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Cabinet voids US$511 million GMR contract, gives airport developer seven day ultimatum to leave

Additional reporting by Neil Merrett and Mohamed Naahii.

The Maldivian cabinet has declared the agreement with Indian infrastructure giant GMR to develop Ibrahim Nasir International Airport (INIA) void, and has given the company a seven day ultimatum to leave the country.

“The government has given a seven day notice to GMR to leave the airport. The agreement states that GMR should be given a 30 day notice but the government believes that since the contract is void, it need not be followed,” said Attorney General (AG) Azima Shukoor.

During a press conference on Tuesday evening, Shukoor stated that the government reached the decision after considering “technical, financial and economic” issues surrounding the agreement.

The attorney general claimed the government had obtained legal advice from “lawyers in both the UK and Singapore as well as prominent local lawyers – all who are in favour of the government’s legal grounds to terminate the contract.”

“We also got advice from both local and international lawyers in the Maldives Airports Company Limited (MACL),” she added.

Shukoor said the government had two legal grounds to terminate the contract: one in which the government believed the contract was ‘void ab initio’ – meaning to be treated as invalid from the outset; and the second being ‘frustration’, an English contract law doctrine which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party’s principal purpose for entering into the contract.

“The contract is governed by the English contract law. The government believes that the agreement is void ab initio meaning the contract was void from the beginning or the contract is frustrated,” she said.

She added the termination of the agreement was a “purely legal decision” and did not have any connection with the recent series of anti-GMR protests headed by the religious Adhaalath Party (AP).

The decision was, Shukoor insisted, made “professionally” and after “thorough research”.

Shukoor also claimed the government was going to initiate the arbitration process in Singaporean Courts and had already informed its decision to both GMR and MACL.

Asked how the government planned fund the estimated US$700 million in compensation for terminating the contract, Shukoor declined to speak of the sum of money but expressed “full confidence” in winning a court battle.

“We were advised by very professional lawyers including Queen’s Counsels (QC). We have full confidence in winning the case,” she said.

“We do not intend to share all our legal arguments in this press conference. Please do respect that decision,” she added.

“Completely irrational”: GMR

GMR has slammed cabinet’s decision as “unilateral and completely irrational”.

“This unlawful and premature notice on the pretext that the concession agreement is ‘void’ is completely devoid of any locus standi and is therefore being challenged by the company before the competent forums. The company disputes that the concession agreement is ‘void’,” GMR said in a statement.

“The company would further like to state that it has taken all measures to continue operations at the Ibrahim Nasir International Airport thereby ensuring that this vital gateway to Maldives is kept open.

“We would also like to inform all that this action by the government of the Maldives is in complete disregard of and has been done during the pendency of arbitration proceedings in the designated tribunal in Singapore. We are therefore taking all measures to ensure the safety of our employees and safeguard our assets. We are confident that the stand of the company will be vindicated in every way.”

Speaking to Minivan News, GMR Executive Vice President & Group Head of Corporate Communications, Arun Bhaghat, said the only reason for the decision as stated in the government’s letter was that the airport development charge had been ruled unleviable by the Civil Court, and therefore the entire contract was void.

In late 2011 the then-opposition Dhivehi Qaumee Party (DQP) filed a successful Civil Court case blocking GMR from charging an Airport Development Charge (ADC) – a US$25 charge for outgoing passengers stipulated in the concession agreement – on the grounds that it was a tax not authorised by parliament.

Nasheed’s administration chose to honour the original contract, and instructed GMR to deduct the ADC revenues from the concession fees due the government, while it sought to appeal the Civil Court ruling.

However, the Nasheed government fell a month later and the opposition inherited the result of its court victory, receiving a succession of bills from the airport developer throughout 2012, despite the government’s insistence that the January 5 letter from MACL outlining the arrangement was no longer valid.

In the first quarter of 2012 the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

“The net result of this is that the Maldivian government now has to pay GMR for running the airport. On this basis it is likely that the Maldivian government will end up paying about MVR 8 billion (US$519 million) to GMR for the duration of the contract,” wrote Dr Hassan Saeed, DQP Leader and President Mohamed Waheed’s Special Advisor, in a recent appeal to Indian Prime Minister Manmohan Singh calling on him to cancel the Maldives’ agreement with GMR and warning the Indian PM of “rising extremism” as a result of the GMR deal and anti-Indian sentiment.

GMR attempted to compromise by offering to exempt Maldivian nationals from the ADC, with GMR Chairman G M Rao personally mailing Waheed with the offer, but claimed to have received no response from the government.

“This is by far the single largest foreign investment in the Maldives at US$511 million – in today’s figures, 40-50 percent of the Maldives’ GDP,” observed Bhaghat, adding that the company was supremely confident of defending its legal position.

“We have no plans to go. We have 23 more years here,” he said, vowing that the cabinet’s decision would have “no effect” on the operation of the airport.

“The defence force in this wonderful country is well geared to ensure smooth operation of the airport,” Bhaghat told Minivan News.

India backs GMR: “All necessary measures”

The government of India “proposes to monitor the situation in Maldives closely and is prepared to take all necessary measures to ensure the safety and security of its interests and its nationals in the Maldives,” India’s Ministry of External Affairs has meanwhile said in a statement.

“We have noted the decision by the Government of Maldives to terminate the agreement with the GMR Group to manage the Male International Airport. It would be recalled that the consortium consisting of GMR and MAHB (Malaysian Airport Authority) had been awarded the contract to manage the Male’ International Airport concession through a global tender conducted by the International Finance Corporation (IFC), Washington, a member of the World Bank.

“As the Advisor to the Government of Maldives, the IFC has stated that it has complied with Maldivian laws and regulations and followed international best practices at each step of the bidding process to ensure the highest degree of competitiveness, transparency and credibility of the process,” the statement read.

“The investment by GMR represents the single largest foreign direct investment in the history of Maldives. The decision to terminate the contract with GMR without due consultation with the company or efforts at arbitration provided for under the agreement sends a very negative signal to foreign investors and the international community. The Government of India would continue to remain engaged with the Government of Maldives on this issue, and would expect that the Government of Maldives would fulfil all legal processes and requirements in accordance with the relevant contracts and agreement it has concluded with GMR in this regard.”

“Destabilising the country”: MDP

The Maldivian Democratic Party (MDP) has meanwhile accused cabinet of destabilising the country by attacking foreign investment and supporting “extremist” rhetoric.

“This decision is bad for tourism, bad for the economy and bad for the Maldivian people,” said former President Mohamed Nasheed.

“Waheed’s government has cynically used xenophobia, nationalism and religious extremism to attack GMR, the country’s largest foreign investor. This will put off potential investors for decades. Waheed is leading the Maldives down the path to economic ruin,” he stated.

MDP MP and Spokesperson Hamid Abdul Ghafoor told Minivan News that disputed contracts could be unravelled through a legal process, but said the executive’s decision to void the contract and evict the country’s single largest foreign investor was not backed by any law.

“If cabinet has now decided to revoke the contract, who is going to execute the order? The contract is bound under international law. The case is still being heard by a court of arbitration in Singapore,” Ghafoor said.

“Will police be executing this order to reclaim the airport, or will it be Islamist elements? This is an executive decision that is being taken without any legal or political backing.”

Maldives National Defence Force (MNDF) Spokesperson Colonel Abdul Raheem said the military was “not involved” in the airport issue: “We will however, continue to take care of security [at the site] and look after it,” he said.

Police Spokesperson Sub-Inspector Hassan Haneef told Minivan News that any decision to enforce the decision would have to be directed by the President’s Office.

Decision prompted by “extremists”

Ghafoor claimed that threats of direct attacks on foreign investors reflected what he was the growing role of extremist Islamic thinking within the most senior decision making of the present government.

Raising concerns over the legality of voiding the GMR contract, Ghafoor pointed to recent comments in local media by the government-aligned religious Adaalath party, whose president Sheikh Imran Abdulla was yesterday quoted as threatening to “invade the runway” should the government not renege on the airport agreement.

“The deal was done very transparently, and [the government] have never been able to prove any wrongdoing,” Ghafoor claimed. “Yet, what is most worrying is that we have the cabinet of what we believe is an illegitimate government that is being influenced by extremist influences.”

Ghafoor alleged that the government’s decision over the GMR issue was being driven by former President Maumoon Abdul Gayoom’s Progressive Party of Maldives (PPM), Adhalaath Party President Sheikh Imran and fellow party member and Minister of Islamic Affairs, Sheikh Mohamed Shaheem Ali Saeed.

“We are now seeing the government partnering with and backing the rhetoric of a movement led by an Islamist group, it is very apparent what is going on here,” he said.

MP Ghafoor further claimed that parliament had, as of this evening, received no information on the decision to renege on the GMR agreement, adding that several no-confidence motions against senior government figures including President Waheed were scheduled.

“What is going on right now is a shift in parliament,” he said.

Ghafoor also claimed that beyond the potential legal and economic ramifications of reneging on the sovereign agreement with GMR, rumours of a Chinese intermediary stepping in to cover possible financial consequences could significantly affect the Maldives internationally.

“In terms of geopolitics, we are hearing about a Chinese connection to the [airport issue] that does not put the country in a comfortable position,” Ghafoor claimed. “Ideologically and culturally we have much closer ties to India than China.”

Returning from a visit to China back in September, President Dr Mohamed Waheed Hassan told reporters that Chinese aid to the Maldives would not be limited to a US$500million (MVR7.7billion) loan finalised earlier this year.

Waheed revealed at the time that the Chinese government had pledged to make all necessary aid available to the Maldives, including assistance with road and shipping development, local media reported at the time.

Regarding China’s view on Maldivian politics, Waheed noted that the Chinese were amongst the first nations to recognise his unity government.

“The Chinese Prime Minister personally told me that he had full confidence and support for the Maldivian government,” Waheed was reported as saying.

However, the Maldives government this evening dismissed suggestions that China would be taking a role in any future airport development.

“On this matter, China is as far away from the airport development as is physically possible,” said Presidents Office Media Secretary Masood Imad.

Troubled airport agreement

The agreement with the GMR-Malaysia Airports Holdings Berhad consortium was signed on June 28, 2010 with the Nasheed administration, following a bidding process conducted by the World Bank’s International Finance Corporation (IFC).

The GMR-MAHB consortium narrowly beat Turkish-French consortium TAV Holdings-Aéroports de Paris Management (ADPM), scoring a final Net Present Value (NPV) score of 495.18 to the runner up’s 454.04 at conclusion of the bid.

GMR’s win was based on playing to the government’s highest-scoring factors – fuel share revenue and upfront payment – at the expense of non-fuel related airport revenue.

As part of its successful bid, GMR paid the government US$78 million and 1 percent of non-fuel revenue and 15 percent of fuel revenue for 2011-2014, increased to 10 percent and 27 percent respectively for 2015-2025. The developer at the time anticipated that additional services and duty free development for the country’s well-heeled clientele, as well as the Maldives’ tourism growth potential, would offset the risks of the higher fuel share.

Opposition parties at the time the agreement was signed – and are now in government following February 7’s controversial transfer of power – first opposed GMR’s development of the airport on nationalistic grounds, and then levelled numerous allegations against the company ranging from corruption to concerns that the deal would allow Israeli bombers to refuel en route to bombing Arab countries.

Further protests occurred in December 2011 after GMR ceased renewing lease agreements of several existing airport duty free operators, notably duty-free liquor store Alpha-MVKB.

The High Court upheld at the time that since GMR had given notice on March 1, 2011 and, as per the agreement, the contract had been terminated on March 31. The court concluded that MVK had no right to remain at the airport without approval from GMR, and began packing up the store’s contents on December 4. Following the eviction, MVK CEO Ibrahim Shafeeq accused GMR of breaking into his shop and stealing his stock, and then launched a ‘Go Home GMR’ protest.

As tension with the developer increased, President Waheed’s cabinet attacked the IFC as “irresponsible” and “negligent” in conducting the bidding process.

The IFC denied the accusations, stating that its advice was geared towards achieving the “objective of upgrading the airport and ensuring compliance with applicable international regulations” and providing the Maldives government “with the maximum possible revenue”.

The stand-off escalated in early August 2012 following a stop work order on the new terminal development, after the government alleged certain planning permissions had not been obtained from the Civil Aviation Authority.

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Negotiating a route into the Maldives tougher than for North Korea, record setting traveller claims

The first person to visit all 201 countries without using a plane has said he found gaining access to the Maldives far tougher than attempts to enter North Korea and Afghanistan.

Graham Hughes a 33-year-old from Liverpool, England, made it to the South Sudan capital of Juba yesterday (November 26), where he completed his journey.

Despite facing many questions on how he gained access to countries like North Korea, Iraq and Afghanistan, Hughes revealed that negotiating a route into the Maldives was far tougher, the Daily Mail reported.

Hughes used buses, taxis and trains to travel 160,000 miles across the world in 1,426 days, a voyage he claimed was budgeted at just US$100 a week.

He spent four days “crossing open ocean in a leaky boat” to reach Cape Verde, was jailed in the Congo accused of spying and was arrest trying to “sneak into” Russia.

Following the completion of his journey, Guinness has now confirmed that Hughes was the first person to have officially visited every nation on the earth without relying on an aircraft.

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Finance Ministry reveals plans to establish offshore banking

Economic authorities are planning to establish an Offshore Financial Centre (OFC) in the Maldives, Finance Minister Abdulla Jihad has revealed in local media.

The plans to establish an OFC in the Maldives were announced while the state budget was presented at the parliament.

According to Jihad, the purpose of introducing OFC facilities in the Maldives would allow for the generation of revenue outside of the tourism industry.

“Offshore financing can be successfully done in small island nations like the Maldives. Large banks around the globe have their interest in Maldives,” Jihad told Haveeru.

Jihad added that he had travelled to Mauritius to speak with officials from banks involved in offshore financing.

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State to decide on President’s ability to grant clemency to death row convicts

The state has been given the opportunity to respond over annulling the President’s ability to grant clemency to convicts on death row.

The High Court hearing gave the state the opportunity to decide over the matter of dismissing the authority given to President Mohamed Waheed Hassan Manik in accordance with the constitution.

The case submitted to the High Court states that the victim’s family has the power to pardon convicts in accordance to Islamic principles, while the death penalty can only be enforced with the unanimous consent of all heirs.

The case questioned why statements are taken from heirs if the President can ultimately decide on granting clemency to murderers, and that this could be considered as a violation of the rights given to the victim’s family.

The case states that article 268 of the constitution obliges all laws and regulations adhere to Islamic principles, while any law contradicting it will be void. It further states that under article 10 of the constitution, any law or regulation that defies the Islamic Shariah is forbidden.

Therefore, the case claims that the power afforded to the President to grant clemency is a violation of article 10 of the constitution. Furthermore, the clemency bill must not be a power afforded to the President under article 268 and that it must be annulled.

The case states that while the Maldives theoretically has a death penalty under Islamic Shariah, the last person to be judicially executed was Hakim Didi in 1953, who was executed by firing squad after being found guilty of conspiracy to murder using black magic.

State Attorney Usama Moosa said research has been conducted by the state and that the process is ongoing. Mossa added that because the case relates to capital punishment, the state had requested legal expertise from various persons.

Chair of the Judges bench Abdul Rauf said that the case is not specific to capital punishment but it relates to clemency.

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JP MP Abdulla Jabir “confident” as secret voting for no-confidence motions passed again by Committee

Jumhoree Party (JP) MP Abdulla Jabir has revealed he is “confident” that the vote on secret balloting for no-confidence motions against the President will pass in parliament.

The Kaashidhoo MP’s comments follow Parliament’s General Committee’s decision to pass the proposed amendments to establish secret voting.

The same amendment was voted on just over a week ago in parliament, but was defeated by a narrow margin of 34 to 39 votes.

The proposed amendment to Article 167 of the Standing Orders states that secret ballots should be taken at the parliament and parliament committees for removing the President, Vice President and members of independent institutions from office.

General Committee Chairman Abdullah Abdul Raheem said that the bill was passed today with four votes in favour, out of the nine MPs present at the meeting. The remaining MPs did not participate in the vote.

The amendment was filed by Maldivian Democratic Party’s (MDP) Maanfannu-dhekunu MP Ibrahim Rasheed, who stated there is an importance to establish an independent and secure environment for members of parliament during voting.

JP MP Jabir further iterated the need for protection of MPs when voting, alleging that President Mohamed Waheed Hassan Manik is “unlawfully” operating the country and that the secret vote will protect MPs from abuse.

“I am confident [the vote] will pass, especially with all the developments that have taken place since the last vote. This brutal executive of the government that Waheed is operating is a military government now, and he is why this vote is being made,” Jabir told Minivan News.

MDP International Spokesman and MP for Henveiru South Hamed Adbul Ghafoor believes that the proposed amendment will obtain the full 39 votes, alleging that “cracks” are appearing in the Dhivehi Rayyithunge Party (DRP).

“The Progressive Party of Maldives (PPM) also voted to make the ballot secret at committee stage, and the parties who were involved in the coup are now becoming unstuck, we will get out 39 votes this time,” Ghafoor claimed.

“Politically motivated attempt to disrupt parliament  ahead of the vote”: MDP

A number of MPs were arrested prior to the previous vote on secret balloting, in what opposition parties alleged was an attempt to disrupt parliament ahead of the vote.

In a police raid on the island of Hondaidhoo in Haa Dhaal Atoll, both Jabir and Ghafoor were detained along with several opposition figures including former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former Press Secretary Mohamed Zuhair and his wife Mariyam Faiz, for the alleged possession of alcohol.

Police claimed to have found large amounts of “suspected” drugs and alcohol upon searching the island.

The arrests were made “based on information received by police intelligence,” police said. Sub-Inspector Hassan Haneef told Haveeru that the suspects were arrested with alcohol and “hash oil”.

Following the arrests made around midnight, the suspects were taken to Kulhudhufushi in Haa Dhaal Atoll, and Zaki was hospitalised.

Despite a police attempt to extend the detention periods, both Jabir and Ghafoor were released by the Kulhudhufushi Magistrate Court.

In an investigation into allegations of police brutality towards MPs, a delegation from the Inter-Parliamentary Union (IPU) revealed that they found it “difficult” to believe the arrested MPs were not targeted for political reasons.

Philippine Senator Francis Pangilinan from IPU’s Committee on Human Rights of Parliamentarians, said: “The circumstances of the arrest are very worrying. An impressive team of unidentified police and an army of officers allegedly carried out the arrests, reportedly without a warrant and ill-treated the MPs.

“We are well aware that the consumption of alcohol and drugs is forbidden in the Maldives, but we find it difficult to believe in light of the circumstances and timing of the arrests that the parliamentarians were not targeted for political reasons.”

Days prior to the secret voting motion, DRP MPs Mohamed Nashiz and Ali Azim were ordered to appear in court over Funaddoo Tuna Products’s failure to repay loans worth MVR 117 million (US$7.5 million) to the Bank of Maldives.

Allegations made by DRP MP Ali Azim claim that the president and other senior members of the executive had approached him, offering to cancel the court summons if he agreed to vote for the secret balloting in a way they preferred.

Azim alleged that in addition to Waheed, his Political Advisor Ahmed Thaufeeq and Spokesperson Abbas Adil Riza had called him and made similar statements.

The court order was later cancelled, on the grounds that the judge presiding over the case was out of the country.

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Indian US$25 million budget support loan delayed after Maldives fails to complete paperwork

A US$25 million state loan from India required to help balance the Maldives’ budget for the remainder of 2012 has been delayed after the government failed to submit the requested paperwork, a diplomatic source has revealed.

A representative for the Indian High Commission in the Maldives – who asked not to be named – told Minivan News that despite recent diplomatic tensions between the two nations, funding had actually stalled due to the Maldives’ government failing for over a month to submit the papers needed to complete the financing deal.

Although the Finance Ministry has now played down previous budget concerns, the US$25 million in funding agreed by India was last month deemed vital by the Finance Minister to ensure the government’s remaining spending in 2012 was met.

While the loan agreement still stands, the diplomatic source stressed that concerns within the Indian government about perceived anti-India sentiments from senior political figures in the Maldives could yet have a bearing on financial support offered to the country.

“Because of the current situation in the Maldives there is a perception in the Indian government that its interests are being treated unfairly,” he said. “[The government] will have the final say on approving any loan and these comments will be taken into account.”

Tensions have increased between the two countries this month as senior Maldivian government officials step up their efforts to oppose a contract signed under the previous administration with Indian infrastructure group GMR to develop Ibrahim Nasir International Airport (INIA).  The contract represents the largest foreign investment ever undertaken in the country’s history.

In an arbitration case held last week, the High Court of Singapore rejected an attempt by the Maldives Airports Company Limited (MACL) to release an injunction blocking the government from taking action in the Civil Court of Maldives blocking GMR’s offset of the airport development charge (ADC).

Yet according to rumours circulating on social media sites, the government will allegedly cancel the GMR contact at a cabinet meeting today on the back of calls from some coalition parties to “renationalise” the airport.

Tweets were being circulated speculating that a Chinese intermediary was prepared to pay for the contract termination and take over the airport development.

Finance Minister Abdulla Jihad said he did not wish to comment on the matter or the loan delay at present ahead of the state budget being unveiled on November 27.

Meanwhile, recently appointed State Finance Minister Abbas Adil Riza – who publicly labelled Indian high Commissioner  D M Mulay “a traitor” earlier this month over the airport development – and Economic Development Minister Ahmed Mohamed were not responding to  Minivan News at time of press.

India has also this week called for the Maldives government to repay US$100 million in treasury bonds by February 2013.

Amidst increased diplomatic tensions, Finance Minister Abdulla Jihad told Minivan News earlier this week that he was unaware of the reason for the delays in receiving the US$25 million loan, requesting the question be put to the Indian High Commission in Male’.

In response, a High Commission of India representative said it had waited for over a month before Maldivian authorities this week returned a draft amendment needed to process the loan. The high commission has said it could now proceed and forward the finance request to the Indian government for final approval.

“We had sent the government the draft amendment, to which they have now have agreed. However is it unlikely they are going to get the funds soon as the decision must be sent to the cabinet for approval,” the source said, adding that the agreement would need to be first sent to India’s Ministry of External Affairs. “The Maldives government will also need to complete certain steps to obtain the funds. For instance, it will have to open a bank account with the State Bank of India for the loan.”

The US$25 million loan was agreed as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

“Deep trouble”

According to the high commission source, the credit facility had been initially agreed after the previous government of Mohamed Nasheed found itself in “deep trouble” and in need of financial assistance by late October last year.

These financial concerns were said to have been exacerbated following the controversial transfer of power on February 7, leading to fears the country may face a sovereign default.

According to the high commission, these initial loan payments were expedited at the time by Indian authorities on an emergency basis  on the grounds that the correct paperwork would be completed at a later date.

However, these emergency conditions were no longer said to be in place.

“This was an extreme situation and we did not want the government to have to default,” the diplomatic source claimed, adding that the Maldives was now required to complete all requested paperwork as had been agreed.

Of the US$100 million credit provided by India, half the amount was agreed to be provided as part of budget support, while the remaining US$50 million would be set aside to aid local business by importing products from India.

However, the diplomatic source said that this agreement had been amended on several occasions to allow for a further US$25 million to go towards supporting the state budget.

Despite previously claiming that the Maldives would be unable to support state spending without securing the additional US$25 million budget support loan from India, Finance Minister Jihad announced this week that the issue of covering the government’s wage bill for the remainder of 2012 was “no longer a major concern”.

Jihad added that his department was working to secure private sector funding to make up any shortfalls in budget support.

However, he did not give further details on the nature of the private sector groups presently being sought.

Jihad claimed that a “significant” part of the private sector focus would be through issuing treasury bills (T-bills) to the private sector as recommended earlier this year by the IMF.

“When we opened up treasury bills to the private sector initially there was no response,” he said. “However, there have now been consultations with private groups.”

T-bills, which are sold by governments all over the world, serve as a short-term debt obligation backed by sovereign states. In the Maldives, T-bills have a maximum maturity of six months, after which time they must be repaid.

Foreign borrowing

Earlier this year, President Waheed reportedly said he would not resort to borrowing from foreign governments in order to finance government activities.

“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn,” he was reported to have told the people of Nilandhoo.

Despite Waheed’s reassurances, October saw a number of state owned institutions face disconnection from the capital’s power grid as bills amounting to around MVR 150 million (US$9.7 million) were owed to the State Electricity Company (STELCO).

Since coming to power in February, the government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to Rf443.7 million (US$28.8 million), to be disbursed in monthly instalments over 12 months from July.

A MVR 100 million (US$6.4 million) fuel subsidy for the fishing industry was also approved by the Majlis Finance Committee, with the hope of stimulating the ailing sector.

The overall deficit for government expenditure has already reached over MVR 2 billion (US$129 million). Jihad has told the Majlis’ Finance Committee that he expected this figure to rise to MVR 6 billion (US$387 million) by year’s end – 28 percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.

Former Minister of Economic Development Mahmood Razee has previously told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”

“If they don’t get the loan, they will have to cut travel expenses, stop certain programs – take drastic measures or get another loan,” said Razee, claiming that the only alternative would be to sell treasury bills.

Following reports in August that the government was attempting to raise funds through the sale of treasury bills, former Finance Minister Ahmed Inaz claimed such a measure would not address IMF concerns about state spending, prolonging economic uncertainty.

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Maldives National Movement to protest against Nexbis

The Maldives National Movement is to begin protesting against Nexbis and the Border Control System (BCS) project, should the GMR contract be annulled.

The National Movement was formed by government coalition parties who oppose the Ibrahim Nasir International Airport (INIA) development being run by GMR.

Speaking at a press conference held at Traders Hotel today (November 26), Steering Committee member of National Movement and Minister of State for Tourism Ahmed Shameem said that the group aims to protest against all illegal agreements made.

“The names of our activities are constantly changing. We had to protest in the name of National Movement because these issues required action to be taken at national level.

“Our first target was to settle the airport issue. After that, we will not hesitate to take action against the Border Control System issue either. We will do that, we will protest against all issues that citizens do not accept,” he said.

Shameem stated that the National Movement is prepared to get the country on the right track, along with the help of Maldivian citizens.

“We have yet to find out if the ‘People’s Majlis’ is in fact a people’s Parliament. We will do that too, if you participate. Some members of Parliament believe that they control the whole country, that they can do whatever they want. So that’s also something we will protest against,” he said.

The Parliamentary Public Accounts Committee has decided to ask the government to cancel the agreement on Border Control System project, a move supported by the Attorney General and Finance Ministry.

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MP Muthalib calls for killing of former President’s Special Envoy Ibrahim Hussain Zaki

Adhaalath-aligned MP Ibrahim Muthalib has called in parliament for former President Mohamed Nasheed’s Special Envoy, Ibrahim Hussain Zaki, to be “hanged to death” as a “traitor to the Maldives”.

Speaking in the parliamentary chamber on November 26, Muthalib called for the arrest of Zaki, claiming that “traitors have to be killed” else they will “destroy the country”.

Muthalib’s comments follow those made by Adhaalath Party Leader Sheik Imran at the ‘GMR go home’ rally earlier this month.

Speaking at the rally, Sheik Imran reportedly stated that Zaki would “leave both worlds” on the day GMR is “chased out of the country”.

The latest threat comes after Zaki warned India that rising fundamentalism in the Maldives threatened the country’s economic interests.

Zaki told reporters that the attack on the GMR contract is “an Islamic fundamentalist issue”, adding: “When Islamic fundamentalism takes over the country, if the Lashkar-e-Taiba can take over the country, then I have no choice [but to call in forces from India].”

Zaki previously claimed that many top figures within the Adhaalath Party were educated in Pakistan and draw their philosophy from the hard line Salafist form of Islam.

Indian media reported on Thursday that: “Zaki, 67, a former minister in successive Maldivian governments headed by former presidents Maumoon Gayoom and [Mohamed] Nasheed, said he would have called for Indian forces to protect the multi-million-dollar investment by Indian infrastructure firm GMR Group.”

India’s Daily News & Analysis reported Zaki as saying that fundamentalists in the Maldives “have links with terror group Lashkar-e-Toiba” and warned that if Islamic fundamentalism goes unchecked the country could turn into a terror state that threatens Indian security.

Muthalib alleged that Zaki’s motivation to defend the GMR deal came from fear of having to spend “a long time in jail” or face “a death sentence” as an investigation would prove that he had accepted “large amounts of money” as bribes from the Indian company.

“Honourable Speaker, these are traitors to the nation. They have to be killed. If they are not killed and left to live, the country will be ruined. They will destroy the country,” Muttalib said, as recorded in parliament’s minutes.

“Therefore, I am calling on the Maldivian government one more time to arrest Ibrahim Hussain Zaki as quickly as possible and, after conducting a trial against him, to hang him to death as a traitor the the Maldives.”

MP Muthalib further alleged that Zaki was “the chief architect” of 1988 failed coup attempt and called on the government to launch an investigation into his alleged involvement.

However, the article in which Zaki was quoted, notes that he is “known in India as the man who telephoned then Indian prime minister Rajiv Gandhi to seek help when Gayoom was threatened by a coup in 1988”.

Muhthalib stated that Zaki was “once again attempting to have Malabars invade the country”. He also called on the government to strip Zaki of the title of honour previously given to him by the state.

Following the remarks, Speaker Abdulla Shahid said calling for a person’s death in the Majlis chamber was “unacceptable.”

Zaki’s remarks “threat to national security”: Defence Ministry

In a statement on Friday (November 23), the Defence Ministry condemned Zaki’s remarks made to Indian media “in the harshest terms” and contended that “such actions are very dangerous [threats] to national security and encourage activities that would harm the country’s independence and sovereignty.”

Zaki responded to the criticism faced by his comments through a statement released yesterday (November 25), claiming that his comments were “misrepresented”.

“The comments I made were directly related to long-standing security cooperation between India and the Maldives, and the common interest of both countries in ensuring peace, stability, law and order in the Maldives, and the emerging international law obligation of Responsibility to Protect. They respond directly to the growing political violence in the Maldives with clear international dimensions,” said Zaki.

He further states that it is “ludicrous” to suggest that India would receive a request that violates the sovereignty of the Maldives.

“My comments in India were completely within the framework of the United Nations resolution 44/51 on Protection and Security of Small States, which the Maldives proposed to the UN in 1989 and of which I am the author. They were fully consistent with the principles set out in UN resolution 2625 and with the regional and the bilateral agreements in force between the two countries.

“To suggest that a call for proactive regional security cooperation was tantamount to treason only reflects the international outlook of those currently governing the Maldives; and I strongly disassociate myself from any such imputation,” added Zaki.

Political groups within the Maldives have been calling for the government to annul the Ibrahim Nasir International Airport (INIA) development contract with Indian infrastructure giant GMR.

The Adhaalath party have played a pivotal role in the anti-GMR campaign, staging multiple protests and an issuing an ultimatum for the government to adhere to.

The first six-day ultimatum to “reclaim” the airport was originally announced by the party earlier this month. However, this was extended to November 30 after no action had been taken by the government by the end of the six-day deadline.

Following the latest ultimatum Sheikh Imran warned of “direct action” should there be no conclusion to the dispute by November 30.

Defence of Mohamed Fahmy

Muthalib rcently caused controversy over his comments relating to the dismissal of President of the Civil Service Commission Mohamed Fahmuy on charges of sexual harassment.

Muthalib spoke against removing Fahmy, excusing his actions as being “encouraged” by Satan.

“If we are to make our women nude and exposed, and then send them out to mingle with men, then why speak of protecting them? Honourable Speaker, this cannot be done in this manner. If a man and a woman are in a room alone, Satan will be there as the third person and will encourage sinful activities,” Muthalib said.

“Their place is in their houses, to serve their husbands and look after children. If we give them the opportunity to go out and mingle then we can no longer talk about their dignity and protection. It is people who harass women who are now speaking in their defense here today,” he further added.

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Case on parliament property damage by MDP MPs to be submitted to police

A case concerning damage caused to parliament property by Maldivian Democratic Party (MDP) MPs on 19 March 2012 is to be submitted to police.

The Parliamentary Behavioural Committee passed a motion to submit the case following a meeting held today (November 26).

Parliament has informed that on the day in question, damage was caused to desks, touch screens, 15 name boards, mic systems, administrative desks and voting cards in the parliament chamber.

Progressive Party of Maldives (PPM) MP Ahmed Mahloof proposed the case, which was then supported by PPM interim deputy President MP Abdul Raheem Abdullah.

Five out of 10 members present at today’s committee meeting voted in favour of submitting the case to the Police.

Committee Chairman and PPM MP Mohamed Mujthaz did not participate in the vote.

MDP committee members proposed that no motions should be passed by the committee until the regulation on behavioural issues of MPs is passed by parliament.

This proposition was voted in favour by four MPs, including independent member for Velidhoo MP Ali Mohamed.

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