Yameen continued, as he would have the president’s ear and be able to share the concerns of his constituents.

In contrast, Yameen said, MDP MPs voted against the 2015 budget and had “hijacked” parliament since March to “obstruct” proceedings.

He also accused opposition-dominated island councils of refusing to allocate land to develop futsal pitches, stressing the importance of electing PPM councillors and lawmakers for cooperation with the government.

Faris is the president’s nephew and eldest son of PPM leader, former President Maumoon Abdul Gayoom. He will be facing MDP candidate Ahmed Razee and independent candidate Moosa Naseer Ahmed in the June 6 poll.

Dhiggaru is a PPM stronghold and a support base of the former president.

The by-election was triggered by the jailing of former MP Ahmed Nazim, also a PPM member. He was convicted of defrauding the former atolls ministry and imprisoned for life.

Yameen said Nazim had “sincerely served” the party and the PPM wished to keep hold of the seat.


INIA capacity will increase threefold with new runway and terminal, says economic council

Additional reporting by Hassan Mohamed

The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.

At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.

“The previous development concept was only for the development of the terminal,” says Saeed.

“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”

After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.

“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.

Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.

The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.

The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.

Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.

In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.

The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.

The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.

Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.

Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.

Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.

GMR Compensation

In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.

A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).

The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.

However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.

The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.

Chinese arrivals

Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.

However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.

“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.

Related to this story

Government seeks US$600 million from China and Japan for airport development

Tourist arrivals decline in January as Chinese arrivals slow down

GMR wins arbitration case, tribunal deems airport deal was “valid and binding”

Police arrest former President Mohamed Nasheed ahead of terrorism trial


Thumburi Guesthouse Island invites bids for hotel development

The Maldives Marketing and Public Relations Corporation (MMPRC) has invited developers to submit bids for beachfront hotel development at Laamu Atoll Thumburi Guesthouse Island.

Plots of 5,000 and 10,000 square feet are available for 25 years. The 5,000 square feet plots are to be given out at US$ 30,000 per year with a US$ 100,000 acquisition fee, while the 10,000 square feet plots are to be given out at US$ 66,000 per year with a US$ 200,000 acquisition fee.

An MMPRC announcement  said bidders must submit documents to the Thumburi project management section at the MMPRC office at Velaanaage in Malé by February 26.

The Thumburi project was launched earlier this year with the aim of making land available on the 17 hectare uninhabited island – as well as the linked Hulhiyandhoo island – for local investors to develop hotels, a diving school, water sports centres, restaurants, and shopping centres.


President Yameen announces development of five resorts in Haa Dhaalu Atoll

President Abdulla Yameen has announced plans to develop five resorts in the northern Haa Dhaalu Atoll next year.

Yameen said that the first islands to be developed as resorts by the current government will be located in Dhipparufushi, Vaikarumuraadhoo, Kanamana, Kudafaru, and Keylakunu islands in the country’s second-northernmost atoll.

During his visit to the northen atolls, President Yameen also talked about the government’s plans to develop an airport on Kulhudhuhfushi to further encourage the arrival of tourists.

Officials from the government promised the even distribution of resorts earlier this year following an online petition calling for the area to participate in the benefits of the country’s billion dollar tourism industry. Haa Dhaalu is currently the only atoll in the country without any operating resorts.

President’s Office Spokesperson Ibrahim Muaz told Minivan News of the strategic importance of Kulhudhuhfushi Island, which has a population of around ten thousand people.

“Projects like the proposed airport, resort development, and the I-Havan mega project will bring with it prosperous employment opportunities for the people residing the northern atolls, eliminating need of migrating to the capital Malé for employment,” said Muaz.

Muaz also noted that such projects, while providing numerous employment opportunities, would also develop the infrastructure in the region and improve the general living conditions in the North.

The UNDP’s most recent Human Development Report noted that disparities between the central and outer atolls were causing losses to human development, with the northern atolls reporting to suffer the most from limited job opportunities and social services.

Regional development

This year’s Avaaz petition – signed by just over 500 people – noted that the economic and societal problems of the 20,000 inhabitants of the atoll could be alleviated by the development of resorts.

The petition argued that the development of the region’s “pristine uninhabited islands” would halt the “mass migration” to Malé which was “tearing up the social fabric of our society”.

President Yameen’s election campaign pledged to develop 50 operational resorts during the five year presidential term. Yesterday’s proposed 2015 budget also planned for tourism growth, with 10 new resorts proposed in a MVR24.3 billion budget plan.

Despite the total number of resorts in the country exceeding one hundred, the majority are clustered around Malé and the country’s main international airport.

After initial plans for the 40-year-old industry’s development envisioned regional hubs, the introduction of sea planes has encouraged the concentration of resorts in the now-crowded central atolls.

The government’s plans for regional development have centered around the controversial SEZ bill, which it argues will decentralise development in order to promote regional growth – though the bill’s detractors fear that the policy will come at the expense of political decentralisation.

Relaxed regulations in the SEZs are intended to attract investors for a number of ‘mega projects’, including the iHavan – or ‘Ihavandhippolhu Integrated Development Project’ – in Haa Alif Atoll.

The project aims to take advantage of the strategic location of the Maldives’ northernmost atoll on a major shipping route – through which more than 700,000 ships carry goods worth US$18 trillion a year – and develop 5,700 hectares of land along with deep natural harbours.

Meanwhile, environmental NGO Ecocare has protested against the proposed Kulhudhuhfushi airport, pointing out that the airport’s development would destroy a mangrove area which would be reclaimed in order to build the airport.

Ecocare suggested a speedy ferry transportation system to Hanimaadhoo Airport which is just 16.6 km away after labelling the Kulhudhuhfushi airport as “economically less viable”.


Housing Ministry opens bid for Malé roads improvement project

Housing Ministry has invited national and foreign companies to participate in a bidding process to recruit a design and management consultant for the Malé roads improvement project.

In an announcement made today, the housing ministry stated that the government has decided to address the numerous issues of the poorly constructed roads in Malé.

A large portion of the roads were severely flooded in the heavy rainstorms last week with some of the roads having to be drained using pumps by the MNDF.

The deadline for submitting bids is November 19.


Tourism minister defends under-fire economic zones bill

With additional reporting by Zaheena Rasheed

Tourism Minister Ahmed Adeeb has responded to critics of his government’s Special Economic Zones (SEZ) bill, arguing that stimulating regional infrastructure will lead to long term development.

“I think the critics have got it wrong, they believe we are trying to centralise all the housing and everything to Malé – bringing all the people from here and there and then giving all those islands to corporates,” Adeeb told Minivan News today.

The SEZ bill – recently introduced to the People’s Majlis – gives the government the authority to relax regulations for foreign investors in designated regions, prompting fears that local autonomy will be lost.

Adeeb – also head of the cabinet’s economic council – said that his government strongly believed in a model of development followed by decentralisaton, arguing that the Maldives did not yet have enough resources to facilitate devolution.

“Land, labour, and capital – the central government and the regional governments are fighting for it as we don’t have enough resources even for the existing government to cover the budget deficits.”

“I believe when there’s enough economic activity we can give more powers to the councils,” he continued.

The aim of the bill was to encourage further development of tourism outside of the central atolls – or the ‘sea plane zone’, he added, referring to the proximity from Malé’s international airport.

“Even you see even President Nasheed’s guest houses, it’s getting centralised in Malé because it’s more feasible here,” he explained.

“I believe that by doing the SEZ Act, we will bring the investment to these regions and this is the real decentralisation of investments.”


The bill has been touted as a way to incentivise investors as the government works to attract new development after years of political instability.

“Our total focus in on economics – we are not running behind our political opponents and we have stopped political rhetoric now – we have stopped responding to that but we are responding to economic issues,” said Adeeb.

Envisioning up to nine zones designated by a 17-member board consisting largely of government officials, the legislation includes the development of industrial, free-trade, offshore finance, and high-tech zones.

Article 33 makes clear that, once designated an SEZ, local councils will no longer have authority over the area.

Adeeb explained that, while consultations would be held with local authorities, the details of the incentives granted to incoming investors would be at the discretion of the central government.

“There will be consultations with the local councils, but the decision making power will be here because we want to take decisions very fast and we want development as soon as possible.”

“If Singapore had been reluctant, and had not taken the decisions they had taken, they would never have reached the economic development they have,” he added.

Although the government has expressed hope that the move could pave the way to an economy less reliant on the tourism industry, Article 74 allows up to 40 percent of any zone to be tourist-related development.

The bill requires the Maldives Customs Service to formulate regulations for each zone, while a zone administration office will provide security services.

Article 77 mandates that only 10 percent of technical experts can be foreign, though this can be overridden by the investment board – which can also add a number of additional incentives to contracts such as extended tax relief, and leasing land to foreign companies for up to 99 years.

“It will be according to investment size and scope,” explained Adeeb. “The law gives the power to give even one hundred percent of those [incentives] but that doesn’t mean that the government will act on that.”


The bill’s most prominent skeptic so far has been MMA Governor Dr Azeema Adam who has suggested that, without enhancing local employment, the bill will offer little immediate regional benefit the regions.

“In the special economic zones, developers have the right to bring any amount of expatriate workers as well, so we might be able to generate jobs, but if those jobs go to expatriates we are not going to reap the benefit of such development activities,” said Dr Azeema – who will sit on the investment board should the bill be passed.

Salma Fikry, a former recipient of a President’s Award for services to decentralisation, has suggested that the bill works against the spirit of devolved government – shifting power from elected representatives to corporations.

“Corporations don’t work for the public good, they work for corporate profit. Is Adeeb saying he is satisfied with trickle down economics?” she asked.

“This is leading the ownership of this country’s resources into the hands of a handful of corporations driven by the quest for short-term power and financial gain. It is not sustainable nor empowering for the Maldivian population,” continued Salma.

Elsewhere, the decentralisation advocacy group the Rajjethere Meehun Party has described the bill as “a monster in the making”, while members of the social community ‘The Maldivian Economist’ have questioned the bill’s logic.

“If it is for other industries, why so many benefits to tourism sector in SEZ bill?” asked the group, noting that the industry is currently thriving – with resorts often in close proximity to local councils.


Vice President to seek investors during China visit

Vice President Dr Mohamed Jameel Ahmed left on an official trip to China yesterday evening (June 4).

During the visit, Jameel will attend the 2nd China-South Asia Expo and the 9th China-South Asia Business Forum, revealed the President’s Office. Jameel is also scheduled to meet Vice Premier of China, H.E Wang Yang. ‎

Prior to his departure, Jameel told press that he would meet with members of the Chinese business community in order to find potential investors for his government’s proposed development projects.

President Abdulla Yameen has promised a number of ‘mega-projects’ during his term, pledging legislation to create a more welcoming investor climate, and organising a landmark investment forum in Singapore in April in order to find potential foreign investors.

The projects showcased in Singapore included the Ihavandhippolhu Integrated Development Project, the expansion of Ibrahim Nasir International Airport, the relocation and expansion of the existing central port, and exploration for oil and gas.

During his state visit to Japan in April, Yameen also met with prominent businessmen, economists, and industrialists.

Jameel will discuss the government’s plans with the Chinese Government, which was said to be keen to hear about the plans.


Development projects speed up in central atolls

The government has this week signed contracts with Maldives Transport and Contracting Company (MTCC) for the reclamation of Guraidhoo and Madifushi islands, both in Thaa atoll.

In Guraidhoo, MVR75.2 million (US$4.8 million) will be spent on reclamation of 27.5 hectares of land, while 45 hectares will be reclaimed from Madifushi with a budget of MVR126 million (US$8.1 million).

Meanwhile, the mayor of Addu has said that the city – the country’s second most populated area with over 30,000 inhabitants – is being hit hard by government budget cuts.

Development projects have to be approved by the Ministry of Environment through an Environment Impact Assessment (EIA)  -which is reviewed by the EPA. Minivan News has learned that the EIA for the Guraidhoo land reclamation was approved within four working days.

Earlier this month the government signed contracts with Boskalis International for the reclamation of four islands – Eydhafushi, Thulusdhoo, Dhaalu Meedhoo, and Kudahuvadhoo.

The combined projects will cost MVR572 million (US$37 million). The work is expected to begin within a month of signing, and to be completed within 540 days.

Abdulla Sodig has said that the MVR700 million that was approved by the Housing Ministry to be included in the budget for Addu City later disappeared when the government sent the budget to parliament for approval.

“Hithadhoo harbor project that started in 2011 is on halt now, we still need another MVR3.5 million for that. But only MVR1.5million was allocated for that. Similarly, Hulhumeedhoo harbor project is also on halt now,” Sodig said today.

Other projects budgeted for Addu City development include road construction with MVR10 million and MVR25 million for water and sewerage, an amount Sodig claims is insufficient.

Compared to Addu’s large urban population, the average population of the six islands involved in the proposed reclamation projects is approximately 1,300.

Addu City has long been a stronghold of the opposition Maldivian Democratic Party – a fact reinforced in recent local council elections, while the six islands involved in the proposed reclamation projects, with the exception of Meedhoo, all gave majority votes to President Abdulla Yameen in the 2013 elections.


President calls on Majlis to expedite revenue raising measures

President Abdulla Yameen has said development projects can only be spoken of after the People’s Majlis passes revenue raising measures.

Yameen said  that in order to speed up the bills, a request for parliament sittings during this recess period had been submitted with signatures of twenty six members of parliament.

“God willing, when the revenue related bills are passed next week the projects in atolls will speed up,he said.

The Majlis in December passed a record MVR17.95 billion budget of which MVR3 billion is to be realised only after the parliament approves revisions to existing legislation.

The measures include hiking Tourism GST from 8 percent to 12 percent, revising import duties, continuing tourism bed tax for one more year, raising airport departure charge for foreign passengers from US$18 to US$25, leasing 12 islands for resort development, introducing GST for telecommunication services, and obtaining resort lease payments as a lump sum.