An Indian infrastructure company and a bank successfully lobbied India for sanctions on the Maldives over the 2012 cancellation of a deal to develop the international airport, the government has claimed.
The government made the allegation last month at a Singaporean arbitration tribunal, where India’s Axis Bank is seeking the repayment of a US$160 million loanfrom the Maldives. The loan was given to GMR group in 2011 to upgrade and manage the Maldives’ main airport.
India had tightened visa regulations for Maldivians and ceased exporting some construction materials to the Maldives, after the government took over the airport in 2012, but neither India nor the Maldives had explained the reasons for the sanctions.
India only lifted the restrictions after President Abdulla Yameen was elected in November 2013.
In its submission to the Axis Bank tribunal – obtained by Minivan News – the government claimed the bank had been involved in an “attempt to secure political pressure from the Indian government” to prevent cancellation of the deal.
The Axis Bank in 2012 also told the government it would “approach the regulatory-diplomatic authorities in India” after GMR was ordered to handover the airport, the government said.
GMR also wrote to the prime minister in August 2012 “requesting intervention by the Indian government, when it was clear that future of the concession agreement was in jeopardy,” the government said.
The campaign by GMR and Axis Bank led to Indian officials including then-Prime Minister Manmohan Singh telling ex-president Dr Mohamed Waheed that the “Indian government stood ready to assist GMR in making sure [the cancellation] did not happen.”
According to minister Mohamed Hussain Shareef, “the message [Waheed] got from them was confident and unbending: they expected [the Maldivian government] not to take any action to terminate the concession agreement”.
The Indian government subsequently “insisted on the repayment of outstanding debts of US$100m” in mid-November 2012 and warned of “repercussions” shortly before the agreement was terminated, lawyers representing the Maldives said.
The lawyers also alleged that then-Indian high commissioner to the Maldives “sought to intervene through several meetings with [then-defence minister Mohamed Nazim] in which he asked the Maldives to cooperate in allowing GMR/GMIAL back into the airport.”
Nazim in his testimony said that the message from India was “either back off or suffer the consequences.”
Documents disclosed during arbitration proceedings also showed that the Axis bank’s officials had met the Indian High Commissioner in January 2013, a month after the government took over the airport, lawyers added.
The submission noted that former president Mohamed Nasheed stated after a visit to India in February 2013 that “India believes the deteriorating ties between Maldives and India will recover” if the 25-year contract is restored.
“On 11 March 2013 several Indian Navy attack craft were reported as having conducted exercises just outside Maldivian territorial waters,” it added.
In February 2013, the Indian government revoked a special quota afforded to the Maldives for the import of aggregate and river sand. The move led to a shortage of the supply of construction material and rising costs for construction companies.
The current Indian Prime Minister Narendra Modi meanwhile invited the GMR chairman to a state banquet in honour of President Abdulla Yameen in January 2014, lawyers representing the Maldives noted.
Minivan News is awaiting a response to the allegations from the Axis Bank and GMR, while the government has declined to comment on the ongoing arbitration.
The Axis Bank is seeking repayment of the US$160 million loan as well as an additional US$10 million as interest and fines from the Maldivian government. The bank contends that state is liable for the loan in the event of an early termination or an expropriation of the airport.
However, the government has argued that declaring the concession agreement invalid from the outset does not amount to an early termination. The government also accused the Axis Bank and GMR of colluding to extract large sums of money, claiming the developer paid for the bank’s litigation fees for the separate arbitration process.
The Axis Bank meanwhile dismissed the argument as “highly semantic” and stated: “what words were used by the government to characterise its own acts are irrelevant to establishing whether the acts of the government amounted to an expropriation.”
Verdicts are expected in both the GMR and Axis Bank arbitrations in June.
A team of Indian experts will be visiting the Maldives to study how India can help to launch and operate the nation’s first communications satellite, reports local media.
Minister of Defence Colonel (Retired) Mohamed Nazim told local media that during his visit to India earlier this month the country expressed interest in the project.
“The team will come to find out how we want to operate it and carry out a study. They have expressed interest to assist us in the project,” Nazim said.
The Indian Space Research Organisation (IRSO) did not initially submit a proposal, considering the project “not viable” given China’s interest and presence in the Indian Ocean Region. They later requested the Indian Ministry of External Affairs to partly subsidise the project, Indian media reported earlier this month.
Indian security agencies are concerned about increased Chinese participation in neighboring countries’ communication satellite projects, according to various Indian media outlets.
Nazim stressed that India’s interest would “have no bearing” on the companies that previously submitted proposals, however India’s offer was “different” compared to the other proposal submissions.
“We will know how we want to proceed after India does its study,” Nazim said.
He added that the Maldives’ Cabinet will decide which company to awarded the project, according to local media.
The establishment and operation of a communications satellite would provide local TV stations an opportunity to use the technology, as well as benefit the Maldivian economy, said Nazim.
The Communications Authority of Maldives (CAM) Chief Executive Officer Ilyas Ahmed has previously denied receiving an official proposal from India, however a proposal from the Indian government “must be considered”.
Companies from China, UK, Netherlands, Cyprus, Luxembourg and Thailand had “expressed interest” prior to the proposal submission deadline, which the CAM extended from January 31, 2013 to February 28, 2013 after interested parties expressed difficulties because the previous time period for submission was too short.
India has pledged to provide the Maldives with an assortment of defence equipment, infrastructure, and training, reports local media.
Seven radar systems, adding to the three already in place, are being given by the Indian government, as well as a helicopter for search, rescue and emergency evacuation in the northern Maldives.
Financial assistance is also being provided to construct a Coast Guard building and a harbor for Coast Guard vessels, in addition to establish a Maldives National Defence Force (MNDF) composite training centre in Lhaviyani Maafilaafushi.
The pledges were made by Indian Defence Minister A K Antony during Minister of Defence and National Security Minister Colonel (Rtd) Mohamed Nazim’s recent visit.
Maldivian border control faces an uncertain future and a potential reversion to a ‘pen and paper’ system, an informed immigration source has warned.
The warning follows the donation of a passenger information system by the Indian government, in a bid to strengthen the Maldives’ ability to monitor arrivals.
The new Advance Passenger Information System (APIS), which is designed to provide passport information and other details of incoming travellers before their arrival, was formally handed to Maldivian officials on Sunday (March 17) by outgoing Indian High Commissioner Dnyaneshwar Mulay.
The system has been in place at Ibrahim Nasir International Airport (INIA) for the last few months and is one of a number of components used by immigration officials.
According to the Indian High Commission, the system was requested by the previous government and installed by a special technical team to ensure it functions correctly.
The APIS technology is not however a direct replacement for the existing border control system, provided by Malaysia-based Nexbis, authorities in the country have said.
Nexbis is currently involved in legal wrangling over whether the country’s Anti-Corruption Commission (ACC) has the power to compulsorily request the government to cease all work in relation to the border control system agreement.
The Nexbis border control system is still presently in use by immigration officials at INIA, after the Supreme Court issued an injunction halting the scrapping of the controversial system by parliament.
However, a source with knowledge of current immigration practices said no alternative border control system was available should the government terminate its concession agreement with Nexbis’.
“So far we don’t have any alternative to the [Nexbis] system going forward. We are using the system and waiting for the courts to decide. However, if the court decides [in favour of the ACC], we will need a new system in place,” the source told Minivan News. “Without [an alternative], the system would go haywire. A replacement would have to be found. We cannot go back to the 1970s and just use books and paper.”
The Indian APIS system will speed up the processing of arrivals through the immigration gates, as well as improve wider resources available to immigration officials, the source said.
APIS system is an internationally recognised means of collecting passenger data before an individual arrives at their destination, designed to allow immigration authorities to know if anyone on an incoming service is included on a watch-list or travel ban, authorities have said.
“Use of the system is mandatory for some countries, though not for the Maldives yet,” the source added. “Before they arrive, the system can identify if a passenger is on a watch-list and spot them. This process can be done much quicker now [by immigration officials].”
The data included within the APIS is provided by two of the world’s largest air authorities including the International Air Transport Association (IATA).
Although its use is mandatory for all services into Europe, the service is not at present required for all flight services to the Maldives, according to the source.
“Now we need a mandatory legal framework to make airlines coming into the country comply,” added the source. “There is a heavy charge for using this software, but I don’t think we have to pay at the moment as India has donated the technology.”
Despite legal wrangling over the future of the controversial border control agreement with Nexbis, the same source added that APIS would be compatible with any system used by authorities.
Immigration Controller Dr Mohamed Ali was not responding to calls from Minivan News at time of press.
Trafficking concerns
While refuting allegations of any corruption or wrongdoing in being awarded a contract under the previous government to install and operate a border control system for the Maldives, Nexbis earlier this year said it would not rule out criminal involvement behind attempts to “sabotage” its contract with the government.
Back in January this year, the Ministry of Foreign Affairs inaugurated an initiative targeted at raising awareness of human trafficking issues in the Maldives.
Despite these commitments, the Human Rights Commission of Maldives (HRCM) has accused state and private sector employers in the country of lacking consistency in their efforts to address human trafficking in recent years, preventing “real” change in controlling illegal migration.
Speaking back in February 2013, HRCM member Jeehan Mahmoud told Minivan News that despite attempts under the present government to try and introduce new legislation, the Maldives had made little progress towards improving the treatment and rights of foreign workers over the last four years.
Addressing the current scope of unregistered foreign labour, Maldives Association of Construction Industry (MACI) President Mohamed Ali Janah said an estimated 40 percent of the foreign employees in the sector were thought not to be legally registered.
Considering these numbers, Janah said he too could not rule out the involvement of organised crime within some of the country’s employment agencies, which supply a large amount of foreign labour to building sites in the Maldives.
Correction: A previous version of this article incorrectly stated that the Supreme Court was set to rule on whether Nexbis’ agreement with the Maldivian government to install and operate a border control system was legal. The court case is actually being held to decide on whether the ACC has the power to order a halt to the project. Minivan News has corrected the error.
Mohamed Naseer has been appointed as the High Commissioner of Maldives to India.
President Mohamed Waheed Hassan Manik presented a letter of appointment to Naseer on Sunday (March 10).
Speaking at the presentation, Waheed said he was confident that Naseer would protect and promote the interests of the people Maldives, and work to increase ties between Maldives and India.
The Maldives government has denied it conceded to a deal with the Indian government which resulted in former President Mohamed Nasheed leaving the Indian High Commission on Saturday afternoon, after 11 days in protected diplomatic territory.
A statement released by the Ministry of Foreign Affairs today (February 24), stressed that Nasheed’s exit was not negotiated with the Indian government, adding that it cannot and will not negotiate regarding the charges put against the former president.
“Mr Nasheed went into the High Commission on 13 February 2013 seeking India’s ‘assistance’, and his continued stay and his decision to leave the High Commission was an issue between himself and the Indian High Commission,” the statement reads.
“The government of Maldives’ only involvement in the issue was in the implementation of the court order on the police to produce Nasheed to the court. The said court order expired on Wednesday, 20 February 2013.”
“The government of Maldives also wishes to reiterate its clear and firm position that it cannot, and will not, negotiate the charges laid against Mr Nasheed for unlawfully arresting a judge during his presidential tenure, in January 2012,” the statement continues.
The statement notes that upholding the rule of law and respecting the independence of the three arms of government were a “fundamental pillar” of President Mohamed Waheed administration.
“The charges are laid by the prosecutor general which is an independent institution under the constitution of Maldives. The government has made this position clear to all of its external friends, including India.”
Last night however, UK-based newspaper Daily Mail reported that Nasheed left the high commission following a “deal brokered by New Delhi with the Maldives government”.
The paper claimed that while New Delhi had been accused of shielding a “fugitive” by senior officials in the Maldives, it sent a high-level team to “sort out” the diplomatic crisis.
“Nasheed was assured that that he would be allowed the political and social space that he wants till the elections, but he was made to accept that he would follow the legal process,” a source was quoted as telling the Daily Mail.
The article stated the high-level team sent from India met with various Maldivian officials, including the defence minister and attorney general, to negotiate Nasheed’s “exit conditions”.
According to the Daily Mail, Nasheed was told that his political career would be destroyed “forever” should he stay inside the Indian High Commission, and that his opponents would use it against him in the run up to the September elections.
The Maldivian government was meanwhile told its “rigidity” would impact the country economically and prompt the international community to consider sanctions over possible human rights violations, the source told the publication.
Nasheed’s trial
Nasheed sought refuge inside the Indian High Commission after the Hulhumale’ Magistrate Court issued an arrest warrant for police to produce the former president at the court for his trial hearing on February 13.
Nasheed has maintained that the charges against him – of detaining the Chief Criminal Court Judge during his final days in office – are a politically-motivated effort to prevent him contesting the 2013 elections.
A second arrest warrant was issued by the court on February 18 whilst Nasheed was still inside the Indian High Commission and required police to bring Nasheed to Hulhumale’ court on February 20.
The warrant expired after the hearing was cancelled following Nasheed’s refusal to leave the commission building for his scheduled trial.
After 11 consecutive days inside the High Commission, Nasheed emerged on Saturday (February 24) and subsequently held a press conference in the Dharubaaruge exhibition hall, across the street from the party’s former protest site at Usfasgandu.
Nasheed emphasised his desire for stability to be restored, following eight days of continuous protests by the MDP, dozens of police arrests, and a violent attack on a Maldivian journalist.
Indian hackers have taken over the website of the Maldives Airports Company Limited (MACL), the government company that has ordered the GMR-Malaysia Airports Holdings Berhad (MAHB) consortium to hand over the airport by the end of next week.
The hackers, calling themselves the “Indishell Defacers Team”, replaced the MACL homepage with a black background and a pair of eyes Thursday (November 29) evening, demanding that the Maldives “stop defaming Indian Reputed Companies & learn how to run a website and secure it first.”
“If you don’t know how to secure a website, can you run an Airport securely, MACL?” the hackers added, along with a promise to “do anything for India”.
As of Saturday afternoon, the MACL website remained suspended. MACL CEO Mohamed Ibrahim declined to comment, stating only that he was in a meeting and that the company would “issue media statements from time to time”.
Following the government’s announcement last week that its contract with GMR was void and it would therefore be issuing a seven day ultimatum for the investor to leave the country, MACL claimed that local employees who applied for jobs with the state operator would “have their present basic salary, allowances and other benefits, and training and development opportunities maintained under MACL management.”
The same day, the Immigration Department announced that it would cease renewing the work permits of GMR’s 140 foreign employees, while the Civil Aviation Authority (CAA) sent GMR a letter stating that the operator’s aerodrome certificate – the regulatory authority to operate an airport – would be withdrawn at 11:59pm on December 7.
MACL has also filed a complaint with the Maldives Police Service, alleging that the contract was given to GMR in 2010 “unlawfully”.
GMR has meanwhile stated that it has no intention of leaving without exhausting the legal process and seeking due compensation – the company has stated that it has already invested between US$220-240 million of funds set out for the US$511 million airport development project.
Arbitration proceedings over the contentious airport development charge were already ongoing in Singaporean courts prior to the government’s declaration that the contract was void.
GMR is currently seeking an injunction against its eviction in the Singapore courts, with the next hearing reportedly set for Monday.
Malaysian visit
Meanwhile, Malaysian Foreign Minister Anifah Aman and MAHB Managing Director Basir Ahmed visited the Maldives on Friday to try and resolve the situation.
Aman told local media at the airport that his discussion with Maldivian Foreign Minister Dr Abdul Samad Abdulla was “fruitful”.
“As we are two friendly nations, there is no reason why this matter cannot be resolved,” Aman was reported as stating by Haveeru.
The reaction from the Indian government and industry groups has been substantially less prosaic.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM), expressed “serious concern over the unilateral decision of the Maldives government” and the “violation” of the country’s concession agreement with GMR.
The chamber of commerce group urged the Indian government “to take immediate steps as may be necessary to protect the interests of GMR, its people working in Male’ as well as the Indian banks against such irrational moves.”
Lenders to GMR, including the lead underwriter Axis Bank, Indian Overseas Bank and the Indian Bank have meanwhile written to the Maldives government demanding that their interests be protected. US$368 of the US$511 million project is a loan component, most of it financed by Indian companies.
The Indian government is meanwhile reported to be reconsidering its bilateral aid assistance to the Maldives.
A succession of Indian loans have been crucial to the Maldives’ ability to pay its operating costs, including civil servant salaries.
Days prior to the government’s decision to void the GMR agreement, India had requested repayment of US$100 million in treasury bonds by February 2013.
A further US$25 million state loan from India was found to have been delayed after the Maldivian government failed to submit the requested paperwork, according to an Indian diplomatic source.
Overall Indian aid to the Maldives has totalled MVR 5 billion (US$324 million) over the last three years, according to official statistics from the Indian High Commission released in May.
In additional to credit facilities, purchase of bonds and provision of equipment and financial assistance, India provided the government substantial aid to hold the SAARC Summit in Addu Atoll last year.
In the last three years, India funded the construction of the Faculty of Tourism and Hospitality, provided US$4.5 million for the development of Indira Gandhi Memorial Hospital (IGMH), US$25 million for a police academy, US$9 million for police vehicles, US$1.5 million for a coastal management centre, US$1 million for the purchase of pharmaceuticals and sports equipment, US$5.3 million for the Institute of Information Technology, and most recently, the construction of a military hospital for the Maldives National Defence Force (MNDF).
Credit facilities of US$40 million were provided for the construction of 500 housing units, while the State Bank of India (SBI) had spent US$100 million of treasury bonds (with a further US$100 as standby credit). India also provided US$28 million for the development of human resources in the Maldives.
Moreover, a substantial amount of private lending to the resort industry development takes place through Indian banking institutions active in the country, most notably SBI, and a significant quantity of food to the import-dependent Maldives (including basics provisions such as eggs) is supplied through trade concessions with India.
India has also provided extensive military support to the Maldives, including supplying vehicles and a helicopter.
“An impact on ties is inevitable,” Indian newspaper The Hindureported a senior Indian government source as stating, after last week’s decision by the Maldivian cabinet to evict GMR.
“For the time being, we have to consider how things stand and how to proceed,” an official source told the paper, “when asked whether India would continue assisting the Maldives in combating its financial difficulties, including paying salaries to civil servants and shoring up the surveillance and reconnaissance ability of its security forces.”
“Stability can come only after elections. All of them [political parties] are looking for some cause célèbre. GMR has unwittingly become a major political issue in the Maldives,” an official source told the paper.
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”.
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.
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.”
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.
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.
The Finance Ministry has requested companies that submitted bids for housing projects in Male’ and Gaaf Dhaal atoll Thinadhoo to re-submit the bids before Tuesday, October 25 with certain details.
Six Indian companies had submitted bids for the project on September 26. The project, supervised by the Housing Ministry, will erect 500 housing units at the Maafannu Boduge land plot, the former VTC land plot on Alikilegefaanu Magu, and the land plot where debris is dumped, reports Haveeru..
The Indian government granted the Maldives a US$40 million loan for the project.
State Housing Minister Akran Kamaluddin told Haveeru News that no bids were cancelled.
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