Tag: government

Penal Code returned to drafting committee

Parliament has sent the Penal Code back to the special committee tasked with revising it with a majority of 61 votes. While three members voted against re-sending it to committee, two abstained from the vote.

The final draft submitted to the parliament floor was rejected by 36 votes out of the 72 members present in Sunday’s session, after which a vote was taken whether to send it back to committee for review.

Members from the government coalition parties voted against the bill, with Progressive Party of Maldives (PPM) MP Ahmed Mahloof confirming to Minivan News today that a coalition whip-line was issued for the matter.

The Penal Code was submitted to the floor after seven years of review in the committee, having been initially submitted in 2006.

Maldivian Democratic Party (MDP) MP Ahmed Hamza – Chair of the Penal Code review committee – stated that the reason for the long duration of review is primarily due to the long periods required for reviewing and commenting by state institutions including the Attorney General’s Office and the Ministry of Islamic Affairs.

The bill, if ratified, will replace the 52 year old penal law which is currently in effect.

The Penal Code and religion

Much of the arguments presented against the Penal Code revolved around the concepts of religion and Sharia law not being “sufficiently reflected” in the final draft.

Jumhooree Party (JP) MP Ibrahim Muhthalib stated that “no human being has the right to rephrase divine laws in Islamic Sharia into separate articles in a law” and that he would abstain from voting on the matter as some scholars believe that participation in such an act may be blasphemous.

Maldives Development Alliance (MDA) MP Ahmed Amir echoed Muhthalib’s concerns and added that penalties on crimes which have a hadd [fixed punishments specifically mentioned in the Quran] sentences in Sharia Law are what most people have found concerning about the bill.

MP Ibrahim Riza who voted to send the bill back to the review committee said that the bill included some penalties which contradicted Sharia law mandates.

Religious conservative Adhaalath Party Sheikh Ilyas Hussain has also previously in March criticized the bill in sermons saying it will “destroy Islam”, prompting a parliamentary inquiry.

“If it is passed, there is no doubt that there will be no religion in this Muslim society that claims to be 100 percent Muslim. There will be no Islamic punishments. Refusing to incorporate even a single hadd is destroying Islam,” he had said then.

However, presenting the bill to parliament today, Hamza stated that in light of academic and technical expertise of the committee members, irreligious effects in the penal code have been brought to a minimal level.

“We are aware that various scholars from around the globe have commented on this work by Professor Paul Robinson,” Hamza said, referring to the legal expert from University of Pennysylvania Law School, under whose leadership the first draft of the Penal Code had been prepared on the request of then Attorney General Hassan Saeed in January 2006.

“Keeping this in mind, we took care to use our academic and technical capacity to minimalize any irreligious effects that might have been in this bill’s initial draft. Man-made laws are always less perfect than divine laws,” he stated.

The other main reservation put forth by members is the short period of time given to review the bill and submit amendments in.

The committee opened up the draft for amendments from December 24 to 26. On Saturday, December 28, the committee announced that no amendments had been submitted within the given timeframe.

Dhivehi Rayyithunge Party (DRP) MP Abdulla Mausoom, JP MP Shifaq Mufeed, PPM MP Ahmed Nihan voiced concerns about the short period of time given for review when speaking to Minivan News today.

Mausoom said that besides the time limitation, he also noticed double penalties for the same offence in the bill, and that is why he voted to return the bill to parliament.

“The penal code is as thick as a generic A4 ream of papers. It is unrealistic to ask us to read and comment on it in such a short time. What we have now is a penal code that has existed for very many years. When we pass a new one, I do not wish it to be one that calls for amendments to be submitted every other day. We are not of the mindset that we want to reject it, but we want enough time to review it in light of the Maldivian people’s way of life, Islamic Sharia and existing laws,” Shifaaq stated.

Meanwhile Nihan described the bill as “a rushed job done to bring an end to years of it being pending in committee”.

“There isn’t a single member in the committee who has actually read this bill. How can anyone spend time on it when there are so many other important bills that also call for our attention, as well as the annual budget? It has to come with enough time allowance for us to submit amendments,” he stated.

Bill review

The review committee’s Chair Hamza maintains that the government was given sufficient time and opportunity to submit all and any desired amendments to the bill.

“Voting records show that it was members of the government coalition who rejected this bill. We provided sufficient time allowances for them to submit amendments. We have even included 12 of the amendments submitted by the Attorney General,” Hamza explained.

“In fact, we worked at length both with former Attorney General Azima Shakoor and current successor Mohamed Anil. We also gave opportunities for political parties to submit amendments, where even PPM sent in submissions. I do not understand why it was rejected after all of this. I am astounded. I sincerely hope the government will explain its reasons for rejecting the bill in the form of an official statement,” he continued.

“I do not see how it will be possible to ever pass the new Penal Code if it is to be left as everyone’s lowest priority. Members need to make time and work to pass this bill at the earliest. I have now scheduled a meeting of the committee for tomorrow. I personally hope to review this, open it up for amendments, incorporate what we will from those and have it resubmitted to the parliament floor by early March next year,” Hamza said.

Responding to members’ criticisms, Hamza pointed out that members had not asked for additional time for reviewing the bill during today’s parliament session, and had instead voted to return it to committee.

Likes(0)Dislikes(0)

Rifts in government coalition over proposed budget

Ruling Progressive Party of the Maldives (PPM) and coalition partner Jumhooree Party (JP) have exchanged harsh criticisms following disagreements over the proposed budget for 2014.

President Abdulla Yameen has said coalition partners must let the PPM decide on the allocation of funds for the state budget.

In response, Jumhooree Party leader (JP) – and third placed candidate in this year’s presidential elections – Gasim Ibrahim has criticized the PPM for its alleged failure to consult the JP in compiling the proposed budget. Gasim’s backing was crucial in Yameen’s presidential win.

He is also the chair of the parliament’s Budget Review committee.

Speaking to the press on Wednesday, Yameen called on coalition partners to approve the proposed budget, saying “It will be impossible for the government to work for a common goal if coalition partners are to decide upon what amount of funding needs to be included in the budget for separate projects.”

Only the government will know how to draft a budget in the “best interests of the people,” he said, adding that a coalition can only work if there is cooperation within it.

The PPM had promised the JP over 30 percent of cabinet positions, parliamentary seats, and local government seats in exchange for the party’s support in the second round of presidential polls.

Yameen said that coalition members must not view the alliance as an opportunity to guarantee themselves what they want from within the government, nor should it be seen as a chance to bring out whatever number of candidates they wish to compete in an election.

Instead, forming a coalition is in itself an agreement to abide by the decisions of the main party in the said alliance, he said.

It is unnecessary for citizens to know details about a coalition or the agreements about what is promised to each coalition partner, he added.

“To view it with a united mindset and approve the budget we have proposed is the first step that our coalition partners can take to serve the people. There must be unity, or at least sincerity, in our coalition partners. For MDP, or another opposing party, to have opposing views is perfectly acceptable. But if there are to be major differences in the viewpoints of our coalition members, that is not what we made a coalition for,” Yameen said, criticizing members of his coalition.

“If at the initial stages, coalition partners themselves are to stand up and criticize every issue that arises about our proposal, I really do not see how I will be able to fulfill the people’s needs,” Yameen said.

“When figures for expenses are simply written and the budget is passed as such, while knowing it is not possible to get the said funds, and then the government fails to raise the funds written in the budget for specific projects, it is the government who will be held to account by disgruntled citizens. It is not the parliament, nor our coalition members, who will then have to be answerable, but us,” he continued.

The president stated that he or his government would only bear responsibility for unfulfilled pledges and policies if the budget is approved by parliament as it is.

“If the budget is not passed as it is, and multiple changes are brought to it, then I will not take responsibility for not being able to deliver as planned,” he said.

Parliament has scheduled voting on the budget for tomorrow.

Government held no discussion with coalition about budget: Gasim

Budget Review Committee Chair Gasim Ibrahim – who himself proposed 14 amendments to the budget – responded to Yameen’s comments stating that the government has failed to hold any discussions about the budget with coalition partners.

“Despite being a part of the coalition, the government held no discussion whatsoever with us regarding this budget. Proof enough of this fact is the number of amendments I have submitted to the budget. Had they held initial discussions with us prior to submitting the budget, I would not have had to do this today,” he said, submitting his amendments to parliament on Thursday.

“I am both a coalition member and the Chair of the parliamentary committee tasked with budget review. And yet, we have had no suggestions or discussions from the government,” he continued.

Among the 14 amendments proposed by Gasim, he has included a suggestion to add MVR 6 million to the budget of the Local Government Authority, MVR10 million to the budget of the Maldives National University and MVR5 million to the budget of Prosecutor General’s Office, all in a way that does not increase the total amount of the annual state budget.

Earlier in November, Gasim spoke in a party rally about the government’s failure to provide the promised state positions to Jumhooree Party, while adding that it may be due to PPM being “hectically engaged in other government matters” and expressing confidence that Yameen and party leader and former President Maumoon Abdul Gayoom will not “deprive [his party] from benefits”.

Likes(0)Dislikes(0)

President appoints five Deputy Ministers

President Abdulla Yameen has appointed five additional deputy ministers on Wednesday, adding to five other political appointments this week alone.

Hussain Haneef has been appointed as Deputy Minister of Education.

Ikram Hassan has been appointed as Deputy Minister of Ministry of Transport and Communication

Deputy Minister Adam Zalif has been transferred from Ministry of Economic Development to Ministry of Health and Gender.

Akhthar Haleem has been appointed Deputy Minister of Environment and Energy.

Hussain Zaamir has been appointed Deputy Minister of Finance and Treasury.

Likes(0)Dislikes(0)

Government appoints foreign secretary, state minister, deputy ministers

President Abdulla Yameen has appointed individuals to additional political positions this week.

Dr. Ali Naseer Mohamed has been appointed as Foreign Secretary. He was previously serving as Additional Secretary at the Foreign Ministry.

Jumhooree Party’s council member Fuad Gasim – who remains a State Minister – has been transferred from Ministry of Fisheries and Agriculture to Ministry of Health and Gender.

The President also appointed three new Deputy Ministers.

Fathimath Inaya has been appointed to the post of Deputy Minister of Foreign Affairs. She formerly served as Joint Secretary in the same ministry.

Mohamed Mahir has been appointed as Deputy Minister of Health and Gender.

Dr. Aishath Muneeza has been appointed as Deputy Minister of Islamic Affairs. She studied for a doctorate in law at International Islamic University of Malaysia.

Likes(0)Dislikes(0)

“Poor financial record keeping” poses challenges to audit state enterprises: AG

The Auditor General Niyaz Ibrahim has expressed concern over poor record keeping at State Owned Enterprises (SOEs), and said the public is entitled to know how much the state makes from an enterprise it owns or if the enterprise is making a profit or loss.

Speaking to Minivan News today, Niyaz said the independent audit office faces severe challenges in auditing SOEs, especially those in which the state is a minority share holder.

In some cases, even when a company is liquidated, there are no financial statements or audits, he said.

“As you know, there are over 80 companies in which the government owns shares, including minority share holding enterprises. While we don’t have adequate legal authority to appoint external auditors to the companies in which the state is a minority share-holder, the Audit Act allows us to do so with majority State-owned enterprises,” Niyaz explained.

It was the norm of the board of directors to appoint an external auditor, inhibiting the auditor’s work as they are bound to follow instructions from and report to the company’s board. However. starting in 2011 the Auditor General’s Office (AGO) has begun appointing external auditors to SOEs, thereby giving auditors more protection and independence.

The AGO will have auditors at all SOE’s except for Island Aviation for the 2013 accounts, Niyaz said.

Annual audits

The Company Act mandates audits be conducted annually, however there is no way to see how many SOEs are faring as they do not even produce financial statements, Niyaz said.

“Many of the companies which have been formed recently are in this very poor state of financial record keeping,” he continued. Even while some of these companies are now to be liquidated, there is no record of financial statements, nor has there been any audits. This is state resources we are speaking of. The people have a right to know what is being done with this money. Usually, public listed companies get more attention as they sell shares to people. How we see it, though, is that every citizen has ownership of state enterprises, and thereby public interest is much higher in such companies,” he said.

SOE’s must be far more transparent and accountable than listed companies, Niyaz stressed

The AGO has now commenced work on preparing a report documenting the status of all SOEs, he added.

“The public is entitled to get the basic information as to how much the state makes from an enterprise it owns, whether the enterprise is making profit or loss, whether it is accountable and transparent.”

Unexplained share-holding

Niyaz said there were many unexplained cases where the state owned minority shares, especially in the tourism industry.

“There is room to suspect that the legal provision within tourism laws of special provisions in the assignment of islands for tourism sector if the state owns some shares of the company or island is being abused,” Niyaz alleged.

Challenges in auditing state enterprises

Niyaz said that the Auditor General’s office has a practice of submitting a detailed work plan of all programs planned for the upcoming year with their budget proposal, and that the special audit of state-owned enterprises has not been included in the submitted proposal.

He said that his office will need to find means to fund the process in other ways, as plans for this were made after the budget proposal had already been submitted in late October.

Niyaz further noted the lack of cooperation extended to external auditors from the management and board of some state owned companies.

“Jobs for politicians”

The management of SOEs need to be strengthened, especially that of the board of directors, Niyaz said. SOEs must not be formed to create jobs for politicians, Niyaz said.

“As evident, if the top management of a company, enterprise or even an institution keeps being changed every now and then, it proves to be a strategical loss to that entity. Each of these management will have plans for its development, but if this keeps changing frequently, there will be no stability there. Therefore, there really needs to be a change in how the state runs the enterprises it holds shares in or owns,” he continued.

The state must end the appointment of individuals to management level jobs at SOEs on the basis of their political affiliation, Niyaz said.

“Even the board must consist of financially literate people who understand what it means to run a business, if the company’s governance is to be improved. I will give you an example of the level some current board members have, and this doesn’t change no matter which government is in place. A team from my office met with a company’s board members recently, after multiple attempts to meet them previously. For purposes of auditing, they asked the board for the financial statement. Members of the board then said at my staff members, ‘who do you think you are to come here and question us? We don’t have to give you any financial statements’ and then threatened to throw them out of a window. This is the calibre of some appointees to the boards of state enterprises. It is way beyond their authority to speak in that manner to a team of auditors who are their to fulfill legally stipulated duties,” Niyaz said.

Parliament initiative to run audits

Parliament’s Public Accounts Committee Chair Abdulla Jabir told Minivan News today that the committee has rescheduled the initial debate on the matter from Sunday to Tuesday, for which both the Auditor General and Attorney General Mohamed Anil will be summoned.

According to Jabir, the objectives of conducting a special audit are to have all state companies operating under a single holding company and to find a way to liquidate companies that fail to make profit.

Attorney General Mohamed Anil was not responding to calls at the time of press.

Likes(0)Dislikes(0)

Voluntary repatriation program announced for undocumented workers

The Department of Immigration and Emigration has announced a special repatriation program offering leniency for undocumented migrant workers who wish to return to their home countries voluntarily on their own expenses.

The program is set to begin tomorrow (December 23) and will allow migrant workers to return to the Maldives within six months of departure. However, if workers are deported, they are not allowed to come back to the Maldives for ten years.

According to the Immigration department, the purpose of the new program is to register and regulate undocumented migrant workers.

The likelihood of repatriated workers returning to the Maldives to work illegally will be slim due to increased monitoring, Deputy CEO of Immigration Abdulla Munaz told local newspaper Haveeru

Munaz said that, even if a thousand workers are sent off each month, it would take the government 35 months to send off all undocumented workers.

While there is no  official data available on undocumented migrant workers, estimates have put it as high as 44,000.

The current program’s target is to repatriate 5,000 – 10,000 workers.

Registration will take place from 23 – 31 December 2013 and 5- 6 January 2014, on all working days between 0900hrs – 1700 hrs at Dharumavantha School, Male’. Workers are to be sent home within two days of registration.

On December 5, Immigration Controller Hassan Ali announced that the institution’s biggest focus in the first 100 days of Yameen’s government would be to address the issue of illegal immigrants.

The Maldives has been on the US State Department’s Tier Two Watch List for Human Trafficking for four consecutive years. The US says the Maldives is a destination country for human trafficking, including sex trafficking, forced labor and debt bondage.

The Immigration department’s 100 day plan includes offering illegal immigrants a chance to change employees, and increasing the number of illegal immigrants who will be deported in 2014.

The immigration controller also revealed plans to re-register undocumented workers, establish an online system of obtaining work visas from Kulhudhuhfushi Island in northern Maldives and forming a single office to deal with all work related to migrant workers.

The Human Rights Commission of the Maldives has previously expressed concern over a mass repatriation program this year. The commission said the state should provide such workers with their due wages and compensation before sending them off.

Likes(0)Dislikes(0)

Government continues plans for first 100 days

Twenty-six days into the administration of President Abdulla Yameen, state institutions have been unveiling plans to commence or to resume projects within a 100 day period of the government’s November 17 inauguration.

A number of ‘roadmaps’ have emerged in the transport, health, and immigration. Similar lists of projects have also been devised for customs, the police, and the military.

Transport and communication

On December 8, the Transport and Communication Ministry revealed that it would finish drafting plans and begin the groundwork within a 100 days to develop the Ibrahim Nasir International Airport (INIA) to be able to cater to 5 million passengers.

Plans were also made to introduce the nighttime landing of flights in Thimarafushi and Fuvahmulah airports within this period.

In the field of land transportation, the ministry pledged to improve local ports, connect islands via seaplane transport and to improve ferry services between atolls.

There are further plans to establish a broadband internet policy and to provide fast-speed internet to all inhabited islands. Besides this, the plan also includes the introducing number portability between the two telecom service providers currently available in the country.

Transport Minister Ameen Ibrahim said that the government’s object was to make the Maldives the most advanced among the SAARC countries in the field of communication.

The government has also announced its intention to build a bridge between Hulhule’ – the airport island- and capital Male’, and have requested proposals from interested companies.

Health

Just a week after the new administration was established, Vice President Dr Mohamed Jameel Ahmed announced that the government had begun to solve issues in providing health services to the people.

Visiting the sole state-owned hospital – IGMH – in capital city Malé on November 24, Jameel announced that the government would begin fulfilling its health policies “as soon as we get the budget for it”, adding that this would include revamping the Aasandha insurance scheme and training nurses and doctors.

Early in December, prior to the appointment of a health minister, President’s Office Minister Abdulla Ameen announced that chemotherapy treatment for cancer patients would be introduced within the first one hundred days.

Stating that the lack of the service forced many Maldivians to live abroad for medical purposes, Ameen said that the introduction of chemotherapy facilities in the country was crucial. He added that screening to diagnose cervical cancer would also be introduced -both under a government insurance scheme.

Echoing Ameen’s assurances of fast development to IGMH, Health Minister Mariyam Shakeela said at a press conference held today that the government was drafting a policy to “bring major development to IGMH in a very short period of time to an extent never before seen”.

She said that this included a complete renewal of the management figures at the hospital.

The minister further revealed that the government had decided to transfer specialist doctors to the atolls for a period of time which would be allocated by the ministry.

Shakeela stated that funds for development are included in the budget, and that the government is also seeking aid from international donors for some of the projects. She hoped that such developments would  lead to “decreasing the burden on Aasandha”.

Shakeela promised that the full 100 day programme would be revealed next week.

Immigration

Immigration Controller Hassan Ali announced on December 5 that the institution’s biggest focus in the first 100 days of Yameen’s government would be to control the issue of illegal immigrants.

The plan itself includes work to offer illegal immigrants a chance to change employees, and increasing the number of illegal immigrants who will be deported in 2014.

The immigration controller also revealed plans to establish an online system of obtaining work visas from Kulhudhuhfushi, establishing a single office to deal with all migrant related work, and a mechanism where e-passports can be issued from two areas of the country.

Customs, Police and Military

The Maldives Police Services has also created a roadmap of goals they will work to achieve in the first 100 days of the Yameen administration.

On December 9, police revealed that the foremost goal in this roadmap is to complete investigation of 80 per cent of ongoing cases – the total amount of which was not specified – and to forward them to the Prosecutor General’s office.

Other goals include completion of investigation into small and petty crimes within a 30 day period, pre-emptive identification and intervention in cases of intention to commit crimes, and the setting up of additional security cameras in Male’ and Addu City.

Police will also be working to eradicate sexual abuse of children, and to establish what they have termed ‘be ready camps’ to achieve this goal in two atolls.

Facilitating youth employment by helping to get sea vessel driving licences, increasing women’s employment in the policing field to 50 percent, and the establishment of a juvenile detention centre is also included among the listed aims.

The roadmap also includes internal work like the establishment of a new system to address complaints against police officers, the creation of a police clinic for health support to officers and their families, and the compilation of a four-year strategic plan on professional development of the force.

Police, together with customs, have also initiated programs to tackle the illegal import and abuse of narcotics and serious and organised crimes.

Customs – which has also revealed a roadmap for the same period – have on December 12, expressed concern that budget limitations may prove to be an obstacle in the realisation of their goals.

Commissioner General of Customs Ahmed Mohamed stated that the budget cuts would affect the institution’s reaching of its objectives, including the provision of more convenient online services.

Maldives National Defence Force (MNDF)’s 100 day strategic plan includes the submission of various amendments to relevant laws – including the Armed Forces Act and Narional Security Act – to the parliament, and the establishment of a ‘justice system’ within the force.

The plan further consists of a variety of other projects, including the addition of a helicopter and landing crafts to its fleet, and the establishment of fire stations in the islands of Kahdhoo and Naifaru.

The military intend to lay the foundation for a new eight story building where the current Coast Guard offices are, to conduct additional international training for officers – especially with the Indian Army, to provide medical care at low fees for general citizens at the Senahiya military hospital, and the establishment of a day care centre for the use of officers and families.

Likes(0)Dislikes(0)

President Yameen appoints three more ministers to his cabinet

President Abdulla Yameen Abdul Gayoom has appointed three more ministers to his cabinet during a ceremony held on today (November 21) morning at the President’s Office.

The three new cabinet ministers are Dr Aishath Shiham as the Minister of Education, Dr Mariyam Shakeela as the Minister of Health and Gender and Mohamed Maleeh Jamaal as the Minister of Youth and Sports.

Earlier this week, President Yameen made 11 ministerial appointments that included his niece Dunya Maumoon as Minister of Foreign Affairs along with along with other members of the Progressive Party of Maldives (PPM) and the coalition of political parties that backed him during the presidential elections.

Who’s who?

Among the newest appointments to President Yameen’s cabinet, Dr Aishath Shiham and Dr Mariyam Shakeela previously served in the cabinets of former governments.

Dr Aishath Shiham was the Minister of Youth and Sports during the final days of Maldives former autocratic ruler for 30 years, Yameen’s half-brother Maumoon Abdul Gayoom.

Dr Mariyam Shakeela formerly served in the previous government of former President Mohamed Waheed Hassan, as the Minister of Environment and Energy.

Following the death of then Minister of Foreign Affairs Abdul Samad Abdulla last September, Shakeela was appointed as the acting Minister of Foreign Affairs by Waheed.

Mohamed Maleeh Jamaal was the former Deputy Minster of Tourism during Waheed’s government.

Following his refusal to back his party Dhivehi Qaumee Party (DQP)’s decision to support Waheed’s re-election bid, Jamaal was sacked from the position and at the request of DQP and swiftly replaced by another DQP member.

DQP however later withdrew their support to Waheed and backed resort tycoon and Jumhoree Party (JP) leader Gasim Ibrahim, but Jamaal opted to join the PPM.

President Yameen today also appointed Abdulla Ameen –the former State Minister of Ministry of Economic Affairs during Waheed’s administration – as a Minister for the President’s Office.

Apart from Ameen, Waheed’s Minister of Youth and Sports Mohamed ‘Mundhu’ Hussain Shareef was also appointed as a Minister for the Presidents Office earlier.

People expect things to be done – President Yameen

While addressing the new appointees today, President Yameen stated that he wanted a cabinet who would disburse their maximum time and effort in providing services required by the people and who would work within a progressive timeline of development projects.

“As you would know, we have been put in charge [of the government] with a huge support from the people at such chaotic time. We have been given this opportunity to manage the affairs of the people because they want things done. They expect things to be done. They also believe things have to be done. Therefore we should not step back and we cannot fail in that,” President Yameen said.

Highlighting that the country is in desperate need for development, President Yameen noted that his manifesto had a special focus on the youths of the country and appealed to young people of the country to support the government’s efforts to develop the country.

“By the will of Allah, even today we assure the people that this is a government that will bring results,” the President added.

With 14 cabinet appointments as of now, the President is yet to appoint an Attorney General.

President’s Office Spokesperson Ibrahim Muaz told Minivan News that President Yameen would soon appoint a person for the position of Attorney General but did not mention a specific date.

Likes(0)Dislikes(0)

GMR compensation claim of US$1.4 billion eclipses annual state budget

Indian infrastructure giant GMR has filed a claim for US$1.4 billion in compensation from the Maldives, following the government’s sudden termination of its concession agreement to manage and upgrade Ibrahim Nasir International Airport (INIA).

According to Indian media, the 75 page claim for “wrongful termination” of the concession agreement includes payments to subcontractors and loss of profits over the lifespan of the 25 year agreement.

Both the government and the state-owned Maldives Airports Company Limited (MACL) will be invited to respond, with a final court order in the case expected in March 2014.

In separate Singapore-based arbitration proceedings one of the project’s lenders, Axis Bank, is also seeking payment of US$160 million for a loan guaranteed by the Maldivian Finance Ministry.

Axis Bank recently raised concerns with MACL and the government, after President Mohamed Waheed moved to create a state-owned airport company and transfer to it MACL’s management responsibilities.

The prospect of MACL’s assets being dissipated led Airports Council International (ACI), the global body representing the world’s airports, to advise its members to exercise caution before making any investment in the Maldives relating to INIA, warning of “legal and financial risks”.

The government subsequently dropped the attempt, after its Attorney General Aishath Bisham warned that President Waheed had exceeded his authority in appointing board members to the new entity.

The lead up to eviction

GMR, in consortium with Malaysia Airports, narrowly won the International Finance Corporation (IFC)-managed bid for the airport in 2010, and signed the agreement with MACL under the former government of Mohamed Nasheed

The then-opposition, including the Progressive Party of the Maldives (PPM), People’s Alliance (PA), Dhivehi Qaumee Party (DQP) and Adhaalath Party (AP), opposed the agreement primarily on nationalistic grounds, and alleged corruption in the bidding process.

Other concerns raised by the opposition at the time included the prospect of GMR allowing Israeli military aircraft to stop over in the Maldives and refuel “after bombing Arab countries”.

The DQP then filed a civil court case, managing to block the developer’s charging of an Airport Development Charge (ADC) stipulated in the concession agreement, on the grounds it was a tax and therefore required parliamentary approval.

Backing the concession agreement, the Nasheed government permitted the airport developer to deduct the ADC from its share of the revenue as a stopgap measure, while it sought to appeal.

However shortly afterwards the Nasheed government was deposed during February 7 2012’s controversial transfer of power, and the opposition parties assumed control of the government – and the prospect of paying GMR for the development of the airport.

The government received US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time it was facing a crippling budget deficit, a foreign currency shortage, plummeting investor confidence, spiraling expenditure, and a drop off in foreign aid.

In the second quarter GMR presented MACL with a bill for US$1.5 million, and in the third quarter, US$2.2 million.

“The net result of this is that the Maldivian government now has to pay GMR for running the airport,” wrote DQP Leader and newly-appointed Special Advisor to President Mohamed Waheed, Dr Hassan Saeed, in a self-described “candid” letter to Indian Prime Minister Manmohan Singh.

A subsequent report by the government’s own Auditor General (AG) found concession revenue due the government had plummeted fourfold as a result of the court verdict sought by Saeed’s own party while it was in opposition.

According to the report, net concession revenue to the government had fallen to just US$6,058,848 in 2012, compared to US$25,424,877 in 2011.

Rather than appeal the Civil Court verdict obstructing the ADC, “The new government took the view that it would not be proper for it to intervene in the legal process for the benefit of a private concern,” the report noted, and instead, on April 19 2012, the informed the developer it was “retracting the previous agreement [to offset the ADC] on the grounds that the then Chairman of MACL did not have the approval of the MACL board to make the agreement.”

GMR asserted that this decision was a political event as defined within its concession agreement, and warned that this would amount to a breach of the agreement by the government.

“The government did not accept this argument,” noted the AG.

Seeking a way out of the agreement but wary of the heavy penalties in the termination clause, the government accused the World Bank’s IFC of “irresponsibility” and “negligence” in its conduct of the bidding process.

“The government must also consider how much money has to be paid back as compensation if terminating the agreement,” said Attorney General at the time, Azima Shukoor, during a prescient press conference in September 2012.

“It is clear to all of you that the Maldives financial and economic situation is at a critical level, and in this situation [termination] is not an easy thing to do,” Shukoor said.

In August 2012, with the new terminal and refurbishment 25 percent complete according to the government’s outside engineering assessment, the government ordered a halt to construction pending new ‘regulatory approvals’, and demanded a second runway not included in the original agreement.

GMR agreed to construct an emergency runway and proposed exempting Maldivian nationals from paying the ADC as a compromise. The company received no response to the offer.

Dr Hassan Saeed meanwhile issued a pamphlet calling for the cancellation of the agreement, likening it to “taking bitter medicine to cure a disease” or “amputating an organ to stop the spread of cancer.”

In his letter to Indian Prime Minister Manmohan Singh, dated September 19 2012 and obtained by Minivan News, Saeed further claimed that “GMR and India ‘bashing’ is becoming popular politics”, and warned that “as a result, “the Maldives is becoming fertile ground for nationalistic and extremist politicians.”

“I want to warn you now that there is a real danger that the current situation could create the opportunity for these extremist politicians to be elected to prominent positions, including the Presidency and Parliament on an anti-GMR and anti-India platform,” Saeed informed Singh.

Saeed went on to accuse GMR of extensive bribery, including the payment of “millions of dollars to buy MPs to get a parliamentary majority for the then ruling Maldivian Democratic Party”.

He claimed that “politicians and MPs who end up in GMR’s pocket keep silent but no one – with the exception of former President Nasheed and his key associates – have defended the indefensible GMR deal in public.”

Eviction

In late 2012 the government declared the concession agreement ‘void ab initio’ (invalid from the outset), and gave GMR seven days’ notice to leave the country.

The move swiftly followed the Singapore Supreme Court’s lifting of an injunction blocking MACL from taking over the airport pending arbitration proceedings, on the grounds the arbitration court had no jurisdiction to prevent the Maldives as a sovereign state from expropriating the airport.

The full verdict however did not exempt the government from compensation for this maneuver. In fact, according to the verdict document, Financial Controller for the Ministry of Finance Mohamed Ahmed “affirmed in an affidavit that the Maldives government would honour any valid and legitimate claim against it. He also stressed that the Maldives government had never defaulted on any of its payments.”

Moreover, lawyer representing MACL, Christopher Anand Daniel, “also accepted that if the arbitration tribunal found that the Appellants were wrong in their asserted case that the Concession Agreement was void ab initio and/or had been frustrated, but the Appellants had by then already gone ahead with the taking over of the airport, they would at least be liable to compensate the respondent for having expropriated the airport” (emphasis retained).

ACC exonerates airport deal

The Auditor General’s report acknowledged allegations of corruption in the deal, but finding the evidence “not conclusive on this point”, deferred to the judgement of the Anti-Corruption Commission (ACC).

That arrived on June 17, 2013, in the form of a 61 page investigative report that concluded that the bidding process was conducted fairly by the IFC, and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.

The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.

Furthermore,  “Considering the situation (2008, 2009 and 2010) when the decision was made to privatise the Male’ International Airport,” the ACC’s calculations showed that MACL would make a profit of about US$254 million in 25 years if the airport was operated by the government-owned company.

Conversely, the government would receive about US$534 million in the same period from the GMR consortium if the airport was privatised, the ACC found.

Reactions

Following publication of the ACC’s report, the government has backed away from allegations of corruption and instead declared to evict the developer was made due to its impact on state finances.

“Back before the government took back control of the airport from GMR, the reason we gave was that the deal was bleeding the country’s economy. We were paying GMR to keep them here,” President’s Office Spokesperson Masood Imad told Minivan News last week.

Azima Shukoor meanwhile labelled ACC’s report “incomplete” and “lacking professionalism”, in an interview with local media.

“There’s no contradiction between the government’s decision and the ACC report. We never levelled any corruption charge in terminating the agreement,” said the former Attorney General, in an interview with local media.

“Did [the ACC] omit the factors deliberately or unknowingly or simply just overlooked them? But a lot of factors have been overlooked and omitted from the report. The state will suffer great losses because of it. Especially when the country is tied up in [arbitration proceedings],” Shukoor was reported as saying.

“The state did a thorough investigation of the contract, including what happened during and after the signing of the agreement. So the government’s legal position doesn’t and shouldn’t change due to the report. We made a very firm decision,” she said.

Speaking at a campaign rally on the island of Thimarafushi in Thaa Atoll, former President Nasheed observed that the figure sought by GMR as compensation amounted to more than the annual state budget of the Maldives.

“Even today in my view it is one of the most important duties of the People’s Majlis to renew the contract, find a way to hold discussions with the company over [renewal], and save the Maldives from the great misfortune our people are about to face,” he said.

Former President Maumoon Abdul Gayoom’s PPM have meanwhile laid the blame for the airport debacle on President Waheed, accusing him of “ignoring advice”.

“We told the next President Mr Waheed that he should hold discussions with the GMR Group and the Indian government to arrive at an acceptable solution, after which the government was free to act on its own,” he said. “Unfortunately, this was not done and suddenly there was this unhappy ending,” Gayoom was reported as saying in the Hindu, following a visit to India and a meeting with Prime Minister Singh.

Following the PPM’s apparent turnaround on the GMR issue, Parliamentary Group Leader of the Waheed-aligned Dhivehi Rayithunge Party, Dr Abdulla Mausoom, said it was in fact senior figures in the PPM who were among the most vocal supporters for terminating the GMR agreement.

“It is ironic that we are hearing these statements from the PPM, whose leader has been witnessed supporting rallies demanding the cancellation of the [GMR] agreement,” he said.

Likes(0)Dislikes(0)