Thumburi Guesthouse Island invites bids for hotel development

The Maldives Marketing and Public Relations Corporation (MMPRC) has invited developers to submit bids for beachfront hotel development at Laamu Atoll Thumburi Guesthouse Island.

Plots of 5,000 and 10,000 square feet are available for 25 years. The 5,000 square feet plots are to be given out at US$ 30,000 per year with a US$ 100,000 acquisition fee, while the 10,000 square feet plots are to be given out at US$ 66,000 per year with a US$ 200,000 acquisition fee.

An MMPRC announcement  said bidders must submit documents to the Thumburi project management section at the MMPRC office at Velaanaage in Malé by February 26.

The Thumburi project was launched earlier this year with the aim of making land available on the 17 hectare uninhabited island – as well as the linked Hulhiyandhoo island – for local investors to develop hotels, a diving school, water sports centres, restaurants, and shopping centres.


President wanted “credit” for Maamigili Airport lease extension: former transport minister

Former Minister of Transport Dr Ahmed Shamheed has criticised his removal from cabinet last year following the decision to extend the lease of Maamigili Airport by 99 years.

Shamheed has claimed that he was dismissed by President Dr Mohamed Waheed Hassan Manik following the approval of the airport lease extension because the president wanted to take credit for the decision.  The lease was given at the time to the Chairman of Villa Group, Gasim Ibrahim.

Last month, the Anti-Corruption Commission (ACC) began an investigation into the 99-year lease of the airport. According to the ACC President, Hassan Luthfee, the investigation is still ongoing.

Despite the investigation, President Waheed inaugurated Maamigili Airport last week (February 28).

Shamheed claimed that the decision to extend the airport lease had been made whilst former President Mohamed Nasheed had been in power, and that the decision was not one he had made on his own.

“It was the economic committee who had decided on the lease, I never decided on my own. It was initiated by the committee actually, that is how it started,” Shamheed alleged to Minivan News.

“It do not think it was the 99-year lease that was the problem, I heard from people close to him that he thought he should be the one making the decision. He thought he should take the credit for that.”

Shamheed was nominated to his former ministerial post by the government-aligned Jumhooree Party (JP) – of which Gasim is the party’s president.

Speaking back in November 2012, the former transport minister told local media that the documents to extend the airport lease for 99 years had been sent to the transport ministry by Nasheed’s government.

“The current government delayed the matter. The president government only endorsed the decision. It was decided by the NPC [National Planning Council] during the former government,” he was quoted as saying in local newspaper Haveeru.

President Waheed inaugurated Villa International Airport in Maamigili Island in south Ari Atoll on February 28.

Speaking at the ceremony, Waheed thanked Chairman of Villa Group, Gasim Ibrahim, before stating that he was greatly honoured to inaugurate the airport.

The main objective of making the airport an international airport was to improve the country’s transport system and the tourism industry, Waheed said during the ceremony.


MIRA files first GST-related court case

The Maldives Inland Revenue Authority (MIRA) has filed the first case related to the Goods and Services Tax (GST) with the civil court.

The case was filed on September 13 before being formally registered with the court last Saturday, September 27.

MIRA are claiming US$2,606.86 (MVR40,132) from DeMal Pvt Ltd for Tourism Goods and Services Tax (T-GST) and the fines incurred for non-payment.

T-GST was first introduced in September 2010 before being subsumed by Goods and Services Tax Act one year later.

GST currently imposes a 6 percent tax on non-tax goods and services in the country. T-GST is currently taxed at 6 percent but will be raised to 8 percent on January 1 2013.

The combined GST revenue stream has accounted for nearly 35 percent of MIRA’s income this year – over US$69million (MVR1.7billion).

Director General of MIRA’s revenue service Fathihullah Jameel was unavailable for comment at the time of press.

MIRA’s Commissioner General of Taxation Yazeed Mohamed last week lamented the inability of the authority to collect certain fees owed to the government, accusing the tourism ministry of being a major part of the problem.

Yazeed singled out the issue of tourism land rent as a major source of unclaimed revenue, arguing that MIRA could only pursue the cases through the courts.

“If rent is not paid we have to take it up in court. That is to obtain payments not paid for a certain period. Then it is used as an excuse. From that point on they get a free license to stay without making payments. Once a case is filed in court, it can go up to two years without a single payment,” Yazeed told Haveeru.

MIRA’s website shows that the authority is actively pursuing nearly US$17million (MVR261.8million) in fees and fines, with 85 percent of listed cases relating to land rents.

The biggest cases currently being pursued, in terms of revenue being claimed, involve the operators of Six Senses Laamu and Mehudufushi Island Resort, from whom MIRA is claiming US$3.1million (MVR47.7million) and US$3.2million (MVR49.2million), respectively.

The Medhufushi Island Resort case is also among those which have been registered with the court for the longest time. The case was first registered in July 2011 and has seen five hearings, according to MIRA’s site.

Another longstanding and significant case is that concerning the operators of Filitheyo Island Resort, who are being pursued for around US$2million (MVR30.8million) in a case first registered in June 2011 which is said to have had three hearings.

MIRA’s monthly figures show that tourism land rent for the year so far is only three quarters of that collected by the same point on 2011.

The tourism ministry hit back at this criticism earlier this week, with State Minister Mizna Shareef telling Minivan News that MIRA was also empowered to collect rent.

“It is very unfair and inappropriate for MIRA to make these statements,” said Mizna, who argued that the authority had been pressuring the tourism ministry to suspend operating licenses for late-payers without considering the wider implications for the industry as a whole.

“There has to be balance – the industry must be protected while rents are collected,” she continued.

Tourism is by far the largest industry in the country, contributing over 70 percent of GDP via associated industries and 90 percent of all foreign exchange receipts.


Male’ mayor claims latest ‘Usfasgandu’ lease extension agreed before issue of Civil Court block

Male’ City Council (MCC) Mayor ‘Maizan’ Ali  Manik has claimed a lease extension providing the ‘Usfasgandu’ protest area to the Maldivian Democratic Party (MDP) until December was agreed before the Civil Court issued an order blocking such a move.

Speaking to Minivan News today, Manik claimed that unless a further court order was issued that directly prevented the lease extension, which comes into effect later this month, then the opposition MDP would be permitted to continue using the area for their activities up until December 2012.

According to local media, the Civil Court has issued a ‘interim order’ prohibiting the long-term lease of the area by the council or any construction of buildings on the site. The order was granted amidst an ongoing Civil Court case filed by the Ministry of Housing that questions the legality of the MCC’s decision to lease Usfasgandu.

The Sun Online news service reported today that the Civil Court’s interim order would remain in place until a ruling on the issue of the legality of the MCC’s decision to lease the area had been finalised.

However, Mayor Manik told Minivan News that once the present lease agreement finished on September 19, a new agreement said to guarantee the opposition party’s use of the area for an additional three months would come into place.

“The extension was agreed by the council before the court order came into place. The court would otherwise need to send an additional order concerning this extension if they want it stopped,” he claimed.

Minister of Housing Dr Mohamed Muiz said today that he did not wish to comment on the case as it was still being heard at the Civil Court. When questioned as to whether a date had been set for the next hearing of the case, Dr Muiz added that he would need to check with the Attorney General’s Office.

Last month, the Housing Ministry alleged through the Civil Court that the MCC was in violation of both articles five and six of its agreement to lease the land – charges that it contended were proved in documents submitted to the court.

The state also contended at the time that the MMC was deliberately attempting to delay the ongoing case by claiming the charges “were not clear”, according to newspaper Haveeru.

The MCC claimed in response that the Housing Ministry had no evidence to back its claims that its provision of the lease was illegal.

Legal wrangling

The Civil Court case is the latest development in ongoing legal wrangling between the MCC and the Ministry of Housing over the Usfasgandfu site.

Back in August, the Civil Court ruled that the Maldives Police Service did not have legal authority to order the MDP to vacate Usfasgandu on May 29.

The court noted the same day that the a wider dispute between the MCC and Housing ministry over guardianship of the Usfasgandu area could only be settled once the Civil Court reached a verdict on the legality of providing the land to the MDP. The case was filed by the Housing Ministry, which requested the MCC be ordered to hand over the plot.

On May 29, police raided Usfasgandu with a search warrant from the Criminal Court and ordered the MDP to vacate the area before 10pm, after which the Maldives National Defence Force (MNDF) began dismantling the protest camp.

The Civil Court however issued an injunction ordering the security forces to halt the dismantling after the MDP challenged the legality of the operation. The injunction was to stand until the court reached a verdict and was later upheld by the High Court.

Police had obtained a warrant to search Usfasgandu on the grounds that the MDP was using the area as a hub for criminal activity and black magic.  MDP lawyers however argued at court that the warrant did not provide a legal basis to dismantle the demonstration area.

Following the dismantling of the MDP’s protest camp at the tsunami memorial area on March 19, the Male’ City Council (MCC) leased the Usfasgandu area to the former ruling party for three months, prompting repeated attempts by the government to reclaim the area.

The MCC – which has nine MDP councillors and two government-aligned Dhivehi Rayyithunge Party (DRP) councillors – refused to hand over the area to the Housing Ministry despite a cabinet decision authorising the Housing Ministry to reclaim the plot.


Government’s changes to resort lease payments will cost Maldives US$135 million: MDP

The new government’s decision to allow extended resort leases to be paid in installments, rather than upfront at the end of the lease, will immediately take US$135 million of the country’s coffers, the Maldivian Democratic Party (MDP) has claimed.

New Tourism Minister Ahmed Adheeb was not responding at time of press. Former Tourism Minister Dr Mariyam Zulfa explained that Nasheed’s government had offered resorts the option of extending resort lease periods from 25 to up to 50 years.

“Under the regulations the resort lease period was extended to 50 years, with a clause that this would cost US$100,000 every year. But the regulations left open to interpretation how this was to be collected,” she said.

“The Nasheed government had requested that those resorts extending to a 50 year lease pay in a lump sum,” she said, “but while I was Tourism Minister, Gasim Ibrahim and Ahmed ‘Redwave’ Saleem kept pressuring me to let them pay on a yearly basis. They didn’t want to give any money to the government, and soon after the government changed they got what they wanted. [The installments] will only be payable at the end of the current lease periods – it is a huge loss to the treasury.”

According to the MDP, 25 parties had paid the new lease under Nasheed’s government, while a further 90 parties had signed up to extend the lease.

“Some of the resorts wanted it because it increased the value of the property, and therefore increased the value of the government’s asset,” Dr Zulfa explained. “Properties with a 50 year lease paid up front are much more attractive to investors, and encourage development.”

Dr Zulfa contended that not only did the change in policy forgo the country future earnings, “but now they’ve taken a sovereign loan of US$50 million – Tourism Minister Ahmed Adheeb was boasting about it on his Facebook page.”

“They said they need it to finance the budget shortfall – but what shortfall? There was no shortfall – not until they gave this loophole to the coup people who now won’t have to pay anything. They don’t care about the common people – infrastructure projects all over the country have stopped and contractors have been sent home. People [on the islands] are angry, upset and despairing,” Zulfa claimed.

Secretary General of the Maldives Association of Tourism Industry (MATI), ‘Sim’ Mohamed Ibrahim, said he couldn’t speculate on the impact of the decision, but said that negotiations to pay leases in advance had begun during Gayoom’s tenure as President.

“Resorts were willing to pay the government in advance for extensions of their lease,” he explained. “It was not just for development, but because it increases the value of a property and gives investors confidence. We recognized in good faith at the time that the government was in serious need of a cash injection.”

“Obviously, some people don’t agree with that. This came into effect during Nasheed’s government, which argued that if the lease was going to be paid annually, it would be renewed annually. Obviously the interpretations of the law are different.”


Foreigners now able to buy homes in Maldives: New York Times

The Maldives has opened a path for foreigners interested in buying homes in the tourist destination, the New York Times reports.

“Until last year only big-brand hotels were able to secure leaseholds on some of the country’s 1,200 islands. But then the government of President Mohamed Nasheed started allowing designated resorts to sell leases to individuals.

“The primary market is the more than 600,000 tourists who each year visit these islands, home to 315,000 permanent residents.

“The leases, which are for as long as 50 years, are first sold to the resort operator, who then sells them as part of a vacation villa package. The leases can be renewed before expiration, but if the government chooses not to renew it has the legal requirement to buy the property at market value. The resale arrangements vary by resort.

“The first company to introduce a residence option was 12 Blues in October 2010 on the island of Lundhufushi, 130 kilometers, or 80 miles, from the capital of Malé. Of the 40 villas planned, 10 already have been sold, and 10 more will be put on the market next year. The resort was designed by the Singapore company, and is intended to include a Franklyn hotel, spa and a variety of restaurants and bars.

“Properties are priced from $2.3 million, or €1.7 million, and owners who want to put their homes into the resort’s rental pool will receive six weeks’ use per year and 50 percent of the net revenue.

“While the ability for owners to arrange rentals has been a key factor in some sales, many buyers have simply always wanted to own in the Maldives, according to Wally Fernandes, a manager at the newly opened Six Senses Laamu resort on the island of Olhuveli, where villas are also for sale.”

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Male International Airport leasing deal signed after Maldives government appoints four new MAC board members

The Maldives government signed the 25 year lease agreement with India’s GMR Infrastructure today after appointing four new members to the Maldives Airport Company board ,according to Haveeru.

The signing ceremony came hours after the Majlis passed an amendment to the Public Finance Act, specifying that state assets could only be leased or sold with the approval of the Majlis.