INIA capacity will increase threefold with new runway and terminal, says economic council

Additional reporting by Hassan Mohamed

The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.

At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.

“The previous development concept was only for the development of the terminal,” says Saeed.

“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”

After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.

“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.

Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.

The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.

The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.

Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.

In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.

The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.

The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.

Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.

Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.

Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.

GMR Compensation

In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.

A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).

The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.

However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.

The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.

Chinese arrivals

Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.

However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.

“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.


Related to this story

Government seeks US$600 million from China and Japan for airport development

Tourist arrivals decline in January as Chinese arrivals slow down

GMR wins arbitration case, tribunal deems airport deal was “valid and binding”

Police arrest former President Mohamed Nasheed ahead of terrorism trial

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New deputy minister appointed to the Home Ministry and the Economic Ministry

President Abdulla Yameen has appointed deputy ministers to the Ministry of Home Affairs and the Ministry of Economic Development.

According to a tweet from the President’s Office Spokesman Ibrahim Muaz, Ahmed Saleem was appointed to the post of deputy home minister and Abdulla Mohamed to the post of deputy economic minister.

Mohamed, who previously served as a state minister at the home ministry and the registrar of NGOs, was also vice president of the Civil Alliance Coalition of NGOs – Madhanee Iththihad – a group at the forefront of protests that led to the ousting of former President Mohamed Nasheed in 2012.

Saleem, who joined the Jumhooree Party during the 2013 presidential elections after previously serving as a council member of the Progressive Party of Maldives, has left the JP after the party signed an agreement with Maldivian Democratic Party to defend the Constitution last week.

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Economic Ministry stops issuing work permits to foreign photographers

The Ministry of Economic Development has decided to stop giving out work permits to foreign photographers starting from yesterday (January 26).

“We want to provide the opportunity to Maldivian youth and to ensure that photography stands up on its own as an established industry,” Minister of Economic Development Mohamed Saeed has told Haveeru.

“This will encourage small and medium sized businesses to develop,” he explained, adding that only Maldivians will be allowed to provide photography services in resorts.

The current government has pledged to create more jobs for local youth by replacing expatriate workers with Maldivians.

Maldives Photographer’s Association (MPA) President Mohamed Shafy told Minivan News that the government’s decision is a “huge accomplishment” for the organisation, which has been working relentlessly to provide more opportunity for local photographers.

Shafy said that foreign nationals were taking up opportunities which would otherwise be given to local photographers – especially at resorts – by demanding a smaller price than their local counterparts.

He explained that the association had discovered, via the recently passed Right to Information Act, that 14 foreign nationals were working in the photography industry in the Malé area, despite just 3 having been licensed throughout the country.

“We do not mind the photographers who come for a certain project or with famous celebrities,” said Shafy. “However, some of these resorts have foreign resident photographers for weddings and occasions while it could be Maldivians doing the job.”

Shafy said that the association has held talks with various government officials regarding the matter.

“We have had talks with tourism minister Adeeb, [former] defense minister Nazim and we were told they will try to change things around. So we did not think that the minister Saeed would take such a drastic measure.”

Another local photographer described the move as a “very good decision” which would provide a lot of opportunities to work at resorts.

While there are 1500 professional photographers registered with MPA, Shafy estimates that there are over 3000 photographers working professionally in the country.

“It used to be that tourists would come to the Maldives just for the underwater scenery and pictures. But now we see more honeymooners who want their pictures taken,” said Shafy, describing the potential of the industry.

He expressed his belief that the decision would prompt a lot of photographers who had given up on the profession to return to the industry.

The theme of ‘Maldivian work for Maldivians’ forms a major part of the government’s current policy for strengthening the economy and reducing youth unemployment.

Youth minister Mohamed Maleeh Jamal has told Minivan News recently that there are over 13,000 individuals in the youth unemployment registrar. Shortly after the current government took office in late 2013, the youth ministry said it would attempt to resolve unemployment by replacing expatriate workers with locals.

After pledging to create 94,000 jobs during its five year term, the government recently announced that it would be illegal to hire expatriate workers as cashiers starting from April this year.

Speaking at the time, Saeed said: “A large percentage of the Maldivian youth is unemployed and looking for unemployment. All they need is support and guidance.”

In December last year, former Managing Director at Maldives Airports Company Ltd Bandhu Ibrahim Saleem told a Majlis committee that difficulties with local staff had resulted in a dependence on foreign employees, and even military assistance, to keep the international airport running.

Saleem – who had been called before the Majlis to explain the high number of foreign workers at Malé international airport – was removed from his post for unspecified reasons last week.



Related to this story

Foreigners barred from cashier jobs as President promises work for Maldivians

MACL chief says airport dependent on foreign workers

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Yameen bring changes to state institutions following Nazim dismissal

President Abdulla Yameen has brought changes to a number of ministries and state institutions in the aftermath of Colonel (ret.) Mohamed Nazim’s dismissal as defence minister.

Minister of Fisheries and Agriculture Dr Mohamed Shainee was today appointed to the vacated acting health minister’s position, while Minister of Home Affairs Umar Naseer has been appointed president of the Local Government Association (LGA).

Additionally, the Department of Immigration and Emigration – under Nazim’s remit as part of the defence ministry since December 2012 – has been reallocated to the Ministry of Economic Development.

Meanwhile, the President’s Office has revealed that Ibrahim ‘Bandhu’ Saleem has been removed from the post of Maldives Airports Company Limited’s managing director. Saleem confirmed this to Minivan News stating that no reason had been given for his dismissal.

President’s Office Spokesman Ibrahim Muaz explained that the president has the power and authority to appoint and dismiss political appointees and that specific reasons for a decision would be shared with the media when they were available.

Yesterday’s dismissal of Nazim came as a result of a police investigation into illegal weapons being kept in the minister’s home. He had been in the position since February 2012 – one of the first appointments made by President Dr Mohamed Waheed following the controversial resignation of President Mohamed Nasheed.

Nazim had been given the health portfolio after pro-government MPs blocked the renomination of Dr Mariyam Shakeela to the cabinet in August last year. Shakeela later alleged a conspiracy and smear campaign to remove her from office.

At the time of his dismissal, Nazim was also facing challenges from within the Local Government Authority, to which President Yameen had appointed him in November 2013. Last week fellow board members voted to remove him from the position of president following a contested vote of no-confidence.

Meanwhile, Haveeru has published corruption allegations against Nazim’s brother, State Trading Organisation Managing Director Adam Azim.

The paper reported that it has obtained a copy of an Anti-Corruption Commission report which says Azim attempted to use the state-owned company’s money to influence the Football Association of Maldives’ congress.

Haveeru suggested the report revealed attempts to have a relative appointed to the post of FAM president through sponsorship money given to football clubs with voting rights in the congress.

Elsewhere, the Judicial Services Commission today elected Supreme Court Justice Ali Hameed as its chair.

Hameed was appointed to the judicial watchdog by President Abdulla Yameen yesterday after the commissions Supreme Court representative Adam Mohamed resigned from the commission on Sunday (January 18) citing personal reasons.



Related to this story

Nazim dismissed as defence minister, replaced by Moosa Ali Jaleel

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Ministry of Economic Development to handle all Malé City Council’s business transactions

The Ministry of Economic Development will be handling all business related transactions previously rendered by Malé City Council (MCC) starting from December 14.

The change comes in accordance to the Businesses Registration Act, ratified in May 13 by President Abdulla Yameen.

A total of 11 transactions would be handed over to the economic ministry including the distribution of permits for the sales of imported goods, permits to establish cafés and restaurants, and the registration of business names.

The transfer is the latest in a series of moves in recent months that have reduced the MCC’s powers.

Other moves have included the transfer of numerous plots of public land to the central government, the removal of Malé City roads from council jurisdiction, and the recent police confiscation of MCC documents and server files from council premises.

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US and Maldives hold first bilateral trade talks

The first official trade talks between the Maldives and US governments took place this morning at the Ministry of Foreign Affairs in Malé.

The meeting was the first bilateral discussion since the signing of the Trade and Investment Framework Agreement (TIFA) in 2009 to provide a forum in which bilateral talks can proceed.

“The first meeting discussed procedures for more robust engagement, as well as touched on topics such as labor, intellectual property, and the investment climate,” said the US following this morning’s meeting.

Minister of Economic Development Mohamed Saeed told the US delegation at today’s meetings of the government’s plans to diversify the economy away from its reliance on tourism, as well as the recent changes to the investment climate with the Special Economic Zones Act.

He also noted that further changes to legislation were planned that would ease foreign investment. The US State Department has previously noted that “the ambiguity of codified law acts as a damper to new investment” in the Maldives.

Despite the council not having met before today, total trade between the two countries has more than doubled between 2009 and 2013. Saeed told press today that the Maldives’ major export to the US was fish products, expressing his hope that Maldivian fishermen could take advantage of marketing opportunities within the US.

Speaking at a press conference after today’s meeting, Saeed said the government had plans to more than triple the current amount of fish exports to the US by 2018.

Part of the initial agreement, signed five years ago, stated that both parties would endeavour to hold talks at least once a year. The United States-Maldives Council on Trade and Investment – established by the TIFA – is designed to monitor trade flows, investigate new opportunities, and remove impediments to further investment.

Economic development minister Saeed represented the Maldives alongside State Minister for Economic Development Faris Maumoon, while the US delegation was led by Assistant Trade Representative for South Asia Michael Delaney along with Deputy Chief of Mission at the US Embassy in Colombo Andrew Mann.

“Our team comes from multiple U.S. government agencies and has been looking forward to returning to the Maldives to learn more about both the trade and investment conditions and the labor environment,” said Delaney in a press release from the Colombo embassy.

The press release noted that the US has TIFA agreements with almost 50 countries in every region of the world.

(SOURCE: U.S. Census Bureau, Foreign Trade)

Not traditionally a key contributor to the Maldives’ billion dollar tourism industry, US visitors represented less than 2 percent of the market share in 2013.

US engagement with the Maldives has traditionally concerned foreign assistance to enhance maritime security, counter terrorism, and counter narcotics cooperation with Maldivian forces.

Officers and crew from the USS Rodney M Davis visited the Maldives earlier this month, with Vice Admiral Robert Thomas noting the critical nature of the Indian Ocean to regional security.

Rumours of a Status of Forces Agreement – opening up the possibility of US forces being stationed in the Maldives – surfaced in 2013, before incoming President Abdulla Yameen announced that any such deal would be likely to damage relations with neighbouring countries.

The US has also pledged to help the Maldives adapt to the negative effects of global climate change, pledging US$7.2 million (MVR111 million) for a global climate change adaptation project last year.

2013 also saw US private equity firm Blackstone acquire both the Maldives’ major seaplane operators for an undisclosed sum, as well as the introduction of the US designed PISCES border control system.

The PISCES system was utilised in the controversial arrest of alleged Russian hacker Roman Seleznyov by US security personnel while in the Maldives in July. Seleznyov was subsequently transported to the US via Guam where he awaits trial.

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Joint venture company registered to develop Fushidhiggaru

A joint venture company (JVC) formed between the government and Prime Capital Maldives Pvt Ltd to develop a special tourist zone in the Kaafu Fushidhiggaru lagoon has been registered by the economic development ministry in accordance with a Civil Court judgment, reports newspaper Haveeru.

Registrar of Companies Mariyam Visam told the local daily today that the ministry registered the JVC within the seven-day period stipulated by the Civil Court verdict, which also ordered the government to sign a master lease agreement within five days of registration, “and [to] make all arrangements undertaken by the government in accordance with the agreement”.

In September 2013, Prime Capital sued the government after the ministry refused to register the JSC citing lack of authorisation from then-President Dr Mohamed Waheed as required by law.

The agreement was signed between Prime Capital and the Maldivian government on January 18, 2013 to lease the Fushidhiggaru lagoon for a 50-year period to a JVC with a 25 percent stake for the government.

According to local media, the government was to receive 30 percent of the profits from the tourism venture in the lagoon south of the capital Malé.

Prime Capital is reported to be a Singaporean company.

Following media reports last year suggesting that the JVC agreement was signed secretively, both Finance Minister Abdulla Jihad and Tourism Minister Ahmed Adeeb initially denied the existence of an agreement to lease the lagoon.

Less than two weeks before the first round of last year’s presidential election on September 7, Jumhooree Coalition campaigner Umar Naseer – now home minister – leaked documents to the media purported to be an agreement to sell the lagoon.

Naseer alleged at the time that the economic development ministry stopped the project as the cabinet had not officially approved it.

Moreover, the agreement was signed without seeking legal advice from the attorney general, he claimed.

Adeeb denied the existence of an “official” lease agreement and dismissed the allegations as a “political assassination” attempt in the days preceding the presidential election.

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‘Halal certificates’ awarded to three companies

Under an initiative of the Ministry of Islamic Affairs to categorise food products produced in the Maldives as ‘halal’, three companies have on Sunday been awarded the first ‘Halal certificates’.

After research into the manufacturing process, the Islamic Ministry today awarded five products of Felivaru Fisheries, 12 products of Maldives Industrial Fisheries Company (MIFCO), and three products of Horizon Fisheries with the certificate.

The certificates were awarded by Minister of Economic Development Mohamed Saeed at a ceremony held  in the Islamic Ministry on Sunday.

The new policy represents the government’s attempts to find alternative fish export markets, including the middle-eastern and the Malaysian market, after withdrawing its application for European Union (EU) duty-free status of imported fish from the country.

Last November, the EU declined to extend the duty-free status on Maldivian fish exports under its Generalized System of Preferences (GSP) program – a non-reciprocal trade agreement extended to developing countries – as the government had not ratified all 27 required international conventions.

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Malé City Council to bring back 24 hour shops and cafes

Malé City Council has decided to bring back the 24 hour service at cafes and shops, seventeen months after it was banned by Dr Mohamed Waheed’s government.

The proposition was passed unanimously by nine members present at yesterday’s council meeting (March 18), though the government has suggested that it does not have the authority to make such decisions.

Councilman Shamau Shareef said that the council decision came in response to a number of request from Malé City residents.

“This is what the people want. The former government discontinued the permissions to operate such places citing criminal activity and instability in the city. But now we have an elected government, and we think it should be reconsidered now,” said Shamau.

He noted that council have now been tasked with issuing trade permits for the city and it is in the council’s mandate under the Decentralisation Act to address this issue.

But the Ministry of Economic Development has today said that the issuing of trade permits was delegated to the council under a memorandum of understand with the ministry, which does not allow issuing 24 hour license.

“The government decided to end the running of 24 hour businesses. From that point the procedure for issuing trade permits were changed. City council have been tasked with issuing permits under those procedures,” the ministry’s Director General Usman Shakir was quoted as saying in Haveeru.

Shakir said that the government has not yet changed it’s position on allowing 24 hour businesses, and warned that the ministry will take action if any such permission is issued.

Responding to the ministry’s statement Councilman Shamau said that there are “some barriers” in implementing the decision, but the council is willing to overcome these issues by discussing it with the ministry.

“We will do whatever it takes. This is the capital city, and there are 24 hours ferries operating, people coming from other islands, people are working round the clock. There should be some way for them to eat or buy things they need. We are talking about basic necessities of the people,” he said.

President Mohamed Nasheed’s government decided to issue permits for 24 hour businesses in December 2010. After the change in government, Dr Mohamed Waheed’s administration in October 2012 decided to put an end to these opening hours.

The ministry’s official reason for decision was national security concerns. There was a high level of concern about increasing rates at the time, particularly with political instability and the murder of MP Dr Afrasheem Ali within the same month.

While it is not known whether the decision had any positive impact in reducing crime rates, the parliamentary national security committee at the time suggested impact it had was negative.

Opposition Maldivian Democratic Party at the time described the decision as an attack against small and medium businesses which ‘left thousands of people unemployed’. Resuming the permits was an election pledge of the party’s presidential candidate Mohamed Nasheed in 2013.

Ruling Progressive Party of Maldives was at the time a coalition member of the government, and President Abdulla Yameen was elected as president, the party has maintained support for the ban on 24 hours businesses.

When the permits were revoked in 2012 there were forty four businesses with permit in Malé city, now all shops have to be closed at 11pm and all cafes at 1am.

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