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No response from government over ADC amendment proposal, reveals letter from Rao to Waheed

Chairman of Indian infrastructure giant GMR, G M Rao, has reiterated the airport developer’s proposal to exempt Maldivians from paying the contentious airport development charge (ADC), in a personal letter to President Mohamed Waheed Hassan Manik.

Rao’s letter, dated November 21 and obtained by Minivan News, proposes that an increased fee of US$28 be levied from all international departing foreign passengers, in order to compensate for an ADC exemption for Maldivian passport holders.

Rao’s letter, sent on November 21, states the importance of the ADC and that the current non-levying of the ADC was benefiting international foreign passengers rather than the government.

“The ADC significantly contributes to the cash flows of [GMR Male International Airport] and undoubtedly, in turn significantly benefits the GoM and the Maldives Airport Company Limited (MACL) by way of concession fee payments.

“The said non-levy of ADC and Insurance Surcharge (IS) has resulted (at the costs of GMIAL and eventually MACL/GoM) in an entirely unintended benefit to the international foreign passengers who are enjoying and would enjoy in future as well, the enhanced facilities and privileges at the airport without commensurate payment,” the letter reads.

Following a Civil Court case filed in 2011 by the then-opposition Dhivehi Qaumee Party (DQP) blocking GMR from levying ADC from international foreign passengers, GMR – under instruction from a letter sent by MACL – has been deducting ADC revenue from concession fees due the government.

Following the removal of ADC, the government has received a succession of bills from the airport developer throughout 2012.

In the first quarter of 2012 the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

According to Rao, the proposal exempting Maldivian passport holders from ADC and instead charging all international departing foreign passengers from INIA an increased ADC fee, is out of “deference to the Maldivian public sentiments” and to “ensure the unintended financial loss to GMIAL, MACL or GoM is contained”.

So far however, Rao states that has been no correspondence from the President’s Office regarding the proposal prior to the sending of the letter.

Minivan tried to contact the President’s Office, but there was no response at time of press.

MACL’s report “ridden with calculation errors”.

A further report addressed to President Waheed, entitled: ‘Concession Agreement dated 28th June 2010 relating to INIA, Male – purported report submitted by MACL regarding benefits to Maldives’, goes on to provide “accurate” and “factual” information relating to the benefits to the Maldives that the GMR-Malaysia Airports Holdings Berhad (MAHB) Consortium envisages.

Commenting on MACL’s recently prepared report that implies airport concession will have a negative impact on the Maldives, the GMR report claims it is “ridden with calculation errors” of which are “not only highly misleading but are full with errors and oversight”.

“It is estimated that over the concession period, GMR-MAHB will pay more than MRF 32.5 bilion to MACL as concession fee and MRF 12.5 billion as Passenger Service Chards (PSC) to the government.

“MACL report claims that if MACL operate the airport, they will make a profit of MRF 60 billion. However, once the errors in their report are corrected it will show that they will make a profit of MRF 18 billion only.

“The report also claims that when GMR-MAHB is operating the airport, MACL will make only MRF 21 billion. However, once the errors are corrected it will show that MACL will receive a concession fee of MRF 32.5 billion from GMR- MAHB,” GMR’s report claims.

Recently there has been mounting pressure from parties within the Maldives calling for the government to annul the agreement with Indian infrastructure giant GMR.

According to rumours circulating on social media sites, the government will allegedly cancel the GMR contact at a cabinet meeting on Tuesday. Tweets were being circulated speculating that a Chinese intermediary was prepared to pay for the contract termination and take over the airport development.

However asked to confirm or deny these rumours, Economics Minister Ahmed Mohamed said he was “unaware of any such action”.

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Zaki’s remarks “threat to national security,” claims Defence Ministry

The Ministry of Defence has said widely-reported remarks by Special Envoy of former President Mohamed Nasheed, Ibrahim Hussain Zaki that the previous government would have sought Indian military assistance to protect its economic interests in the Maldives, constitute a “threat to national security”.

In a statement on Friday, the Defence Ministry condemned the remarks “in the harshest terms” and contended that “such actions are very dangerous [threats] to national security and encourage activities that would harm the country’s independence and sovereignty.”

“If we were in the government, definitely we would have done it by now… definitely [asked for] their [Indian forces] to be on the ground,” Zaki was quoted as saying during a recent visit to the country.

The former Secretary General of SAARC reportedly warned India that rising fundamentalism in the Maldives threatened the country’s economic interests.

“Zaki, 67, a former minister in successive Maldivian governments headed by former presidents Maumoon Gayoom and [Mohamed] Nasheed, said he would have called for Indian forces to protect the multi-million-dollar investment by Indian infrastructure firm GMR Group,” Indian media reported on Thursday.

“The attack on GMR contract is an Islamic fundamentalist issue,” Zaki told reporters.

Zaki explained that “many top figures in the Adhaalath Party are educated in Pakistan and draw their philosophy from the hardline Salafist form of Islam.”

“When Islamic fundamentalism takes over the country, if the Lashkar-e-Taiba can take over the country, then I have no choice [but to call in forces from India],” Zaki was quoted as saying, “referring to the Pakistan-based militant group that India blames for the 2008 Mumbai terrorist attack.”

India’s Daily News & Analysis reported Zaki as saying that fundamentalists in the Maldives “have links with terror group Lashkar-e-Toiba” and warned that if Islamic fundamentalism goes unchecked the country could turn into a terror state that threatens Indian security.

Meanwhile, according to the Indian Express, Zaki’s meetings with External Affairs Minister Salman Khurshid, National Security Advisor Shiv Shankar Menon and Foreign Secretary Ranjan Mathai were “a clear signal from New Delhi of its unhappiness with Male’ over its handling of the opposition in that country to the GMR agreement for airport development.”

The Indian Express reported that Zaki received treatment at the Indian Army’s Research and Referral Hospital for injuries sustained during his arrest from an uninhabited island last week on charges of alcohol consumption.

Following his arrest and hospitalisation, former Human Resource Minister and Maldivian Democratic Party (MDP) lawyer Hassan Latheef tweeted that Zaki was “severely beaten by baton and handcuffed for hours”.

Zaki told the Express that he was thrashed with “boots and electric batons” for hours. “There was no space on my body where I was not hit,” he said.

External Affairs Minister Kurshid and his wife were meanwhile “old friends,” Zaki said.

Earlier this month, India’s Business Standard reported that Indian companies operating in the Maldives were expressing concerns over political interference derailing their substantial investments in the country.

“A recent meeting held with the Maldivian Housing Minister [and a joint venture between developers SG18 and Indian super-conglomerate TATA] is said to have ended abruptly with officials from the firm and the Indian High Commission being asked to leave,” the Standard reported.

“Maldivians’ airport to Maldivians”

The Adhaalath Party has been at the forefront of a campaign to renationalise the airport dubbed “Maldivians’ airport to Maldivians” led by parties of the ruling coalition.

Remarks by government spokesperson Abbas Adil Riza at a protest rally by the coalition earlier this month, alleging that Indian High Commissioner D M Mulay has been bribed by GMR, triggered a diplomatic incident and saw the government dissociate itself from the comments.

Meanwhile, Adhaalath Party President Sheikh Imran Abdulla said at a press conference last week that there should not be any further discussions or negotiations with the Indian infrastructure giant and reiterated calls for the government to immediately terminate the agreement.

While the head of the religious conservative party had given the government a deadline of six days to “reclaim the airport” at the rally on November 9, the ultimatum was later extended to November 30.

On Thursday, the anti-GMR campaign presented a petition with 35,000 signatures to President Mohamed Waheed Hassan Manik. The petition was handed to Dr Waheed by Sheikh Imran before a meeting at the President’s Office.

Speaking to press following the meeting, State Minister for Home Affairs Abdulla Mohamed said that the President assured the group that the dispute would be resolved in line with “the wishes of the Maldivian people” and that a decision would be made after a cabinet meeting.

With its second ultimatum, the group warned the government that it would have to resort to “direct action” unless the concession agreement was not terminated by November 30.

“Independence and sovereignty”

The press release from the Defence Ministry meanwhile referred to article 67(d) of the constitution, which states that every citizen has a responsibility “to promote the sovereignty, unity, security, integrity and dignity of the Maldives.”

The Defence Ministry appealed to politicians against making remarks that could undermine “national independence and sovereignty” and “issuing threats of confrontation and the use of force.”

The statement also warned that the Defence Ministry would take “necessary legal action against anyone who commits an act that harms the independence and sovereignty of the nation.”

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Comment: Maldives battle-lines getting redrawn?

With the Jumhoree Party (JP) voting in Parliament unlike the rest of the partners in the government, and President Mohammed Waheed Hassan sacking one more of its Ministers, battle-lines seem to be getting redrawn in the Maldives all over again.

The opposition Maldivian Democratic Party (MDP) lost the vote for secret-ballot on no-confidence motions – one is now pending against President Waheed – by 34-39 with two absentees in the 77-member house, including the Speaker, but the JP decision has exposed the chinks in the government’s armour that had remained underneath until now.

In a way, the early JP decision to vote for secret-ballot may have triggered the current political crisis, independent also of the anti-GMR protests that are centered on the Indian developer-concessionaire for the Male international airport. The sacking of JP Transport Minister Ahamed Shamheed the previous week has been followed by that of State Minister for Gender, Fathimath Dhiyana Saeed.

Minister Saeed had appeared with her husband and JP parliamentarian Abdulla Jabir at a weekend news conference, condemning his arrest on charges of alcohol-consumption, and alleged roughing-up, consequent hurt and humiliation at the hands of the police. Jabir was not alone in all this.

Simultaneously, President Waheed seems to have put on hold the JP’s new nominee for Transport Minister. Ameen Ibrahim is a vice-president of the party and chairman of the VTV of the Villa Group, owned in turn by JP founder, Gasim Ibrahim. He was named to succeed Shamheed after President Waheed stood his ground on not restoring the latter. Simultaneously, however, President’s Office Spokesperson Abbas Adil Riza, one of the recent entrants, quit the JP, protesting against the party’s vote on the secret-ballot.

What make the current developments interesting is the presidential aspirations of JP’s Gasim Ibrahim. He was among the first serious contenders for the presidency to announce his candidature in the elections that are due in 2013. Having bagged over 15 per cent of the popular-vote in the first-ever multi-party, direct elections to the presidency in 2008, Ibrahim is believed to command a ‘committed vote-bank’, which he transferred to MDP’s Nasheed in the second run-off round, thus contributing to the latter’s victory. With the nation purportedly poised for an equally keen contest the next time too, the current political developments have the potential to advance the presidential poll date, as desired and demanded by the MDP, ever since President Nasheed quit office on February 7.

Avoidable embarrassment

Despite winning the vote against secret-ballot on anticipated lines, the government faced avoidable embarrassment in Parliament when a member charged President Waheed and his aides with influencing him to “vote in a particular way” on the issue of secret-ballot. Ali Azim is one of the two MPs against whom the civil court had cancelled summons earlier in the day on Monday, for non-payment of dues to the state-run Bank of Maldives (BoM). Under the Maldivian law, proclaimed debtors cannot continue as MPs until they had cleared their dues – and at times have to get re-elected after their seats are declared vacant.

The government has promptly and predictably denied Azim’s charge. It is unclear if the MP intends moving a breach of privilege motion against all those whom he had named inside the house as influencing him to vote in a ‘particular way’ on the secret-ballot.

Media reports on his parliamentary expose, if one, did not mention any substantial evidence to prove his point. For now, the charge lends credence to the opposition MDP’s charge that the government was using all means to influence and/or intimidate MPs. If there are more on the treasury benches, as claimed, they are yet to speak up – or, act otherwise on issues of concern to the government.

‘Anti-GMR, not anti-India’

On a parallel track, which may have been side-lined to an extent by the more immediate political developments inside and outside Parliament, a junior Minister claimed that the on-going anti-GMR protests should not be construed as anti-India protests. In a pointed reference to the Indian concerns expressed by the Spokesperson of the Ministry of External Affairs (MEA) in New Delhi recently, State Minister of Tourism, Arts and Culture, Ahmed Shameem, claimed that the issue related to a company owned by ‘some Indians’ but was registered in another country and did not pay taxes to India.

The issue thus did not relate to India or the Indian Government, the Minister said.

“No demonstrations have been held in Maldives against India. No anti-India sentiments were expressed in any of the demonstrations held… India should not, therefore, be worried over a non-existent matter.”

Elaborating, Minister Shameem said, “We have no issues with India. We have no issues with any Indian citizens in Maldives, and likewise we have no issues with any of the employees of GMR. The issue is with the agreement made by the former Government (of President Nasheed) with GMR. All we want is to annul that agreement.”

Miadhu quoted Minister Shameem as also saying that they had clarified the position even in the Friday night’s rally of the National Alliance. He recalled that religion-centric Adhalathth Party leader “Sheikh Imran and others stated this very clearly. They clarified that there is no threat to any Indian citizen in Maldives”. As may be recalled, the protestors have resorted to a combination of religion and patriotism to target GMR, continuing from where they had left the ‘December 23 Movement’ after the February 7 resignation of President Nasheed.

Tirade against envoy continues

Minister Shameem went on to claim that the Indian government had been misinformed of the reality of the situation by people in the Maldives. He urged the Indian government to seek authentic information about the situation in the Maldives directly without contacting any third party.

Minister Shameem belongs to President Waheed’s Gaumee Itthihaad Party (GIP), and it is unclear why the response to the Indian MEA’s statement should come from someone not attached to the Maldivian Foreign Ministry.

Almost simultaneously, Minvian News confirmed that President’s Office Spokesperson Abbas Adil Riza stood by his controversial statement that Indian High Commissioner Dyaneshwar Mulay was a “traitor to Maldives, and corrupt”.

The opposition MDP had earlier taken the issue to parliament, with members claiming that the comments were against diplomatic protocol and could affect bilateral relations with India. MDP parliamentarian Eva Abdulla alleged that the remarks made by Riza were not those of his own but were rather made under “direct orders” of President Waheed, as Minivan News reported.

Riza got not-so-unexpected support from Abdul Azeez Jamaal Aboobakr, MP belonging to the Progressive Party of Maldives (PPM), founded by former President Maumoon Abdul the the Progressive Party of Maldives (PPM), founded by former President Maumoon Abdul Gayoom.

The PPM is the single largest political group supporting the Waheed government in parliament, and Aboobakr said that a person’s freedom cannot be limited because of his employment. He told parliament that Riza too had his freedom of speech – and recalled that the latter had prefaced his public utterances on High Commissioner Mulay as his personal views.

According to Minivan News, the majority of PPM members in parliament attempted to defend Riza, and tried to switch the focus onto the Indian envoy. However, in an apparent contradiction to its comments in parliament, the PPM on November 12 issued a statement dissociating the party from the ‘slanderous’ allegations made against High Commissioner Mulay, Minivan News said further. Earlier, the President’s Office too had distanced himself from Riza’s statement.

In the past, PPM leaders had spoken about the need for re-negotiating the GMR agreement, not ousting them from the airport construction-cum-concession contract. The party’s position on the issue is unclear. So is the current position of the Dhivehi Raayathunge Party (DRP), another of the Government parties originally founded by President Gayoom, and from which he is estranged now.

Over the previous weeks, DRP leader Thasmeen Ali and other leaders have spoken against the moves to oust GMR, but have not been heard of since. On the crucial secret-ballot issue the DRP, like the PPM, voted with the government and against the MDP amendment.

‘India need not be concerned…’

At the same time, in what read like a loaded statement, Minivan News quoted President Waheed’s interview to the news agency, Press Trust of India (PTI), that New Delhi “need not be concerned with affairs in the Maldives”. He claimed further that “this is not a problem that we have with GMR, but with a bad agreement… We have to pay GMR US$1.5 million per month under the current arrangement of the agreement in operation, and that is beyond our capacity”.

The reference was to the erstwhile MDP-led government of President Nasheed offering to compensate GMR for the loss of revenue, after a local court struck off the original provision for levying $25 entry fee for Maldivians using the Male airport. Ironically most government parties today, barring President Waheed’s GIP, were in the opposition at the time the GMR contract was signed – and had opposed it through political, legislative and legal means.

Otherwise too, President Waheed may have a point, when he says the government is strapped for cash to pay GMR every month. Tourism had sustained economic development up to a point, but for growing with the growth, the nation needs large investments in the infrastructure sector in particular. The skewed governmental revenue-model from the resort-centric tourism industry is incapable of sustaining the economy. This is also the crux of the fiscal problem that the Nasheed government inherited and left behind – after attempting to address wide-ranging economic reforms, which came with the IMF-driven austerity measures, affecting the common man as much as the large pool of public servants.

Against this background, the Waheed government may not have any answers to the question of much larger repayments that may become necessary if the GMR agreement were to be annulled, as being sought by street-protestors in Maldives, and the international arbitrators in Singapore, whom GMR has approached under the agreement for redress, rule in its favour. Of equal concern should be the unwillingness of other overseas investors to put their money in Maldives, a nation until now known for easy repatriation procedures that had attracted funding for the resort industry in the first place.

The alternative could be that Maldives has already identified an external underwriter, now lurking in the side-lines, to either pay-off or buy-out GMR, or have other weapons in its arsenal to avoid/minimise those payments.

The Adhaalath Party, which had set a November 15 deadline for the government to take-over the Ibrahim Nasir International Airport (INIA) from GMR has extended the same till the month-end.

For its part, GMR has reiterated its willingness to re-negotiate the position under the existing agreement. Yet, it is unclear if the Maldivian government is willing to re-negotiate the deal as ruling combine leaders used to say from time to time, or would have the time, energy and inclination to do so, and that domestic political developments of the kind flagged by the JP vote on the secret-ballot and allied issues would not overtake the same.

To the extent, the GMR issue and the political crisis could overlap in more ways than one, and more often than anticipated, with consequences for the nation and its near-exclusive import-driven economy.

The writer is a Senior Fellow at Observer Research Foundation

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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High Court of Singapore upholds injunction against MACL, blocking action over ADC in Maldives’ Civil Court

The High Court of Singapore has rejected an attempt by the Maldives Airports Company Limited (MACL) to release an injunction blocking the government from taking action in the Civil Court of Maldives blocking GMR’s offset of the airport development charge (ADC).

MACL is the government party in the concession agreement with Indian infrastructure giant GMR to manage and develop Ibrahim Nasir International Airport, signed during the Nasheed administration.

Opposition parties at the time the agreement was signed – and are now in government following February 7’s controversial transfer of power – first opposed GMR’s development of the airport on nationalistic grounds, and then levelled numerous allegations against the company ranging from corruption to concerns that the deal would allow Israeli bombers to refuel en route to bombing Arab countries.

The opposition had some success in disrupting the agreement in late 2011, after the Dhivehi Qaumee Party (DQP) won a case in the Civil Court blocking GMR from levying an airport development charge (ADC) as stipulated in its concession agreement.

MACL in a letter sent on January 5, 2012, instructed GMR to deduct the ADC revenues from the concession fees due the government, while it sought to appeal the Civil Court ruling. However the Nasheed government fell a month later and the opposition inherited the problem, receiving a succession of bills from the airport developer throughout 2012.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

“The net result of this is that the Maldivian government now has to pay GMR for running the airport. On this basis it is likely that the Maldivian government will end up paying about MVR 8 billion (US$519 million) to GMR for the duration of the contract,” wrote Dr Hassan Saeed, President Mohamed Waheed’s Special Advisor, in a recent appeal to Indian Prime Minister Manmohan Singh calling on him to cancel the Maldives’ agreement with GMR.

Saeed is the leader of the DQP, the party that filed the case against the ADC while in opposition, and has strongly opposed GMR’s involvement in the airport development.

As per the concession agreement, the ADC matter was referred to the Singapore Court of Arbitration.

The High Court of Singapore on July 23 granted an injunction in favor of GMR, restraining MACL from taking any step in the Civil Courts of the Maldives preventing the company “from adjustment/set-off of the Airport Development Charge and insurance surcharge, as per MACL’s 5th January 2012 letter, which is now referred to arbitration,” according to the airport operator.

MACL approached the High Court of Singapore in October 2012 seeking to have the injunction lifted. However the court dismissed the application on November 19.

MACL has challenged the validity of the July 5 letter instructing GMR to deduct the ADC from its concession revenues, claiming that it was signed by the former MACL Chairman ‘Bandhu’ Ibrahim Saleem without approval from the company’s board, and noted that he had been subsequently replaced under the new administration.

“The dispute raised by MACL on the validity of the 5th January 2012 letter will be decided in the arbitration proceedings to be held in Singapore,” GMR noted in a statement.

Attorney General (AG) Aishath Azima Shakoor claimed in local newspaper Haveeru on Monday that the Singaporean court had permitted MACL to try the matter in a Maldivian court, and allow the company to sue Saleem for the loss of revenue caused by the July 5 letter.

“But in accordance with the agreement whether MACL had the right to ignore or comply with the letter would be decided by arbitration. Even if a Maldivian Court rules the letter as null and void it would not binding for the arbitration,” Azima was reported as telling the paper.

There was, she said, no impediment to the government terminating the GMR agreement altogether, although this would be subject to compensation payable to GMR to be decided through arbitration.

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President’s Office Spokesperson “stands by” comments against GMR, Indian High Commissioner

President’s Office Spokesperson Abbas Adil Riza confirmed that he stands by his controversial comments made against Indian High Commissioner D M Mulay last week.

Speaking at a rally on November 9 calling for the government to “reclaim” Ibrahim Nasir International Airport (INIA) from Indian infrastructure giant GMR, Riza described Mulay as a “traitor and enemy of the Maldives and the Maldivian people”.

The remarks have since been widely reported by Indian media, sparking a diplomatic row and forcing the President’s Office to issue a statement distancing itself from the comments.

Riza also spoke at a rally last Friday, characterising the Indian media coverage of his remarks as a “success” and urging participants to persevere “until GMR leaves this country.”

Riza told Minivan News that the comments were made in his “personal capacity” rather than his “official capacity”, adding: “The comments were my personal opinion and I still stand by them.”

Members of parliament expressed concern over the remarks made by Riza, leading to a debate on the matter last Tuesday (November 13).

During the debate, MPs of the opposition Maldivian Democratic Party (MDP) condemned the comments claiming they were made against diplomatic protocol and could affect bilateral relations with India.

Meanwhile, MDP MP Eva Abdulla alleged that the remarks made by Riza were not those of his own but were rather under “direct orders” from President Mohamed Waheed Hassan.

The majority of former President Maumoon Abdul Gayoom’s Progressive Party of Maldives (PPM) MPs attempted to defend Riza, and tried to switch the focus to High Commissioner Mulay.

In an apparent contradiction to its comments in parliament, the PPM on November 12 issued a statement dissociating the party from the “slanderous” allegations made against Mulay.

Meanwhile, PPM MP Abdul Azeez Jamaal Aboobakr defended Riza, stating that a person’s freedom cannot be limited because of his employment, and that Riza too had his freedom of speech.

Aboobakr also highlighted that Riza had at the beginning of Friday’s speech said that he was going to make the remarks not in his official capacity as the spokesperson, but in an individual capacity.

More recently the Indian Government has expressed concern over the “continuing political instability” of the Maldives.

A statement released by the Indian Government on November 17 also showed concern about the “anti-Indian protests” being staged in the country.

President Mohamed Waheed Hassan Manik yesterday told Indian News Agency, Press Trust of India (PTI) that India need not be concerned with affairs in the Maldives.

Speaking about the GMR contract signed under the previous government, Waheed told PTI: “The agreement [to lease INIA to GMR] was signed by the previous government, and the circumstances leading to the stamping of the deal were questionable. Hence, this is not a problem that we have with GMR, but with a bad agreement.

“We have to pay GMR 1.5 million US dollars per month under the current arrangement of the agreement in operation, and that is beyond our capacity.”

The government’s financial liability in the airport deal – its most recent bill for the third quarter was US$2.2 million – is the result a of a civil court case filed by the now ruling-coalition Dhivehi Qaumee Party (DQP), during the Nasheed administration, which blocked GMR from levying an airport development charge (ADC) as stipulated in its concession agreement.

The Civil Court ruled in the DQP’s favour. Opting to honour the contract, the Nasheed administration instructed the company to deduct the ADC from its concession fees while it sought to appeal the matter.

The new government – which includes the DQP – inherited the problem following the downfall of Nasheed’s government on February 7. In the first quarter of 2012 the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

GMR has previously offered to compromise by exempting Maldivian nationals from paying the ADC, but claimed not to have received a response from the new government.

Protests continuing

Meanwhile political groups in the Maldives continue to stage protests against the GMR contract. The Indian infrastructure giant hasa said it is flexible about discussing issues within the framework of the agreement with the Maldives government.

A senior official of GMR told the Hindu Business Line: “We remain flexible within the framework of concession agreement…If they want to scrap the agreement, [in that case] we are finished.

“We have already invested more than $200 million. Our banks are watching. It is impossible for us to scrap and sit back.”

Meanwhile, the Maldives government has been asked by India to ensure the safety and security of its nationals in Maldives and “Indian interests” in the country in view of the ongoing anti-India demonstrations.

The anti-GMR campaign, from which Riza’s comments stem from, has been increasing pressure on the government to annul the agreement.

Adhaalath Party President Sheikh Imran Abdulla – a leading figure in the anti-GMR activities – gave the government a six-day ultimatum to cancel the contract.

Despite the initial date having passed without any official conclusion, Sheikh Imran, speaking at the artificial beach on Friday (November 16) night, said: “The Maldivian President has heard our plea, [He] has said that he heeds and respects it, [He] needs some time to arrange a few things.

“Hence to give [him] some time even if the previously issued ultimatum is up. The work is being done in this manner. Hence to give some space and stay put.”

In light of this information, Sheikh Imran has said that the ultimatum has now been extended to November 30, adding: “Our patience will wear out at some point, after that point we will go for direct action. After November 30, we will go for direct action. We will not stay still.”

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Situation in the Maldives of no concern for India: President Waheed

India does not need to be concerned about the current situation in the Maldives, according to President Dr. Muhammad Waheed Hassan Manik.

Speaking on the day of the initial anti-GMR ultimatum date (November 15), Dr Waheed told Indian News Agency, Press Trust of India (PTI) that affairs within the Maldives were well, and India had no reason to be concerned.

Concern has been raised by the Indian government following the “anti-Indian” protests being staged in the Maldives, a statement released yesterday (November 17) said.

Protests calling for the government to “reclaim” the Ibrahim Nasir International Airport (INIA) from Its Indian operator GMR took place in the Maldives last week.

In response to PTI’s question regarding the turmoil surrounding INIA and GMR, the President revealed that the airport lease agreement between GMR and the previous government of the Maldives had been entered in “questionable circumstances.”

“The agreement [to lease INIA to GMR] was signed by the previous government, and the circumstances leading to the stamping of the deal were questionable. Hence, this is not a problem that we have with GMR, but with a bad agreement,” said the Waheed, according to PTI.

Responding to a question about whether the pressure from political parties in the Maldives to take back INIA from GMR is irresponsible – as former President Mohammed Nasheed stated – Waheed said: “We have to pay GMR 1.5 million US dollars per month under the current arrangement of the agreement in operation, and that is beyond our capacity.”

The Indian Government has since expressed its concern about the situation in the Maldives, according to a statement released yesterday (November 17).

The Statement also said that India had registered its concerns with the Maldivian authorities.

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Adhaalath party extends GMR ultimatum to November 30

The Civil Coalition’s ultimatum to reclaim the Ibrahim Nasir International Airport (INIA) from its operator GMR has been extended to the end of this month.

The initial ultimatum for the Maldivian government to annul the agreement with GMR had an original deadline of November 15.

Speaking at the artificial beach on Friday night, leading figure in the anti-GMR activities, Adhaalath Party President Sheikh Imran Abudlla, said: “The Maldivian President has heard our plea, [He] has said that he heeds and respects it, [He] needs some time to arrange a few things.

“Hence to give [him] some time even if the previously issued ultimatum is up. The work is being done in this manner. Hence to give some space and stay put.”

According to Sheikh Imran, the ultimatum has been extended to November 30 as the president has heard their plea and respected it.

He added: “However our patience will wear out at some point, after that point we will go for direct action. After November 30, we will go for direct action. We will not stay still.”

President’s Office spokesperson Abbas Adil Riza, announced that “GMR must go” at the Friday night rally.

He added that the anti-GMR campaign must continue until GMR is ousted, insisting that relations between India and the Maldives should not be affected by it.

“Maldives has always considered India as an uncle, we will never go up against India. It is not GMR who sells us potatoes and onions, it is not GMR who sells us construction material, it is our brothers in India. They will always remain by our side,” Abbas said.

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President’s Special Advisor appeals to Indian PM to terminate GMR contract, warns of “rising extremism”

Special Advisor to President Mohamed Waheed and leader of the Dhivehi Qaumee Party (DQP), Dr Hassan Saeed, has appealed to Indian Prime Minister Manmohan Singh urging him to terminate the Maldives’ airport development contract with Indian infrastructure giant GMR.

GMR signed a 25 year concession agreement with the former administration to develop and manage Ibrahim Nasir International Airport (INIA). Saeed’s DQP was vocally opposed to the deal while in opposition.

In a self-described “candid” letter to Singh dated September 19, obtained by Minivan News, Saeed 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.

“That would not be in the interests of either the Maldives or India. You are well aware of the growing religious extremism in our country,” Saeed stated, in an apparent turnaround from the party’s former position.

Months prior to the downfall of Nasheed’s government in February, Saeed’s DQP published a pamphlet entitled ‘President Nasheed’s devious plot to destroy the Islamic faith of Maldivians’, which accused Nasheed of “working ceaselessly to weaken the Islamic faith of Maldivians, allow space for other religions, and make irreligious and sinful behaviour common.”

Specific allegations in the pamphlet against Nasheed’s administration included “fostering ties with Jews”, “holding discos”, “dancing”, permitting the consumption of alcohol, fraternising with “Christian priests”, characterising the Maldives as “a nest of terrorists and Maldivian scholars as terrorists”, failing to condemn comments by UN Human Rights Commissioner Navi Pillay opposing “Shariah punishments like flogging fornicators”, permitting senior female diplomats and party officials to wear skirts, and attending the Miss France 2011 Beauty Queen pageant on the night of the Holy Hajj.

“Nationalism and extremism in India’s backyard is not good for India or our small country,” Saeed informed Prime Minister Singh, in his letter.

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.”

“When politicians and legislators are unable to debate openly such important national issues and address them in an appropriate manner the public starts to look for alternative voices,” Saeed claimed.

“I fear that the only viable alternative for them appears to be nationalist and religious leaders, which could turn a bad situation ugly.”

Saeed advised Prime Minister Singh that “due to the negative connotations of the GMR issue, many positive elements of our relationship such as the vast amounts of grants and loans by India to the Maldives go unnoticed.”

Maldivian Finance Minister Abdulla Jihad in late October warned that the Maldives would be unable to pay state salaries for the rest of the year without a further US$25 million loan from the Indian government.

The US$25 million was agreed upon in September 2012 as part of a US$100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

“Indians and the Indian government may find it difficult to understand the growing anti-Indian sentiments here in the Maldives in spite of the vast amount of aid and loans we receive from you,” Saeed informed Prime Minister Singh, and complained that all bilateral talks with India now “start with and end up on the subject of the GMR issue.”

“As a result many other crucial discussions are delayed or are tied up with GMR. Normally straightforward issues such as simplifying the Indian visa for Maldivians end up being tied into the GMR issue,” Saeed said.

Longstanding opposition

A second pamphlet produced by Saeed’s DQP while it was in opposition criticised GMR as “paving the way for the enslavement of Maldivians in our beloved land”, and warned that “Indian people are especially devious”.

“Maldivians feel our respect is taken for granted, our sovereignty infringed and that India is developing a ‘big brother’ approach to relations with us,” Saeed wrote to Singh on September 19.

“The Indian Foreign Secretary’s visit to our country in February [2012] failed to resolve the political crisis largely because India is no longer seen as a friendly and fair neighbour who could broker an honest and fair deal. It cannot help India’s international reputation to be seen as unable to resolve a crisis in its own backyard.”

Saeed furthermore informed Prime Minister Singh that “the Indian diplomatic corps in the Maldives appears to be so passionate in protecting GMR interests that one often gets confused as to whether they are GMR employees or diplomats representing the Indian government.”

The remarks echoed controversial comments by President’s Office Spokesperson Abbas Adil Riza at an anti-GMR rally on Friday – during which Riza accused Indian High Commissioner D M Mulay of protecting GMR’s interests and being “a traitor and enemy of Maldives and Maldivian people”.

Saeed claimed in his letter that “increasingly Maldivians believe that the unfair treatment of the Maldives by the Commonwealth is connected with GMR and India.”

“It appears to many Maldivians that Indian officials are using international leverage and contacts to influence Commonwealth governments and forcing the way the Maldives is governed, thus impinging on our sovereignty. Some Indian diplomats continuously remind our senior government officials that the Maldives would be removed from the Commonwealth Ministerial Action Group (CMAG) agenda the moment the GMR issue is resolved,” Saeed claimed.

Growing tensions

For its part, GMR has downplayed its confrontation with the new government. However it admitted last month to India’s Business Standard publication that “public statements and press conferences of some government ministers and coalition party leaders are clearly aimed at arousing public sentiments against GMR and creating undue challenges for us.

“To gain political advantage, some elements of the government itself have started hampering the smooth functioning and development of the airport,” the company added.

The most recent surge of tension follows the company’s forwarding of a US$2.2 million bill to the government’s side of the contract – the Maldives Airports Company Limited (MACL).

The negative balance was the result a civil court case filed by Saeed’s DQP during the Nasheed administration, which blocked the company from levying an airport development charge (ADC) as stipulated in its concession agreement.

The new government – which included the DQP – inherited the problem following the downfall of Nasheed’s government on February 7. In the first quarter of 2012 the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

Saeed concluded his letter to Prime Minister Singh by suggesting that India “assist us in terminating the GMR contract as soon as possible, well before the 2013 presidential election.”

Download the complete letter (English)

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Televised allegations by President spokeperson against Indian High Commissioner spark diplomatic incident

Additional reporting by Mohamed Naahii and Mariyath Mohamed.

The government has distanced itself from comments made at a rally on Friday by President’s Office Spokesperson Abbas Adil Riza, after his attacks against Indian High Commissioner D M Mulay were picked up and widely reported in Indian media.

During a rally organised by parties of the ruling coalition, calling for the seizure and nationalisation of Ibrahim Nasir International Airport (INIA) from Indian infrastructure giant GMR, Riza described Mulay as a “traitor and enemy of the Maldives and the Maldivian people”, accusing him of taking bribes and threatening the government.

“Trade between the Maldives and India reaches billions. Indian tycoons have the biggest share in Maldives tourism. Indian people are deepest in Maldivian business. We have to protect the businesses of those who import and sell potatoes and onions from India. We also have to protect the businesses of those who import gravel and sand from India. It should not be GMR that [Mulay] should take into account,” Riza declared.

Riza alleged that Mulay had been using his influence as the High Commissioner to threaten the Maldivian government, following the calls against GMR.

“Today, like someone who has chilli smoke on his eyes, like someone who has ants at his feet who is threatening us Maldivians, the Indian ambassador here has forgotten what his job here in Maldives is. We are not in the mood to allow him to commit the crimes he is committing in our country,” he told to crowd.

“I saw two folks who work in the Indian embassy go out of [this gathering] talking to a Bangladeshi. They asked him to take photos of the gathering. When this Bangladeshi was here taking photos, I confronted him and asked who are you to take photos? He then said his name was Aboobakr. I told him to leave immediately, just the way I am saying GMR must also leave immediately,” Riza said.

Riza added that the Maldives and India will always remain “good friends” and that the people of Maldives are so interconnected with Indians, but the “problem is that there are a few Indian traitors who take bribes”.

“A diplomat’s job is to work for his country and people and not to protect the interests of one private company… He is a traitor and enemy of Maldives and Maldivian people. We don’t want these kind of diplomats on our soil,” Riza said.

“Today we are also calling on for something else. On the day when we get GMR out of the Maldives, Mulay must also get out of here!”

Following several nights of poorly-attended rallies at the artificial beach, Minivan News observed more than a thousand present on Friday.

Noticing an expatriate in attendance reading a copy of local Dhivehi newspaper Haveeru, Minivan News asked what he was doing: “Boss asked me to look Maldivian,” the expatriate replied.

Riza’s comments were widely reported in Indian media.

Television channel Times Now described the “vicious targeting of the Indian envoy as leaving “a bitter taste”, and sparking a “huge diplomatic row”.

At time of press the story had also been picked up by the Hindu and the Indian Express.

Indian response

The remarks were quickly met with concern and condemnation by the Indian High Commission, which issued a statement dismissing the Presidential spokesperson’s allegations as being “against the diplomatic protocol”.

“We have told the government of Maldives that settling issues of huge mutual interest cannot be done on public space or on stage. This has to be done through discussion,” the High Commission said in a statement.

The Indian High Commission also made it clear that India would safeguard its interests including the investments of Indian companies.

“Similarly, all agreements signed by the previous governments will also be safeguarded and as such we have expressed our concern in very strong words to the government of Maldives. And we have also conveyed that India would safeguard the country’s interest, including these related to our investment,” it added.

The statement noted that the government’s issues with GMR were now the subject of arbitration in Singapore.

“If arbitration fails they (GMR and the government of Maldives) could find mutually accepted recourse either by going to the court of law or may be finding other mechanism available,” the High Commission stated, noting that President Waheed had personally given assurances to Indian Prime Minister Manmohan Singh that all the Indian investments, including GMR, would be protected and safeguarded.

“Our relations have been very strong and lot of goodwill have been invested in it. India is the Maldives’ largest investment partner, India is the largest technical and capacity building partner. India’s trade, aid and development partnership is also the biggest one,” the statement concluded.

Maldivian government retreats

Following complaints from the Indian government, the Maldivian government issued a statement on Saturday dissociating itself from comments made by Riza “and some other government officials, at a gathering held last evening against the involvement of GMR in the Ibrahim Nasir International Airport.”

“The gathering was organised by certain political parties including some members of the public. The views expressed at the gathering by Mr Abbas Adil Riza, though his own views, are regrettable, and do not reflect the views of the Government of Maldives, particularly those made against the Indian High Commissioner to the Maldives Mr D. M. Mulay,” the statement added.

Media Secretary of President’s Office, Masood Imad, told local newspaper Haveeru that Riza could have made the statements in a more “diplomatic way” and added that the Ministry of Foreign affairs has begun looking into Riza’s statements.

Political parties on both sides of the political divide, including the Maldivian Democratic Party (MDP), Dhivehi Rayyithunge Party (DRP) and even Riza’s own Jumhoree Party (JP), condemned his remarks.

The DRP in a statement claimed that party was of the view that the government and President Waheed should both apologise to Mulay and that such concerns should be raised in a more “ethical” and “diplomatic” manner.

JP Leader Gasim Ibrahim stated that Riza’s comments “go against the international standards of diplomacy, we are saddened by it and condemn it.”

The MDP also released a statement condemning Riza’s remarks, adding that the “baseless criminal accusations” were “highly concerning”.

“These undiplomatic, irresponsible, vulgar statements made towards a high-ranking diplomat of a neighbouring nation were initiated by the President’s spokesperson at a public gathering that was televised nationwide. MDP further condemns in the strongest terms, the similar public statements made by the president of a political party and by other political leaders at the gathering,” the party said.

However the MDP also has a track record of making accusations against Mulay.

MDP Chairperson ‘Reeko’ Moosa Manik and former Former National Security Advisor Ameen Faisal in May alleged that Mulay had played down the tumultuous political turmoil and change of government on February 7 as an “internal matter”, despite being able to “see what was happening from his window. The whole coup was being telecast live. As a diplomat, he should’ve known that the whole country was in chaos.”

“[Mulay] became so powerful that he started behaving like the prime minister and not a high commissioner,” said Manik.

“In early 2011, we felt that Mulay was drifting away from the MDP. He wanted to meet leaders of opposition parties. He wanted to be invited to all official functions that took place in Maldives. He was invited to many government functions, but not all. We found that a lot of companies were coming [to the country] for business through Mulay. We were floating tenders for big projects. He would act like a middleman,” Manik alleged to Open magazine.

“Mulay would visit various [Maldivian] islands with his Indian friends, many of them businessmen. The government did not know who they were. Mulay has good connections with opposition parties, particularly Gayoom’s party,” he further claimed.

India’s Ministry of External Affairs responded at the time: “We do not think it is appropriate to bring our High Commissioner into the discourse. He enjoys our full confidence,” while Mulay himself at dismissed the allegations as “completely baseless, a flight of fancy.”

Cash-strapped Maldives turns to India

Friday’s diplomatic incident follows urgent warnings from Finance Minister Abdulla Jihad in late October that the Maldives would be unable to pay state salaries for the rest of the year without a further US$25 million loan from the Indian government.

The US$25 million was agreed upon in September as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

Jihad told local media at the time that he believed the loan was being delayed due to the ongoing controversy over GMR’s development of INIA.

Since coming to power Waheed’s government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to Rf443.7 million (US$28.8 million), to be disbursed in monthly instalments over 12 months from July.

The overall deficit for government expenditure has already reached over MVR 2billion (US$129 million). Jihad told the Majlis’ Finance Committee that he expected this figure to rise to MVR 6 billion (US$387million) by year’s end – 28 percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.

Former Minister of Economic Development Mahmood Razee told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”

Foreign investment concern

GMR is not the only Indian company to have expressed concern over political interference derailing their substantial investments in the country, according to a recent report in India’s Business Standard publication.

Officials involved in the Apex Realty housing development project – a joint venture between developers SG18 and Indian super-conglomerate TATA – told the Standard that the government was attempting to take over the site in Male’ given to the company, with the intention of building a new Supreme Court.

“A recent meeting held with the Maldivian Housing Minister is said to have ended abruptly with officials from the firm and the Indian High Commission being asked to leave,” the Standard reported.

GMR has meanwhile been forced to halt construction of the new terminal by the new government. Assorted parties now in the ruling coalition had opposed the handling of its concession agreement to manage and develop INIA while in opposition.

The company has previously sought to downplay its issues with the government in the media, however “public statements and press conferences of some government ministers and coalition party leaders are clearly aimed at arousing public sentiments against GMR and creating undue challenges for us,” the company told the Standard.

“To gain political advantage, some elements of the government itself have started hampering the smooth functioning and development of the airport,” the company added.

The comments follow a US$2.2 million bill handed to the government’s side of the airport contract – the Maldives Airports Company Limited (MACL) – following a third quarter in which the airport developer deducted the airport development charge (ADC) stipulated in its contract from concession fees due the state – the consequence of a Civil Court ruling in September won by the Dhivehi Qaumee Party (DQP) while in opposition.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

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