Hudhufushi lease renewed

The Tourism Ministry has renewed the lease for Hudhufushi in Lhaviyani Atoll despite the resort island’s owner owing more than US$85 million in unpaid rent.

According to a 2009 audit report, Hudhufushi’s leasee Abdul Rauf owed US$57.7 million in unpaid rent to the government going back to 2002, the majority of the amount accumulated fines from years of non-payment.

The lease rent owned by the Hudhufushi resort is one of the government’s largest debtors in the tourism sector, and was noted in both the tourism ministry and trade ministry’s audit reports for 2007.

Under the original 35 year lease agreement signed between Rauf and the government in 2000, the resort was to open on June 30, 2002.

Former Auditor General Ibrahim Naseem, dismissed by parliament last year days after ordering past and present government ministers to submit to an audit of their assets, had recommended repossessing the island and establishing a mechanism to take legal action against tax evasion.

His audit suggested that at least Rf117 million (US$910,000) of the amount was recoverable.

Local media this week reported that the debt had climbed to US$85 million, and that the government had renewed the lease under a new agreement stating that the amount would be paid back starting from the 11th year of the agreement.

In addition, the agreement requires two payments of US$750,000 before June 1 and December 1 of this year, local newspaper Haveeru reported, or it will be terminated.

Cofounder of local environmental NGO Bluepeace, Ali Rilwan, has meanwhile claimed that the island forms a natural bay that is home to rays and baby sharks, and was “a very important ecological site.”

“The development will cause a lot of disturbance – there was a lot of controversy even at the beginning on the process,” he said. “There were no studies before the island was awarded and it has not been subject to an environmental impact assessment.”

Rilwan suggested that in such instances the government should have provision to exchange an island for another, to allow the preservation of ecological sites such as Hudhufushi.

“There are only three islands in the Maldives that are listed as protected, at least on paper,” he said. “Hudhufushi has a mangrove area, which is a carbon sink – these are mentioned in the government’s carbon report. Half the mangroves in the Maldives have been reclaimed in the last 30-40 years.”

“Ecotourism sites such as these are rare in the Maldives and can generate an income as they make for wonderful photographs,” he said.

Minivan News contacted the tourism ministry for comment and was referred to Deputy Minister Ismail Yasir, but he was not responding at time of press.