Tag: development

Services halted, Maldivians deprived of progress following “coup”: Nasheed alleges

An array of services formerly provided by the Maldivian government have stopped since President Dr Mohamed Waheed came to power, former President Mohamed Nasheed has alleged.

Nasheed, speaking in local media, has accused the Waheed administration of depriving the Maldivian people of “one and a half years of prosperity” and progress since his government ended following the controversial transfer of power February 7, 2012.

Despite the criticisms, President Waheed has in recent days been touring North Maalhosmadulu Atoll to view developments such as sanitation and education projects that are currently being undertaken by the state.

However, Nasheed alleged that all of the initiatives launched under his administration have since been halted by Waheed’s government, which he said came to power under the guise of protecting the “nation and religion”.

“Every island that I go to, I see commenced projects unfinished. Harbours have come to stop. Sewerage systems have come to a stop. The change of school sessions to a single session have come to a stop. Aasandha has become a Baasandha. Transport has come to halt, everything has stopped. So I think Waheed’s campaign slogan is ‘halted’,” he was quoted as saying by Sun Online.

“President Waheed has neglected the most prosperous one and a half years of this nation. Since my government was changed through a coup, I can only perceive this coup [government] as something that has come to halt,” said Nasheed.

Nasheed was reported to have made the comments during an MDP “Dheythin Fahethi” campaign event on Kurendhoo Island in Lhaviyani Atoll.

President’s Office Media Secretary Masood Imad and Spokesperson Ahmed ‘Topy’ Thaufeeq were both in meetings and could not respond to calls from Minivan News at time of press.

Revenue through tourism

Speaking Friday (April 12) on the island of Rasgetheemu on North Maalhosmadulu Atoll, President Waheed pledged to develop local islands in the area into resorts to help enhance social welfare for local people.

The president claimed that revenue generated through taxing these resort properties would then allow the state to spend a proportionate amount of funds on benefiting nearby islands, while also providing employment for young people.

Pointing to the potential development opportunities provided by tourism, President Waheed also slammed the efforts of “the group of people calling for the boycott of Maldives tourism”.

“In the past one and a half year, a group of people have continuously attempted to defame the Maldives and called upon tourists not to visit the country” he stated.

Boycott calls

In addition to concerns about a recent avaaz.org petition threatening a boycott of tourism in the Maldives – which has now been signed by over two million people since its launch -Waheed also condemned individuals making “false allegations on human rights abuses”.

Dr Waheed urged the Maldivian public to be aware of any such attempts to “destroy the Maldives’ tourism industry”.

The Avaaz petition is calling for legal reforms in the country after a controversial flogging sentence was handed to a 15 year-old rape victim who admitted to having consensual sex with an unnamed man during a police investigation.

The government of President Dr Mohamed Waheed has pledged to appeal the sentence given to the minor by the country’s Juvenile Court, while also reviewing local laws to enact potential reforms over the use of flogging. No time-line for such reforms has yet been set beyond the commitment to hold talks.

In a letter published on Minivan News earlier this month, Avaaz.org Executive Director Ricken Patel insisted that the organisation had not called for a outright tourism boycott.

“What we do stand ready to do, however, is to inform tourists about what action is and isn’t being taken by the Maldives government to resolve this issue and change the law, and to identify those MPs and resort owners who are using their influence to push for positive change – and those who are not,” Patel said.

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Government gazette to be online only publication from March 1, 2013

The President’s Office has announced it will discontinue producing a print edition of the government gazette from next month in favour of publishing the document online.

According to the President’s Office website, the decision to cease printing of the government gazette from March 1, 2013, has been taken as part of efforts to reduce state expenditure.

The online edition of the gazette, which will continue to outline cabinet policy, legislation as well as other state developments and vacancies, can be read here.

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Stalled hotel development costing MVR 24 million annually: MTDC

Over MVR 24 million (US$1.5 million) is being lost annually by the Maldives Tourism Development Corporation (MTDC) on a stagnant hotel development in Uligamu in Haa Alif Atoll, it has been revealed.

MTDC Managing Director Mohamed Matheen told Minivan News that the corporation had been making losses on the City Hotel development after construction was halted half way into the project in 2010.

Matheen revealed that along with the City Hotel project – which had cost MVR 120 million (US$ 7.8 million) to develop it to its present state – MTDC’s Herethera Resort had also made a MVR 386 million (US$25 million) loss.

The land for City Hotel was leased to MTDC by the government on February 27, 2007, after which construction on the 100-bed hotel began. According to the 2010 annual report by MTDC, the project was halted after just 40 percent of the development had been completed.

“There have been certain issues to contend with in the project’s development. We have had some difficulties in attracting investors because of the US$1.5 million land rent and problems with the possibility of serving alcohol on the island.

“The previous board of directors had decided to terminate the contract as the land rent is costing too much. However I have made a lot of progress in trying to change that, and City Hotel can be completed by the end of this year,” Matheen claimed.

According to the MTDC website, the Maldives government has leased nine islands to the company “at a rate substantially below the market rate”. MTDC’s 2008 annual report stated that the company has over 21,000 shareholders making it one of the largest public companies in the Maldives.

In November last year, shareholders of MTDC expressed concern after the company failed to pay dividends for three consecutive years while also recording a net loss for the first time in 2011, local media reported.

Minivan News visited the City Hotel development last month with a surveyor who had worked and lived on the site in 2009.

Minivan News witnessed that the entire development, including the inside of staff and residential quarters, had become overgrown with vegetation. Assorted earth-moving machinery was idle and in disrepair.

The MTDC Managing Director stated that MVR 80,000 (US$5,181) per month – MVR 960,000 (US$ 62,176) per year – is currently being spent on the “upkeep” of the development.

“We have 14 people looking after this facility, but it seems they are not able to keep the overgrowth down.

“With another seven to eight million dollars this development would be complete. It won’t cost us much to remove the overgrowth and the rooms were already completed to their rafters. It would involve minor repairs,” Matheen added.

According to the former surveyor – speaking on condition of anonymity –  construction was halted due to external pressures from conservative religious groups regarding the sale of alcohol on an inhabited island.

Asked about this issue, Matheen said discussions had taken place with native islands , however they were “divided” on the issue of alcohol sale.

“The bread and butter of the Maldives is definitely tourism. We are maintaining [Maldivians’] livelihood through tourism, and tourists want different products other than just sun and sand.

“Ninety-nine percent of tourists are drinkers, they are not coming here for many activities, and they are coming for relaxation and peace of mind. We have to cater to their needs,” Matheen added.

A committee formed by Uligamu islanders had submitted a court case regarding the halted development, according to Matheen.

“The island committee is not happy. They also think the development is controlled by the government when the majority is controlled by public shareholders. The government is not a major shareholder.

“The case is a pressure tactic. They think we have the money and they think we are purposefully not building here. They don’t accept the reality of the situation,” Matheen added.

In January 2012, local media reported that five people have been arrested in a youth-led demonstration at Uligamu against MTDC.

The protestors had demanded a reason as to why the development of the City Hotel had ceased, according to local media reports.

Matheen said that he was attempting to reduce the land rent costs as stipulated in the Tourism Act and that a new survey report of Uligamu is to be submitted this year.

US$25 million loss in Herethera Resort

Herethera resort – owned and operated by MTDC – was also said to have made a US$25 million loss following a series of “logistical issues”, Matheen said.

“We had pumped US$53 million into Herethera, however we are paying US$2 million in land lease and our operating costs are nearly 17 percent higher than resorts in the Male’ area because of location being so far away.

“When I took over this role in July, we did not have a single booking at the resort. Now we are fully booked until February 17,” Matheen said.

The MTDC Managing Director revealed that while no other resorts owned by MTDC are currently working at a loss, he admitted that because of the locations of the properties in the far south and far north, there were certain infrastructure issues.

Last month the bidding period for the management or purchase of Herethera Resort was been extended for the third time by the MTDC.

The company has not stated why the bidding period prior to this one ceased, but in previous instances the company said it had to cancel bids due to a lack of interest from potential investors.

ONYX, a company from Thailand, managed the resort until February 2012.

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Government takes over airport, evicts GMR

Indian infrastructure giant GMR has handed Ibrahim Nasir International Airport (INIA) over to the state-owned Maldives Airports Company Limited (MACL), after the Maldivian government voided the concession agreement and gave it seven days to leave the country.

The sudden eviction of the developer – which won a 25 year concession under the former government to manage and upgrade the airport – scraps the project, which at US$511 million was the single largest foreign investment in the Maldives.

GMR had clung to the terms of its concession agreement while the government fanned growing nationalistic and anti-India sentiment. On November 27, President Mohamed Waheed’s cabinet declared the agreement ‘void ab initio’ – invalid from the outset – and ordered the developer to leave.

With arbitration proceedings already underway in Singapore over the contested airport development charge (ADC), GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.

On December 6, a day prior to its eviction, the government successfully appealed the injunction in the Supreme Court of Singapore. Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

That verdict, effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”.

A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.

Following a meeting with staff yesterday, GMR issued the following statement:

“In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nasir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight.

GMIAL has been assured that as a result of this takeover all its employees, suppliers and other interested parties will not be put to any inconvenience. GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010.

All actions as above are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up.”

An invitation-only press conference to mark the handover was held by Defence and Acting Transport Minister Mohamed Nazim in the airport VIP lounge at midnight. Minivan News understands that GMR did not participate for legal reasons.

During the ceremony, Finance Minister Abdulla Jihad presented the official handover documents to MACL Managing Director Mohamed Ibrahim, and said that the Maldives would pay whatever compensation was required “however difficult”.

Economic Minister Ahmed Mohamed claimed the eviction would enhance investor confidence:

“Investor confidence will only increase when they know that Maldives will do everything in accordance with the law,” Haveeru reported the minister as saying.

Attorney General Azima Shukoor expressed hope that the compensation would be lower than anticipated.

Estimates as to the amount of compensation for which the government is liable have ranged from the US$220-240 million GMR estimated it has already invested, up to US$700 million – a sizeable chunk of the country’s GDP.

Apart from the size of the compensation is the Maldives’ ability to ultimately pay, given the crippled state of its domestic economy.

Finance Minister Jihad in late October warned that the Maldives would be unable to pay government salaries without a promised US$25 million loan from India.

A month later, amid rising anti-India sentiment over the GMR issue and a diplomatic incident triggered by the government’s spokesperson, Jihad described India’s calling in of US$100 million in existing loans as “not a major concern”. The debts, he said, would be paid from the state’s reserves, which local media at the time reported could fall to as low as US$140 million (MVR2.2 billion) once the payments to India were settled.

An International Monetary Fund (IMF) delegation in November warned that the Maldives’ financial reserves “have been declining slowly, [and] now account for just one and a half months of imports, and could be more substantially pressured if major borrowings maturing in the next few months are not rolled over.”

Further pressure on reserves came from a ballooning public debt ratio, “which now stands at over 80 percent of GDP, and has helped to boost national imports, thus worsening dollar shortages in the economy and putting pressure on reserves,” the IMF warned.

Presenting the 2013 budget to parliament in late November, Jihad warned of “bitter consequences” should the spending trend continue.

His target budget deficit of 6.1 percent in 2013 takes into account a raft proposed revenue raising and cost cutting measures which would impact the tourism industry – such a proposed tourism GST increase to 15 percent – and require parliamentary approval.

Further modernisation of the airport – or even completion of the existing upgrade – is likely to require extensive outside assistance or further loans. The rusting foundations of GMR’s new terminal sits on 60 hectares of newly reclaimed land on the airport island, after the government ordered a halt to the development in August. Large sections of the old terminal remain boarded up for construction work, which the government’s ability to proceed with is in doubt.

Further modernisation of the airport is likely to depend on outside assistance. President’s Office Spokesperson Masood Imad told Indian newspaper The Hindu yesterday that after reclaiming the airport, the government would again float a tender for its modernisation “and get more parties in to take the work forward.”

“The tender will be floated by the Maldives government in a transparent manner and after consulting investors. The mistakes made during the float of the tender which has been cancelled will not be repeated,” Imad told the paper.

Environment Minister Dr Mariyam Shakeela has meanwhile separately appealed to China for financial and technical support, telling journalists from the Chinese government’s authorised web portal China.org.cn that the Maldives “needs funds for infrastructure building.”

“We are obviously in need of funds and technical assistance as we do not have the financial means, the technical know-how or the capacity to address these huge climate change issues,” said Mariyam, in an appeal for assistance with climate adaptation.

The government has dismissed speculation Chinese involvement in the development, however Minivan News has learned that senior Chinese military officials landed at the airport in the tense week leading up to the handover, even as India warned of “adverse consequences” should the government proceed with forceful eviction.

India’s reaction after the Singapore Supreme court ruling was muted. Ministry of External Affairs Spokesperson Syed Akbaruddin said the ministry was “studying” the judgement and that their lawyers “need to understand it”.

“There are two issues in the case – one the sovereign right of a nation and other the legality of the agreement, which was linked to compensation to GMR and its associates in Malaysia, he said the latter part has not been “affected or responded” in today’s judgement.

“These issues are not affected with the judgement or not responded to. Fulfilment of all legal process and requirement is what we want to see in this case and we hope that all relevant contracts and agreements would be adhered to and all legal process are carried through,” he said.

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UN defends role in Maldives, emphasises “political impartiality”

The Office of the UN Resident Coordinator has issued a statement defending the UN’s activity in the Maldives and reiterating its “strict impartiality toward political parties”.

The statement follows a recent accusation from the Maldivian Democratic Party (MDP) that while “the IPU, CMAG, Canada, the Human Rights Committee, the EU and certain international NGOs such as Amnesty International and the International Federation for Human Rights have expressed varying degrees of alarm at the Maldives’ backsliding on democracy and human rights, others including the UN Resident Coordinator and the Office of the High Commissioner for Human Rights have remained shamefully silent.”

“Since February’s overthrow of the Maldives’ democratically-elected government, key parts of the international community have remained silent regarding the widespread human rights violations taking place,” the party’s spokesperson, MP Hamid Abdul Ghafoor, said in a statement.

“To remain silent in the face of injustice is to be an accomplice to that injustice,” he added.

In a statement released on Sunday, the UN said it “continues to be concerned that the current situation in the country may have an impact on the country’s development”, and noted examples of the international organisation’s activities in the Maldives.

“As a trusted partner, the UN has spoken repeatedly in public and in private over the course of several years and three governments on democracy, development, and human rights. Most recently, the Secretary-General spoke of the need for political dialogue, national reconciliation, and respect for the constitution. He called on all parties to exercise maximum cooperation and restraint,” the UN stated.

“The High Commissioner for Human Rights and Special Rapporteurs have engaged robustly and provided considerable support over the years on human rights, which has been further strengthened by the recent deployment of a human rights adviser,” the statement noted.

“The UN team in Maldives, led by the Resident Coordinator, works as part of the larger UN strategy focusing on development, human rights and support to democracy. Our primary and overriding interest is to work for the development of the country and the betterment of the lives of its people. It does this on the basis of a programme of cooperation signed with the government in the interest of the people of the Maldives. We do our work with national institutions in government and civil society, the private sector, and directly with communities.

“The UN team has been deeply engaged in building national capacity, and in urging and assisting Maldivians to take the lead in overcoming deep rooted national challenges. We will continue to provide support and advocate vigorously a renewed focus for development that builds on the gains of the past, and focuses on the needs of the country,” the organisation stated.

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JP MP Jabir raises Maldives investment fears over lack of resolution in GMR dispute

Jumhoree Party (JP) Deputy Leader Abdulla Jabir has criticised attempts to “politicise” the dispute between the government and India-based GMR over an agreement to develop Ibrahim Nasir International Airport (INIA) – fearing a negative impact on foreign investment.

The claims were made as the government-aligned Adhaalath Party (AP), which promotes religiously conservative values in the country, has continued to call on fellow coalition partners including the JP to take part in a series of “events” in the capital to protest against GMR’s development of the airport.

Speaking to Minivan News, Jabir, who is also a serving MP, highlighted the importance of maintaining an “investor friendly” atmosphere in the Maldives despite calls by some of the JP’s government coalition partners to re-nationalise the airport.

The MP said he instead advocated for sitting down and trying to find a compromise between the government and GMR, which is contracted to develop and run the airport for 25 years.

The dispute has centred, in part, over concerns like a disputed US$25 Airport Development Charge (ADC) that was to be levied on each passenger travelling through the site. GMR has maintained the the charge was contractually agreed, but later offered to exclude Maldivian nationals from paying it after the matter was contested in the country’s courts.

With the dispute unresolved, Jabir said he had sent a request to the Public Accounts Committee of the People’s Majlis for a review of the contract signed between GMR and the government of former President Mohamed Nasheed to “better understand” the agreement.

Several former opposition parties now serving in the government of President Dr Mohamed Waheed Hassan have continued to raise allegations of possible corruption behind GMR’s bid to develop INIA – allegations refuted by the company and the former government.

Jabir maintained that discussion and analysis, rather than politicised rhetoric in the media and at public events, would be required to move forward with the issue in a manner that did not damage future investment opportunities.

“We need an investor friendly environment here. Politicians should be here to resolve issues not complicate them further,” he said. “Any allegations of misconduct should be investigated, but we should be able to sit down and discuss a resolution. Yet many people do not know about or even understand the deal that has been signed.”

Jabir claimed that the GMR contract should therefore be viewed as a business issue rather than a political problem, something that he claimed would require greater parliamentary understanding of the agreement signed by the former government.

Under the terms of the agreement – a US$511 million deal that represents the largest ever case of foreign investment in the Maldives – GMR agreed to a 25 year concession agreement to develop and manage the site, as well as to overhaul the existing terminal by the end of this year.

The document was overseen by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private sector projects in developing countries.

However, the Maldives government earlier this month accused the IFC of negligence during the bidding process for INIA – allegations there were rejected by the organisation.

Both the government and GMR are presently involved in an arbitration case in Singapore over the airport development.

Coalition response

The coalition parties making up the government of President Dr Mohamed Waheed Hassan have at times appeared divided over how to proceed in regards to GMR the contract.  Some parties like the Adhaalath Party have advocated to gather in Male’ as part of a rally next month calling for the airport to be “returned” to the Maldivian people.

Speaking to local media earlier this month, Adhaalath Party President Sheikh Imran Abdulla said that a ‘mass national gathering’ would be held at Male’s artificial beach area on November 3 at 4:00pm to coincide with Victory Day.  Victory Day is held in remembrance of a failed coup attempt that was thwarted in 1988.

Sheikh Imran told the Sun Online news service that the gathering was devised as part of ongoing attempts to try and “reclaim” the airport from GMR.  Imran was not responding to calls from Minivans News at the time of press.

Minivan News was also awaiting a response from Abdulla Ameen, Secretary General of the government-aligned Dhivehi Qaumee Party (DQP) at the time of press concerning its response to the proposed gathering.  The DQP had previously published a 24-page book claiming that the former government’s lease of INIA to GMR was a threat to local industry that would serve to “enslave the nation and its economy”.

Meanwhile, the Dhivehi Rayyithunge Party (DRP) claimed last month that while it held issues with the overall benefit to the Maldives from the GMR deal, “due process” had to be followed through proper legal channels in order to establish if any wrong doing had occurred with the airport contract.

Parliament review

JP Deputy Leader Jabir himself this week criticised certain high-profile political figures in the country over their response to the GMR contract.  He accused some of these figures of not “knowing what they are talking about” in regards to the deal, highlighting the need for a review of the agreement within the Public Accounts Committee.

Jabir was particularly critical of the Adhaalath Party’s response towards the GMR issue, which he claimed had complicated finding a resolution.

“Sometimes they are religious experts, sometimes they are financial experts. But everyone loves Islam here. Right now, foreign investors are finding it difficult to understand the climate here. This is not a perfect time for this issue to be happening with GMR,” he said. “I think these protests [against GMR] are unrealistic.”

Jabir claimed that from his experience as both a parliamentarian and business owner in the country, there was “no such thing” as a deal that cannot be renegotiated.

“However, if there is no talking then the country is only losing money whilst people take to the streets,” he added.

Earlier this month, INIA CEO Andrew Harrison told Indian media that the company had received no official word from the Maldivian government concerning a resolution to the dispute.

Yet despite MP Jabir’s concerns about the potential impacts the ongoing dispute over the airport development might have on future foreign investment, one national trade body recently played down fears that GMR’s case was proving to be economically detrimental to the Maldives.

The Maldives National Chamber of Commerce and Industries (MNCCI) claimed last month that legal wrangling between the government and GMR over the multi-million dollar airport development was not adversely harming confidence in the country’s “challenging” investment climate.

MNCCI Vice President Ishmael Asif contended that ongoing legal disputes linked to both the GMR agreement and another high-profile contract to manage a border control system with Malaysia-based Nexbis were not among concerns foreign investors had raised with the chamber.

“GMR has nothing to do with the investment climate here, at the end of the day it is a personal concern for the company and more a matter of local politics,” he claimed.

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Vice president praises Chinese significance to Maldives development

Vice President Mohamed Waheed Deen spoke yesterday at a ceremony marking 63 years since the People’s Republic of China was founded, expressing gratitude for the technical and economic assistance the Maldives had been provided and pledging further cooperation between the two nations in the future.

At the special reception held at Trader’s Hotel in Male’ yesterday, the vice president also praised the speed and nature of democratic development within China – something he hoped to see emulated in the Maldives.

“I have no doubt your country is going in the right direction and leading the world,” he told attendees, which included business figures, senior government representatives and diplomats.

“Even if you look at the political changes in china they have proved that they are taking patient, calculative, constructive and very objective directions and I believe that is how the democracy must be developed, not very hastily.”

The vice president, a local philanthropist and owner of the Bandos Island Resort and Spa, also praised the growing economic significance of China to the Maldives in terms of trade and tourism income.

“I am pleased to note that China is currently the number one tourist market for the Maldives and I hope that the number of Chinese tourists travelling to the Maldives will continue to increase,” he said. “In addition, trade between the Maldives and China has increased significantly in the past few years and China remains one of the largest trading partners of the Maldives.”

The reception was the first of its kind to be held by China in the Maldives since the country opened its first full diplomatic mission in Male’ last year.

According to the vice president, 2012 also marks 40 years since China and the Maldives first established diplomatic ties.

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Business as usual at Maldives guest-houses after authorities issue “cautionary circular”

The government has insisted city hotels and guest-houses established on the Maldives’ inhabited islands remain open today, after a local media report suggested authorities had revoked the right of local councils to operate tourist properties on their land.

Sun Online reported yesterday that the opposition Maldivian Democratic Party (MDP) had called for an emergency debate in the people’s Majlis against an “order” by the Ministry of Tourism, Arts and Culture to cease the “operation of guest houses and hotels”.

MDP Chairperson and MP Reeko Moosa Manik was reported to have criticised the legality of an order issued on June 17, claiming the motion was a means to protect the interests of certain resort owners at the expense of developing independent travel.  Manik was unable to respond to Minivan News at the time of press.

Responding today to the Sun Online report, tourism authorities said there had appeared to be “confusion” about the content of a circular that as released by the ministry on June 17.

While not having seen the circular, former Tourism Minister Dr Mariyam Zulfa said she did have concerns about the government’s attitude to guest-house development, alleging that authorities sought to reverse previous state commitments to decentralise powers to local councils. She claimed these powers allowed councils – in collaboration with the government – to have more of a say in localised tourist developments.

“Confusion”

Deputy Tourism Minister Mohamed Maleeh Jamal claimed the ministry has issued a circular to make local councils aware that the allocation of public land for tourism development was to be approved by the ministry and not themselves.

“This circular from the ministry never mentioned guest houses or city hotels directly. Some local councils are allocating land for tourism developments like guest-houses,” he said.

According to Maleeh, the circular was devised as a “cautionary” response to ensure local councils only set aside land for hotels and guests-houses under license from the Tourism Ministry.  Maleeh contended this provision would ensure industry planning and safety standards were met.

“There appears to have been some confusion about the motion. Right now, any person can develop guest houses or hotels on private land,” he said. “To do this, they are required to go through the Tourism Ministry and follow regulations regarding safety and the number of rooms they are operating.  This is simply a circular to remind local councils that public land can’t be assigned by them for guest-house development.”

Maleeh claimed that all land being set aside for tourism development was required to go through a bidding process before gaining government approval.

Guest-house challenges

Just last week, Minivan News’ spin-off travel review site, Dhonisaurus, reported on the challenges facing the development of independent travel in the Maldives through industries like guest-houses.

Tourism Minister Ahmed Adheeb said at the time that the government was presently analysing the contribution to the economy of all tourist properties – including resorts, safari boats and guest-houses. Once this analysis was complete, the Tourism Ministry said it would then unveil how each sector will be developed though the country’s fourth tourism master-plan.

Speaking today, Deputy Minister Maleeh stressed that the country’s resort industry presently accounted for about 80 per cents of the total bed capacity available to tourists.

While guest-houses were estimated to account for 2.5 percent of tourism bed capacity, Maleeh claimed that the industry was “slowly picking up” – something that would be considered within the news tourism “master-plan”.

“Properties like guest-houses allow tourists to experience local culture here, there will definitely be a role for them,” he said. “However, the government wants to make sure these are successful ventures, but there may be issues to overcome for such properties. This is why the license to operate them must come from the tourism industry.”

“Running as normal”

One local operator of guest houses, who wished to remain unidentified, said that there has so far been no impacts on their business resulting from the tourism ministry circular.  The operator told Minivan News that an official tourism ministry inspection had been carried out last Wednesday (June 20) on a soon to be opened guest-house property, and there had been no indication of a change to their operations.

“As far as I’m aware, business is running as normal,” the spokesperson said.

Dr Mariyam Zulfa, who served as Tourism Minister under the administration of former President Mohamed Nasheed until February’s controversial transfer of power, has however raised concerns that the circular could place a barrier on future hotel and guest-house developments on inhabited islands.

Zulfa stressed that while she had not seen the circular, from what she could gather, the circular highlighted a government policy now seemingly against granting permission for new guest-house properties.

“I take it to mean that the circular will place a bar on further local tourism development by usurping the power of local councils,” she said.

“During my time, we worked to try and empower local councils through a land use plan to take more responsibility for local tourism development. They still had to come back to the Tourism Ministry and obtain an opening permit for any property, but we wanted to give councils power to decide how to move forward.”

Land use plan

With all land allocation related to tourism development requiring presidential approval, Zulfa said that the previous government held a policy where every island in the country was required to have a land use plan approved by the Housing Ministry.

Zulfa claimed that on islands where land had been earmarked for tourism developments under this land use plan, any person with a business proposal for a guest-house or hotel could then go to their council for approval.

“The idea was that local government would have the authority to negotiate with local developers for the best deal for their communities,” she added. “The ministry would also be able to provide assistance if needed.”

Zulfa added that she found it “strange” that opponents of the former government had alleged the administration had been doing “whatever it pleased” in terms of distributing land.

“If we look as the islands set aside for resort development at the time, there was a US$600,000 charge per square hectare of land – an amount that was very close to previous investment regulations.

Zulfa added that the “significant” sum was devised after a tender process and consultation with the industry to ensure committed investors were being found to help fund developments.

“It seems strange to me that people are making it seem like we were giving away islands, when we had undertaken immense work and spent significant time in outlining these plans,” she added.

Earlier this month, the government refuted claims it had considered halting the lease of 60 islands awarded for resort development by the Nasheed administration.

Critics alleged that the CSR programme was against the law as the islands were awarded in the absence of an open bidding system, and had favoured MDP members.

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Cabinet approves 13 month extension for resorts under construction

The cabinet  has decided to extend the duration for development of tourist resorts, tourist hotels, training resorts, transit hotels, and city hotels, for an additional 13 months.

According to the President’s Office, the extension will only be granted to the parties who have requested for it and provided that they have completed 50 percent of the work on those facilities.

The decision was made  on Sunday following discussions on a paper submitted by the Ministry of Tourism, Arts and Culture.

Islands and facilities leased for development since 2000 will be eligible for the extension.

Discussions were also made on a paper presented by the Ministry of Economic Development, on amending the Foreign Investment Act.

Members made the decision, for the Ministry of Economic Development to carry out the amendment procedure for the Act currently being implemented in the Maldives. The cabinet also advised the President on constituting a Foreign Investment Advisory Board, to develop and strengthen further foreign investment in the country.

The cabinet also decided on forming a National Council for Environment.

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