Government tasks fisheries company with providing public transport in Addu City

The government has terminated an agreement with MVK Maldives Pvt Ltd to provide bus and ferry services in Addu City, and tasked the state-owned Maldives Industrial Fishing Corporation (MIFCO) with providing the public transport services.

The contract with MVK was signed by the Maldivian Democratic Party (MDP) government in 2009 under its Public-Private Partnership policy.

Minister of economic development Mohamed Saeed told the press today that the government has been “receiving numerous complaints regarding the ferry services” in the southernmost atolls.

“The ferry, which was supposed to be running between Addu City and Fuvahmulah has been stopped for almost a year, while the bus services within Addu City have suffered interruptions,” he said.

“That is why we decided to annul the agreement with MVK and hand over the agreement to MIFCO.”

Saeed said that the MDP government’s transport system was built “very irresponsibly” on a loose foundation, alleging that it was intended to provide unlawful gains to certain parties.

A nationwide transport network was one of five main pledges of former President Mohamed Nasheed.

MIFCO is also providing ferry services in the Gaaf Dhaal and Gaaf Alif atolls in the south after former President Dr Mohamed Waheed’s administration terminated an agreement with Trinus-CAE Holdings Pvt Ltd.

MIFCO’s CEO Adlee Ismail said the company’s immediate focus would be to start providing services to the current standard.

“We have to bring buses and other vehicles from abroad. Our aim to bring air-conditioned and modern vehicles,” said Adlee.

Adlee said 30 percent of the company’s fish stocks are from Addu City, and that the company is planning to open a fish processing plant in the Hulhumeedhoo ward early next year.

Turbulent history

MVK was leased a guesthouse in Gan for 50 years in exchange for providing the ferry services.

However, Addu City Mayor Abdulla ‘Soabe’ Sodiq previously told Minivan News that the guest house “which was functioning well when handed over,” is now mostly vacant and neglected.

The guesthouse transaction was later investigated by the Anti-Corruption Commission in 2010, which found that it was awarded illegally.

MVK was also questioned by the parliament’s government oversight committee in September 2014 regarding its failure to provide the transportation services.

At the time, company officials told the committee that plots of land awarded under the initial agreement had not been handed over.

However, the company agreed to resume transportation services, requesting until December 2014 to start the inter-atoll ferry to Fuvahmulah.

Saeed said today that the government has shown a “good example” by cancelling the contract, declaring that it will not hesitate in terminating agreement if there are shortcomings in providing services to the public.

The current administration has already terminated several of the MDP government’s projects, such as the Tatva waste management agreement.

Former president Dr Mohamed Waheed Hassan in 2012 terminated an airport development agreement with Indian infrastructure GMR.

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Maldivian fishing vessel catches fire

A boat belonging to Maldivian fisheries company Mifco has caught fire while undergoing repairs at a Sri Lankan dockyard.

Adli Ismail, managing director of the Maldives Industrial Fisheries Company (Mifco), said the cause of the fire in the boat’s insulation has not yet been identified, according to Haveeru.

Colombo firefighters were able to bring the fire under control within an hour.

“There was no structural damage to the boat. However, I really think we will need to replace the insulation,” said Adli.

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Division of MIFCO “mistreatment of state resources”, says Auditor General

With additional reporting by Daniel Bosley and Ismail Humaam Hamid

Splitting the Maldives Industrial Fisheries Company Limited (MIFCO) into three competing companies was  a “mistreatment of state resources”, says a report from the auditor general.

MIFCO was divided into three companies in 2010, with the introduction of Kooddoo Fisheries Maldives Limited and Felivaru Fisheries Maldives, before President Abdulla Yameen reversed the decision last year.

“Even after the split the main business of these three companies [MIFCO, Felivaru and Koodoo] was the buying and selling of fish which resulted in competition amongst each other,” the audit report read.

With regards to the financial impact of the move, the report’s figures suggest that the overall profits of the state-owned fisheries business was not significantly affected.

“After the split in 2010, MIFCO’s losses amounted to 4.1 million rufiyaa [US$265,888] in 2011 and 2012 and Felivaru Fisheries Maldives operated at a loss of 19.26 million rufiyaa [US$1.2 million],” the audit report read.

“However, Koodoo Fisheries had a profit of 88.8 million rufiyaa [US$5.7 million] in this period,” it continued.

Founded by the  state in 1993 for the purposes of buying and selling fish, MIFCO had made a net accumulated loss of MVR317.4 before the split, while all three companies were seen to have a total profit of MVR65.4 million in 2011 and 2012.

The audit report said that numerous faults had occurred in the splitting of MIFCO, citing several mistakes made by the Ministry of Finance and Treasury.

“While not providing an alternative to conduct business [Finance Ministry demanded] MIFCO pay the entire overdraft, which amounts to 70.56 million rufiyaa. The National Planning Council had planned how to divide MIFCO’s fleets amongst the three companies, but the finance ministry did not follow,” the report stated.

The dividing of physical assets between the three companies was not carried out properly, resulting in financial losses and even the breaking down of some equipment, read the report.

Auditor General Hassan Ziyaath recommended that the transfer of physical assets between companies be done according to “accounting principles”, and that a more thorough analysis of the impact on stakeholders be made before any similar decisions in the future

Ziyath concluded by saying that the restructuring of a company’s physical assets should be accompanied by a report demonstrating the potential impact on state income.

Fish exports make up the 98 percent of the Maldives’ exports, of which MIFCO is the leading exporter.

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MIFCO denies reducing staff allowances, ACC investigates fraudulent US$1 million transaction

The chairman of Maldives Industrial Fisheries Corporation (MIFCO) has denied rumours the company is to reduce staff allowances, while the Anti-Corruption Commission (ACC) has launched an investigation after US$1 million receivable to MIFCO was transferred to an incorrect bank account.

Speaking to Haveeru, MIFCO board Chairman Hassan Rasheed said the recent merging of the two state-owned fisheries companies with MIFCO had brought the need to “synchronise” the allowances as the employees were being paid differently at the two companies.

Kooddoo Fisheries and Felivaru Fisheries were brought under the management of MIFCO in September this year after having been separated into independent entities during former President Mohamed Nasheed’s administration.

“The staff allowances were not the same in the three companies,” said Rasheed. “While attendance allowance is provided not for staff in one company, the other provides attendance allowance, thus bringing about the need to synchronise the allowances.”

Meanwhile, the ACC and the Maldives Police Service have launched an investigation into a missing US$1 million after a company from Thailand transferred the money into an account that did not belong to MIFCO.

ACC president Hassan Luthfee told Minivan News that the commission initiated the investigation last week. Local media reported that the commission had started the investigation after rumours began circulating in the press and social media.

Speaking about the transaction, MIFCO CEO Adhlee Ismail alleged the Thai company was tricked into sending the sum to the wrong account after a group of people impersonating MIFCO contacted them via email.

“What really happened was, the buyer sent the money to a wrong account after a group of hackers impersonated MIFCO by creating an email with an extra letter to the MIFCO email. The buyer did not do the necessary background checks before transferring the money,” local media reported Adhlee as saying.

Adhlee denied MIFCO staff involvement in the fraudulent transaction while alleging that the emails were sent to Thailand from Nigeria.

According to Raajje.mv, MIFCO submitted the case to Maldives Police Service on Thursday and the company has since received US$600,000 of the missing money.



Related to this story

Kooddoo, Felivaru merged with MIFCO

MIFCO yellow fin tuna receives Friends of the Sea eco-label

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MIFCO yellow fin tuna receives Friends of the Sea eco-label

No additional reporting by missing journalist Ahmed Rilwan

The state-owned Maldives Industrial Fisheries Company’s (MIFCO) hand line fleet has received certification from the NGO Friends of the Sea, a leading international certification project for products from sustainable fisheries and aquaculture.

The certification “authorises the tuna processor and exporter to carry the eco-label for yellowfin tuna from its certified vessels operating in the Western Indian Ocean,” Undercurrent News reported on Friday (October 3).

“Friend of the Sea audit requirements are very strict so we are proud to have obtained the certification,” MIFCO CEO Adhly Ismail was quoted as saying.

“We will continue to rely on Friend of the Sea to increase the number of certified vessels.”

Last week, sustainable fisheries consultants MacAlister Elliott & Partners trained and appointed a Marine Stewardship Council (MSC) auditor in the Maldives.

The auditor, Seema Ali, will specialise in MSC assessment programmes, awarding sustainable fisheries certification to local companies in a move aimed to support employment in the Maldives.

The Maldives’ skipjack tuna fisheries industry received the MSC certification in 2012 for its low-impact pole-and-line technique where each wild fish is caught individually to reduce by-catch.

MSC Chain of Custody (CoC) surveillance audits of the Maldives skipjack tuna industry were conducted recently by Kat Collinson of MacAlister Elliott.

CoC standards for seafood traceability ensures the MSC eco-label is only displayed on seafood from sustainable sources, explained MacAlister Elliott.

The Maldivian fishing industry has declined in recent years, falling behind tourism and construction as the country’s third-largest industry.

While approximately 185,000 tonnes of fish were caught in 2006, the number had dropped to about 70,000 tonnes in 2011.

According to the latest monthly economic review from the Maldives Monetary Authority, fish purchases in August 2014 rose compared to the previous month and stood at 2,457.2 metric tonnes.

“However, a 48% decline was recorded compared to the corresponding period of 2013,” the central bank explained.

“In August 2014, both the volume and earnings from fish export fell compared to the corresponding month of 2013. As such, the volume of fish exports fell by 56%, while the earnings on fish exports declined by 48% during this period. The decline in the volume and earnings of fi sh exports was contributed mainly by the fall in export of frozen skipjack tuna.”

During the past five years, the value of the nation’s fisheries industry declined from MVR489 million (US$31.7 million) to MVR321 million (US$20.8 million) with a corresponding fall of 3.3 percent of the economy to 1.1 percent in 2012.

UK Supermarket chain Sainsbury announced earlier this year that it had introduced the country’s first certified sustainable tuna sandwich using the MSC eco-label.

“By choosing tuna from the Maldives tuna fishery, Sainsbury’s is supporting artisanal fishermen who have made an international difference to the way the Indian Ocean fishery is managed,” the Marine Steward Council’s Senior Country Manager Toby Middleton said in May.

Meanwhile, the Ministry of Islamic Affairs recently started awarding halal certification to local fisheries companies in order to open up Islamic markets for export.

The move followed notification from the European Union that extension of the duty-free status of imported fish from the Maldives would be rejected due to he country’s failure to comply with international conventions concerning freedom of religion.

The Maldives exports 40 percent of its US$100 million fishing industry to the EU, its single largest export partner by value.

Maldives’ Fisheries Minister Ahmed Shafeeu said the government’s application for a year’s extension under the ‘GSP Plus’ programme was declined as it had not ratified all 27 required international conventions.

He warned that the sudden imposing of a 14- 20 percent duty on fish imports would lose the Maldives its competitive advantage over the larger fishing fleets of nearby Sri Lanka and Thailand, and reduce profits to “a marginal value.”

Until January 2014, fish exports were duty-free under the Generalised System of Preferences (GSP) program, a non-reciprocal trade agreement extended to developing countries.

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Kooddoo, Felivaru merged with MIFCO

The government-owned canneries Kooddoo Fisheries Complex and Felivaru Fisheries Complex have been brought back under the management of the Maldives Industrial Fisheries Company (MIFCO), reports local media.

The major business units or factories of MIFCO were separated from the company during the administration of former President Mohamed Nasheed and began operations as independent entities on June 1, 2010.

Privation Board Chairman Mohamed Nazeer told newspaper Haveeru yesterday that the separate entities would be dissolved and some of its board members have been appointed to a reconstituted MIFCO board of directors.

While former Felivaru Managing Director Hassan Rasheed has been appointed chairman of the board, former Kooddoo Managing Director Adhly Ismail has been appointed managing director at MIFCO.

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Singapore Islamic authority approve Maldives halal certificates

Singapore has become the first country to accept the Maldives’ Halal certification, the Ministry of Islamic Affair has revealed.

Local media have reported the ministry’s announcement that the Islamic Religious Council of Singapore has accepted the certification, currently used by three Maldivian fisheries firms.

“After the approval of the certificate by Singapore, the market is looking forward to an even bigger expansion,” Islamic Minister Sheikh Mohamed Shaheem Ali Saeed told Haveeru.

The move to award Halal certification followed the EU’s decision to refuse the extension of duty-free status to Maldivian fish imports late last year due to the Maldives’ failure to adhere to international standards regarding freedom of religion.

The EU represents the single largest export partner for the Maldives.

The government promptly formed a Fisheries Promotion Board in order to target new markets, with Felivaru Fisheries, Maldives Industrial Fisheries Company (MIFCO), Horizon Fisheries all awarded Halal certificates in April.

Deputy Minister at the Ministry of Islamic Affairs Dr Aishath Muneeza told Sun Online that the certification had been approved for three years by the Singapore authority, expressing confidence that the development would open up international markets.

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Local fish exporters reduce price paid for catch

Local fish exporters have this week announced that they will be reducing the price paid to fisherman following a drop in global fish prices.

Horizon Fisheries, Koodoo Fisheries Maldives Ltd (KFML), Felivaru Fisheries and MIFCO have all reduced fish buying prices, telling local media that the price would increase along with global market prices.

Global fish prices are reported by local media to have dropped from US$2500 to US$1850, with Maldivian fishermen now receiving MVR18 per kg of fresh fish with ice, and MVR16 per kg without.

Ibrahim Manik of the Fisherman’s Union has suggested that leading government figures are amongst the country’s largest fish exporters.

“The senior officials of the PPM administration are fish exporters. Gasim’s Jumhooree Party and Yameen’s PPM’s [Progressive Party of Maldives] Zameer are fish exporters. As they make profits fishermen are facing a lot of damages.”

In the wake of the reduced prices, however, the government’s KFML announced it would be reducing ice and fuel charges in order to lessen the effects of the reduced fish prices.

The company reduced the selling price of diesel from MVR 17.25 to MVR 17, and the price of a ton of ice from MVR1050 to MVR 850, Sun Online revealed. The company also announced it would be reducing maintenance fees as well as attempting to penetrate new markets.

The newly appointed Minister of Fisheries Dr Mohamed Shainee told local television last week that he hoped the ruling Progressive Party of Maldives manifesto pledge to ensure all fishermen receive a basic income of MVR10,000 could be introduced next year.

“There is a lot of support for the policy from fishermen. This will incentivize the fishermen. They catch more than MVR 10,000 on good fishing days. But if the weather is bad or if the catch is low, there is a degree of despair. We are providing an incentive to overcome this despair to get ready for the next fishing season,” Shainee told Sun TV.

He revealed that the government would finance the scheme through the collection of MVR500 from each fisherman during the good months of fishing each year. It was also noted that the government planned to allocate MVR45 million from the MVR100 million allocated to subsidies fuel charges for fishing boats and hopes to designate a budget of MVR 90 million for the scheme.

While tourism is the Maldives’ largest economic sector, indirectly responsible for up to 70 percent of GDP and up to 90 percent of foreign exchange, fisheries is the country’s largest employer at over 40 percent.

The total fish catch has been declining each year since 2006 reaching 83.1 thousand metric tonnes in 2011, leading to fears about the impact of climate change and overfishing by better equipped fishing fleets on the borders of the Maldives’ Exclusive Economic Zone (EEZ).

The European Union earlier this month declined to extend the duty-free status of imported fish from the Maldives, following the country’s failure to comply with international conventions concerning freedom of religion.

The Maldives exports 40 percent of its US$100 million fishing industry to the EU, its single largest export partner by value.

Before January 2014 those exports are duty-free under the Generalised System of Preferences (GSP) program, a non-reciprocal trade agreement extended to developing countries.

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Government to issue fishing subsidy upon Majilis approval

Fishermen will start receiving the 100 million Rufiyaa (US$6.4 million) fuel subsidy allocated to them in the 2012 state budget as soon as Parliament approves revisions proposed by the Fisheries Ministry, the government has said.

Speaking at a press conference on Wednesday, Minister of Fisheries and Agriculture Ahmed Shafeeu said subsidising fuel for fishing vessels would “incentivise” many fishermen who are currently unable to fish due to high fuel prices.

“A lot of fishermen now use larger fishing boats which require more fuel. So they opt not to make trips if they can’t get a good catch after burning so much fuel. The fuel subsidy will encourage more people to go fishing,” said the minister.

Shafeeu said fishing in the Maldives has declined by more than half from approximately 185,000 tonnes of fish caught in 2006 to about 70,000 in 2011.

“It is very important to assist the fishermen as it affects the livelihood of many people. Also, this needs to be done in order to sustain the industry and increase fish exports as there is a risk of losing some markets,” he explained.

This year’s subsidies, unlike previously, will be given based on the horsepower (hp) of the fishing vessel instead of the size of the vessel. Registrations are open until June 7 for fishing boats to apply for subsidies, according to the ministry.

The former administration withheld releasing the subsidy citing insufficient funds in the state budget for the fishing subsidy. Former Minister of Finance Ahmed Inaz told the Parliament in October 2011 that the state would have to reduce other subsidies to issue Rf100 million as oil subsidies for fishermen.

Governor of the country’s central bank Fazeel Najeeb last month said the Maldives was facing its worst economic crisis in recent history. Parliament’s Finance Committee revealed in May that expected revenue for 2012 had plunged 23 percent – a shortfall of US$168.6 million, leaving the country with a budget deficit of 27 percent.

Fisheries Minister Shafeeu said although the state is in debt, the 100 million must be released to fishermen since  Parliament had allocated the money for fishing subsidies in the state budget.

Former CEO of the Maldives Industry of Fisheries Corporation (MIFCO) Adil Saleem, who also held the position of Transport Minister in the former government, said encouraging a subsidised industry “completely reverses” of the former government’s policies, although he said it was important for fishermen “in the current situation.”

“Subsidising is wrong,” Saleem said, arguing that it did not address the core problems in the industry and is “not the solution for a sustainable industry.”

“Coup financiers are shaping the industry so that the fishermen act as their staff, going fishing everyday on subsidised fuel,” said Saleem.

However, he noted the fishermen are currently in “desperate need” of assistance due to the low prices they get for the fish, and said the subsidies should be released to them as a short-term measure.

“An election is what we really need,” Saleem said.

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