Tag: maldives news

Chinese firm to take over Gaafaru wind farm project following collapse of GE/Falcon Energy deal

Chinese electrical manufacturing firm XEMC will take over the development of the government’s flagship renewable energy project, the Gaafaru wind farm, following the behind-the-scenes collapse of the US$200 million dollar agreement between GE and Falcon Energy late last year.

Under the new agreement between XEMC and the State Electric Company (STELCO), XEMC will install turbines capable of generating 50 megawatts and submarine cables servicing the greater Male’ area, under a build, own and operate arrangement.

A backup liquefied natural gas (LNG) plant will also be built, capable of providing up to 30 megawatts on windless days, or when there is not enough wind to meet demand. The wind farm will provide up to 20 megawatts to STELCO’s grid, supplementing its current install capacity of 38.76 megawatts.

STELCO’s Managing Director Dr Mohamed Zaid told Minivan News that under the 25 year agreement the new facility will be owned by XEMC and the electricity bought by STELCO, with construction of the wind turbines starting within three months.

XEMC was selected through an open tender, Dr Zaid said, adding that STELCO had not signed a private partnership agreement with GE/Falcon.

“Initially we did not limit this project to a specific renewable energy source, but the XMEC group recommended using wind turbines given their experience with the technology,” Dr Zaid said, during the signing event held recently at the President’s Office.

He said was unable to provide reasons for the collapse of the GE/Falcon Energy deal “at this time”, and the circumstances around it remain unknown.

Minivan News was told that the reasons included a lack of consensus between the parties involved, and whether they had the requisite experience: “Falcon didn’t work out,” said one informed source, while “a lot of things were not carried out according to the memorandum of understanding,” said another. Local newspaper Haveeru meanwhile reported that there were concerns about pricing and profitability of the enterprise.

The original much-publicised project was to be central to the government’s ambition for the country to become carbon neutral by 2020, and promised a 75 megawatt wind farm in North Malé Atoll that was to produce enough clean energy to allow Malé, Hulhulé and a number of resorts to “switch off their existing diesel power generators”, according to the President’s Office at the time. Excess electricity on windy days was to be diverted to a desalination plant located on Hulhumale’.

The project was, according to President Mohamed Nasheed during its launch, intended to “reduce fuel imports into the country by 25 percent and cut carbon emissions by 40 percent.”

Minivan News raised concerns in an article published in April 2010 that according to figures published in a 2003 report by the US National Renewable Energy Laboratory (NREL), North Malé Atoll had an annual average wind speed of 4.9 m/s (17.7 km/h), while a 2005 report by the American Wind Energy Association (AWEA) described the minimum average wind speed needed to run a utility-scale wind power plants as 6 m/s (21.6 km/h).

That report stated that because “power available in the wind is proportional to the cube of its speed… doubling the wind speed increases the available power by a factor of eight.”

For example, a turbine operating at a site with an average of 20 km/h should produce 33 percent more electricity than a site operating at 19 km/h, because the cube of 20 is larger than the cube of 19.

This means that a difference of just 1 km/h in wind speed could significantly bring down productivity of the wind farm.

The Falcon/GE project’s local lead, Umar Manik, told Minivan News at the time that due to engineering advances the Gaafaru wind farm was expected to run on a minimum wind speed of 5.7 m/s.

However at time of signing the MoU, Falcon had still to raise the required investment with international banks, which by the time of Minivan News’ 2010 article had almost doubled to US$370 million from the original estimate of US$200 million.

“International banks are very keen to invest in the Maldives,” Manik told Minivan News at the time, “but they need eighteen months of wind surveys. They are becoming partners, they don’t want to lose their money.”

The turbines were to be planted once six months of data had been gathered, “to give us full confidence,” according to Manik.

While data was to be gathered by a 150-foot tall wind mast installed in the area, a LNG backup generator with a capacity of 50 megawatts was to be constructed with a supply contract reportedly signed with a Saudi Arabian firm. The deal was quietly terminated in late 2010.

Minivan News was unable to establish the credentials of Falcon Energy, which no longer appears to have a web presence. The Singapore-listed Falcon Energy Group, a major offshore oil and gas player that was widely presumed by the international energy media to be the party involved in the Gaafaru project, denied any knowledge of its existence when contacted by Minivan News last week. GE meanwhile failed to respond to enquiries.

Falcon Energy was introduced in the President Office’s original release as having commissioned “onshore and offshore wind farms totalling 1,500 MW over the past 10 years, in the UK, Spain, Portugal, Ireland and Canada.”

Interviewing Manik last April, Minivan was led to understand that Falcon Energy Group was based in the UK and represented a consortium of four companies – two from the UK, including Falcon Energy, one from Holland and another from Saudi Arabia.

The government’s Isles project website states that when the MoU signed with Falcon Energy was terminated a decision was made to proceed with a new group identified as ‘STAR Renewables Consortium’, a joint venture represented by the Saudi Trading and Resources Company. However an MoU was never signed as STELCO elected to proceed with an open tender – a process that led to the current deal with XEMC.

Minivan News understands that at least two years of wind data needs to be collected before the Gaafaru venture can proceed – data that should be available by the end of the year.

“The only wind speed data currently available is not good enough for a commercial venture,” an informed source told Minivan News. “That will determine what sort of turbines are needed – some are better at low wind speeds.”

LNG was selected as a backup option due to the ability to rapidly power it on and off as demand necessitated, however “at some point we will want to switch off the gas.”

Minivan News understands that the intention is to ultimately power Male’ and its surrounding islands with a mixture of wind, gas and marine current generation, with potential for the latter presently being determined by a £48,000 (US$76,000) study led by Scotland’s Robert Gordon University and due to report this year.

Foreign investment in such projects is subsequently to be coordinated by the government’s new office of Renewable Energy Investment, operating under the Ministry of Economic Development.

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PA MP announces decision to leave party following coalition split

MP of the opposition-aligned People’s Alliance (PA) Ahmed Rasheed has announced on MNBC his decision to leave the party “to better serve the public as an independent.”

Rasheed, who spoke to the state broadcaster on Sunday, also said he was open to joining other parties “if it was within the public interest.”

The PA’s acting Secretary General Ahmed Musthafa however told Minivan News today that he was unable to confirm whether Rasheed had left the party: “We don’t believe he has moved. I saw him yesterday,” he said, adding that the party would issue a formal communication on the matter in the next few days.

“Maybe he has been pressured by another party such as the MDP to join, although I don’t think he will,” Musthafa said.

Once Rasheed officially informs parliament of his new status as an independent, his departure from the PA could force the committee composition to be revisited for a third time this session.

While the PA would be entitled to fewer seats, parliamentary rules dictate that Rasheed must be given a seat on at least one committee as an Independent.

MP Ahmed Rasheed represents the constituency of Isdhoo in Laamu Atoll, an area of strong opposition support that voted largely for PA candidates under its former coalition agreement with the Dhivehi Rayithunge Party (DRP).

The PA decided decided on July 13 to break the longstanding coalition agreement, after internal strife within the DRP saw the party split into factions loyal to its leader Ahmed Thasmeen Ali or the party’s ‘honorary leader’, former President Maumoon Abdul Gayoom.

Eleven of the DRP’s MPs met with other opposition parties, including the Jumhoree Party (JP), the Dhivehi Qaumee Party (DQP) and an independent MP to discuss the creation of a new voting bloc, one which could see the DRP’s majority control of parliament reduced to 13-15 MPs.

DRP MP Abdulla Mausoom raised concern following the split that the PA’s decision to break the coalition agreement would upset constituents in Laamu Atoll who “are very loyal to the DRP but voted for the PA tag.”

Z-DRP MP Ahmed Mahlouf responded that such islands “voted for the PA because President Gayoom asked them to do it. Even now Zaeem (Gayoom) is with the PA, they are working together. Voters in Laamu didn’t vote for Thasmeen – they voted for Gayoom.”

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Specially-trained officers patrolling the streets during Ramadan to reduce crime

Police Chief Inspector Ahmed Abdul Rahman has announced that specially trained police officers will be patrolling the streets of Male’ during Ramadan, in a bid to counteract a spike in crime observed during the Holy month.

Speaking to the press, Rahman said that every year during Ramadan assault and robbery cases have been observed to increase than compared to other months of the year.

Police have noted that thieves become more active between sunset and sunrise, with records showing that most of the theft and robbery cases have occurred during this time.

The specially-trained police officers will patrol the streets and keep an eye on crime hotspots, he said.

He called on everyone to be more cautious during the month of Ramadan and to upgrade the security of offices and homes.

President Mohamed Nasheed last week announced that almost 400 convicted criminals will be released from prison to offer them a second chance to enter society as a reformed person.

Although the public has raised concern over the issue of  impending release of close to 400 convicted criminals, Press Secretary for the President Mohamed Zuhair has said it will not result in a spike in crime rates in Male’.

““Out of the 119 people released on a previous occasion only two people have had to be taken back to prison for committing an offence,” Zuhair said.

He added that the inmates will be released on the understanding that they would be returned to prison to complete the rest of their sentences if they committed any sort of offence in the next three years.

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Government inviting foreigners to usurp Maldivian businesses, claims MP Muttalib

A business registration bill proposed by the government as part of its economic reform package is “a deceptive ploy” to “open up the country to foreigners”, warns MP Ibrahim Muttalib.

During today’s parliamentary debate, the Jumhooree Party (JP) MP argued that provisions in the legislation allowing foreign businesses to establish branches in the Maldives and requiring at least US$1 million as capital “proves that this bill was drafted to allow foreigners to easily do business in the Maldives.”

“Under this law, a person with US$1 million would be able to easily register a business in this country,” he explained. “Considering the state of the Maldivian people, there won’t be any businessman who has US$1 million at hand. [Foreign businesses] will be able to conduct wholesale business and sell day-to-day necessities.”

Muttalib added that local businesses that trade in footwear and garments “would not have US$1 million, except for a very few people.”

He urged MPs to consider the consequence of foreign businesses entering the footwear, garment and wholesale industry: “What is being done today is part of a neighbouring country’s efforts to open up this country for its citizens,” he said.

“The Indian government proposed opening up the service industry, tourism, travel agencies, construction, health industry, social security, financial industry, maritime travel, air travel and airplane repair under a SAFTA [South Asian Free Trade Association] agreement,” he claimed. “But because all our local industries opposed it the government has decided to do it under a law.”

While the bill specified businesses that could not be conducted by expatriates – such as fisheries, agriculture and selling commodities out of a private residence – all other kinds of businesses were “opened to foreigners” under the proposed law.

“Honourable Speaker, I do not want to live in this country as a third-class citizen,” he said.

Foreign businesses understood that a relatively small amount of capital was enough to “easily bribe officials” and secure investments such as uninhabited islands, Muttalib claimed.

According to the draft legislation, the purpose of the bill is to ensure that businesses, partnerships and cooperative societies operating in the Maldives are registered; specify what kind of businesses must be registered along with procedures for registration; and oblige businesses to submit information to the Registrar of Businesses.

MP Abdulla Mausoom of the Dhivehi Rayyithunge Party (DRP) meanwhile expressed concern that allowing foreign businesses to establish branches in the Maldives could pose challenges to local industries.

Mausoom argued that the US$1 million stipulated as a minimum capital investment for foreign businesses was too low: “All around us, whether it’s India, Celyon [Sri Lanka], Singapore, Malaysia or Africa, are looking at the Maldives; [because] their countries are saturated they are ready to do business in Maldives.

“If we open up too easily like this, [foreign] businesses will pose serious challenges to our small businesses,” he said, suggesting more restrictions to protect local industries.

MP “Reeko” Moosa Manik, acting chairperson of the ruling Maldivian Democratic Party (MDP), noted that there were numerous unregistered businesses operating in the Maldives by foreign parties.

“In the woods in some islands, especially [Laamu Atoll], there’s even an immigration department,” he said, adding that he has learned of work visas approved for ten people under the name of one person. “There’s no particular business done by these people, in sum they’re involved in all business.”

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BML records 40 percent increase in half-yearly profits

The Bank of Maldives (BML) has recorded a significant increase in operating profits of almost 40 percent in the first half of 2011, according to half-yearly results released yesterday.

Notably, the bank’s operating profits for the second quarter of 2011 were Rf 132,201,055 (US$8.57 million) in the second quarter of 2011 compared to Rf 79,872,266 (US$5.17 million) for the same period in 2010.

BML said in a statement that the total profits would be allocated to cover loan loss provisions in the second quarter of 2011. The bank will also not issue dividends to shareholders this year.

The bank also announced the launch of a business transformation programme that will see it evolve into a financial services institution “with a stronger focus on customers and service provision”.

International human resource consultancy firm Hunter Roberts, which has worked with major UK banks including Barclays, had been appointed to develop effective employee policies and provide staff development, BML said.

Speaking to Minivan News in April following his appointment, BML’s new CEO Peter Horton identified service provision as a particular area of improvement for the bank.

“I think this business grew very rapidly, not just the loan base but in terms of customers, especially if you look at what BML was 10 years ago,” he said at the time.

“That goes some way to explaining why we have such big queues in the banking hall. When I came out for my interview I took the time to walk around Male’ several times – and go in very incognito to see the BML branch. I have to experience what the customer experiences, and I don’t think that experience is what any of us want.”

Horton spent 15 years with Barclays in the UK before moving to Africa to run the bank’s corporate turnaround teams, where he became experienced in dealing with distressed portfolios and problem lending. Speaking to Minivan News in April, he identified BML’s high non-performing loan problem as a key impediment to the bank’s performance, noting that it not only had a carrying cost “but it also creates a certain mood around the business internally and externally.”

Horton also worked in the offshore finance field with a subsidiary of the Canadian Imperial Bank of Commerce in the Bahamas, and has championed the potential for the Maldives to develop an offshore finance sector.

“If you look at the world’s emerging economies, which are moving West to East, our proximity to India and to a lesser extent Sri Lanka, and with direct flights to most South-East Asian cities, should be a huge advantage for us,” he told Minivan News.

“The majority of offshore banking centres do rely on imported people and institutions. They are truly migratory these days. We are in a global economy now where things move overnight, so if you were able to do the things to attract people, it is very, very doable.

“The other thing is having sufficient protection around the business – having a strong regulator, a strong legal system, and probably some degree of monetary protection. If a private bank is bringing dollars into the country, there needs to be some degree of certainty that the dollars can sit in the country quite safely,” he said.

The Maldives Inland Revenue Authority (MIRA) has meanwhile announced a 13 percent increase in bank profit taxes collected in 2010 revenue. The country’s six banks paid Rf 226 million (US$14.65 million) in taxes, it said.

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President extends Ramadan greetings as Holy month begins

President Mohamed Nasheed has extended Ramadan greetings as the Holy month begins in the Maldives.

In a statement, President Nasheed emphasised that Ramadan was an occasion for good deeds and helping the less fortunate.

Nasheed also sent Ramadan greetings to the leaders of other Islamic countries.

During the month of Ramadan the pace of life in Male’ slows and the capital’s vibrant cafe culture shifts to the evening, after sunset, while the population fasts during the day.

Government offices close at 1:30pm during Ramadan, rather than 4:00pm, and the Islamic Ministry holds special religious sermons every day. Foreigners are requested to respect the custom and refrain from eating or drinking in public before sunset.

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Tourism boost from Baa Atoll’s UNESCO status a management challenge

The designation of Baa Atoll as a UNESCO World Biosphere Reserve is a significant achievement for the Maldives but makes proper management all the more imperative, government organisations and environmental NGOs have said.

Baa Atoll was last month added to the UN body’s global list of biosphere reserves, placing it in the company of world famous sites such as the Komodo in Indonesia, Uluru (Ayer’s Rock) in Australia and the Galapagos Islands.

The listing recognises “where local communities are actively involved in governance and management, research, education, training and monitoring at the service of both socio-economic development and biodiversity conservation,” UNESCO said in a statement.

It has also prompted a surge of tourism interest in Baa Atoll, requiring local bodies to balance the impact and sustainability objectives of the biosphere with the new income.

Director of the Environmental Protection Authority (EPA) Ibrahim Naeem said it took five years of lobbying for Baa Atoll to become the first globally recognised biosphere in the Maldives.

“The whole atoll has been zoned into three categories, limiting activities conducted there,” he explained.

‘Core areas’ account for 10 percent of the atoll with no extraction activities permitted – “look and see only”, Naeem explained. Buffer areas limit some activities while transitional areas allow most activities if conducted in a sustainable fashion.

Exceptionally unique areas, such as Hanifaru Bay, have a management plan to limit access, Naeem explained: “We allow resorts and safari boats to visit Hanifaru Bay on alternate days to avoid conflicts,” he said, adding that the EPA had appointed a ranger to monitor vessels in the area and was training several more to cover the rest of the atoll.

At the beginning of the process many locals expressed reluctance about the atoll being designated a biosphere, fearing that their traditional fishing areas would be restricted, he acknowledged.

That concern still exists, says Ahmed Ikram, Director of Environmental NGO Bluepeace.

“Local divers and other groups are concerned that these places will become so protected and so exclusive that locals will be unable to access them,” he said. “We have started to hear concerns that these sites will be cordoned off to the public, with access controlled by resorts and limited access for independent dive companies and safaris.”

Local people needed to be trained as rangers, guides and attendants, and NGOs, island womens’ committees and fishermen needed to be involved in decision-making, Ikram said.

“The EPA has handed the management to the Baa Atoll council, but without any capacity building,” he claimed, while resorts sponsored “greenwashing” campaigns to fulfill their corporate social responsibility objectives, protecting their house reefs and excluding local communities.

“The reefs around resorts are some of the most protected in the Maldives. Why are the house reefs of local islands not being protected too?” Ikram asked.

In some cases tourism authorities had failed to take into account traditional bait fishing grounds when leasing islands for resort development.

“If they fall in the vicinity [of the resort] the fishermen will still go there to fish, as they have done so for thousands of years – it would quickly become a national issue if they were stopped,” he said, adding that climate change had also affected many of these areas forcing fishermen to harvest bait elsewhere.

“Already in some areas climate change has meant that fishermen are having to dive 40 metres to get bait,” Ikram said. “We need to remember than man is part of the ecosystem.”

Deputy Environment Minister Mohamed Shareef told Minivan News that the Baa Atoll management scheme would include the creation of revenue mechanism for the community whereby, for example, “one dollar from each dive goes to fund the needs of the local community.”

The management process, he said, was participatory, and for the locals, “absolutely nothing has changed. Local fishing practices and the manner of living is very sustainable, from knowledge generated over many years.”

Baa Atoll is home to 12,000 people distributed across 13 populated islands and six resorts. The atoll is one of the most biodiverse in the Maldives with high concentrations of manta rays, whale sharks and turtles, and a number of species of coral and sea slugs unique to the area.

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Release of inmates will be gradual and supervised, says Zuhair

The impending release of close to 400 convicts announced by President Mohamed Nasheed on Independence Day will be “a gradual and supervised process,” Press Secretary Mohamed Zuhair has said.

Zuhair explained that a coordinated effort involving the Home Ministry, Health Ministry and the Department of Penitentiary and Rehabilitation Services (DPRS) was currently ongoing.

“[The process] will be divided into phases. All 400 convicts won’t be released at once,” he said.

Zuhair added that the release would be the culmination of months of “an integrated effort” by the concerned authorities to categorise and interview inmates.

“The government has not decided to do this all of a sudden,” he said. “The screening process has been going on for months.”

The interviewing and evaluation process was still ongoing, he continued, and inmates were being categorised to determine whether they needed to enter a rehabilitation programme or other training programmes.

Inmates are to be granted jobs in government companies with a minimum Rf2,000 salary (US$130).

In some cases, said Zuhair, there were “legal complications” caused by some convicts serving multiple sentences.

Zuhair stressed that the inmates would have their “sentences suspended” for a period of three years, during which they would immediately be returned to jail if they were found to have committed any kind of offence.

He added that the released convicts would be subject to “monitoring and constant supervision by the government.”

The authorities are currently engaged in securing job placements and finalising the rehabilitation programmes, he said.

On fears of the released convicts contributing to a rise in crime during Ramadan, Zuhair argued that the government had a “proven track record” with its previous programmes.

Out of 119 inmates released in the past, said Zuhair, only two were arrested and returned to jail.

The vast majority of inmates in Maafushi jail and Himmafushi low-security prison were incarcerated for drug-related offences.

Opposition Dhivehi Rayyithunge Party (DRP) Deputy Leader and Spokesperson Ibrahim ‘Mavota’ Shareef meanwhile stressed that “a balance” should be struck between the security of society and the need to rehabilitate offenders.

“We accept that rehabilitating convicts should be the main priority, but it should be done within a strong rehabilitation programme,” he said. “Law and order and the peacefulness of society must be maintained. If not, the whole country could turn into a jail.”

Shareef also cast doubt on the figures provided by the press secretary: “We don’t believe such numbers given by this government as they always mislead and lie to the public. The public doesn’t have confidence in what the government says anymore.”

He added that previous rehabilitation and parole programmes were not particularly successful in reintegrating inmates into society.

However, said Shareef, “we don’t believe that [convicts] should forever stay in jail either. They are also the children of our friends and families. We will not oppose releasing them through a strong and sound rehabilitation programme.”

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Maalhos islanders allege councillors involved in robbery of safe with Rf100,000 in cash

Islanders of Maalhos in Alif Alif Atoll have alleged that the island’s councillors took Rf100,000 (US$6,485) from the office safe last week.

“It could not have happened without the knowledge of the councilors, almost all the islanders believe that one cannot just go past security and reach the safe so easily and steal it,” an islander told Minivan News today on the condition of anonymity.

“The culprits have sawed the steel rods placed behind the window and entered council office.”

He alleged that it was “obvious” that the councilors were behind the robbery.

“That’s how everyone tells it when they speak of the incident,” he said, adding that police were yet to determine who was involved.

“A police team arrived on this island the very next day but they could not figure out who it was and they left, no arrests were made,” he said.

A police media official told Minivan News that the incident was reported to police on Wednesday afternoon last week.

“A police team was sent to the island for investigation, so far no one has been arrested in connection with the case,” he confirmed.

Maalhos Councillors Ahmed Rashid however dismissed the islanders’ speculation.

“I can’t believe that any councillors would have done it,” he said, adding that three out of the five councillors were not in the island at the time of the robbery.

However, he added, there “might be fingerprints” of the councillors on both the safe and the cash in it as they had “counted the money the night before and gave it to an administrative staff.”

Rashid noted that “a number of visitors” were also in the island on the night of the robbery.

He explained that the Rf100,000 in cash was raised from the sale of coconuts and rent collected from plots leased out in the island.

The money was to be used to manage the island’s powerhouse, he said.

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