MPs express concern over Addu airport bidding process, while AIA MD Shahid denies corruption allegations

Jumhoree Party (JP) Leader, MP, and chairman of the Villa Group of businesses, Gasim Ibrahim, denied in parliament today that he had spoken against the sale of shares of Addu International Airport (AIA) with the intention of buying shares himself. He claimed he had done so “in the best interests of Addu and the country.”

“If Gasim wanted shares, Gasim would have bid for them,” Gasim said in response to some MPs, who had alleged he was himself interested in buying the shares.

Referring to his offer in his letter to President Mohamed Waheed Hassan to reclaim land for the project free of charge “using my own dredger, employees and machinery with the government only providing oil,” Gasim said that the costs of the work would come up to US$7 million.

“I am very concerned that they have gone ahead and sold the shares without even considering the offer of free aid of this size,” Gasim said.

Gasim further stated that although he did want to see the Addu airport developed, the shares had not been sold in the right manner, adding “things won’t go very well” due to how the shares had been given away.

JP MP Alhan Fahmy echoed Gasim’s statement that he, too, wished to see the Addu airport developed, but that he was concerned with how the sale of shares had been carried out. Fahmy said that 30 percent of shares being sold off for MVR 60 million (US$3.89 million) was “nothing but daylight robbery”.

“The shares have been sold far too cheaply. Our problem is that they’ve done this while there are many other ways obtain the funds needed for development,” Fahmy explained.

A number of MPs from the Maldivian Democratic Party (MDP) stated that the party supported the concept of privatisation, adding that the development of the Addu airport was originally an MDP initiated plan. They, too, however, expressed concerns over how the bidding process had been carried out.

MDP Parliamentary Group’s Deputy Leader Ali Waheed criticised Gasim Ibrahim for his “lack of conviction” when speaking about the issue in parliament.

Waheed said that Gasim had not dared to criticise the government even after it had sold the shares, despite Gasim’s allegations that major corruption had been involved in the deal.

Referring to Gasim’s common name “Buruma” (‘drill’), Waheed said, “There is no use for a drill without electricity”, alleging that the JP leader had been “too cowardly” to even speak of the issue openly during today’s parliamentary session.

“Cowards need not contest in the coming presidential elections,” Waheed further declared.

Gan Airport development to start in January: Shahid

MD of AIA and STO Shahid Ali said in a press briefing on Monday that the Addu Airport development work is set to begin in January.

Ali said that the pre-bid meetings had been held with the three shortlisted contractors and that the bids were scheduled to be submitted by November 28.

The development plans include an extension of the runway, repairing of the apron, placing an extra layer of tar on the runway and setting up a sea plane base.

He also stated that contrary to general speculation, the airport had not been “sold”, but rather shares from the company AIA that had been sold to KASA Holdings.

He also refuted allegations of corruption, saying that KASA Holdings had been given higher priority since it was a local company and that all proceedings had gone through the bidding process in a matter which was completely free of any corruption.

“It is often said now that 30 percent of the airport has been sold to a private party. The truth is that 100 percent of the land of Gan, the infrastructure of the airport and its facilities are with the government, because Gan Airport Ltd is a company which is 100 percent owned by the government. So all the assets are owned by them. Then this company has leased the airport to AIA for 50 years,” Ali explained.

Ali said that therefore it was clear that selling 30 percent of the shares of AIA, a joint company formed by the Gan Airport Ltd, STO and the Maldives Airports Company Ltd, was not a sale of the airport itself.

Leave politics aside

Addu City council has released a statement welcoming the signing of the contract which they said would lead to the development of the Addu airport.

The statement further notes “the importance of leaving politics aside and for the good of citizens in letting the venture bring positive changes to Addu’s economy.”

Meanwhile, MDP released a statement on Monday urging “not to let political feuds, political needs and power play interfere in important work directly related to the development of Addu City citizens, and generally all Maldivian citizens.”

The statement also condemned Gasim’s threats against Shahid Ali, stating “This party calls on political leaders to refrain from making unlawful threats through the greed for power and political wants.”

In a uncommon move, 18 citizens from Addu held a press conference on Monday, speaking in support of the Addu airport development.

The citizens welcomed the selling of shares to KASA Holdings, stating that it was not a sale of the airport itself. They further said that the citizens of Addu were happy that although the airport has so far remained the same, development work is scheduled to begin early next year.

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Addu airport stake sold to Champa Afeef’s Kasa Holdings

An agreement was signed last night to sell 30 percent of the Addu International Airport Company Pvt Ltd (AIA) to tourism pioneer ‘Champa’ Hussain Afeef’s Kasa Holdings to raise finances to develop the Gan airport in Addu City.

AIA is a joint venture formed by the Gan Airport Company Ltd (GACL), Maldives Airports Company Ltd (MACL) and the State Trading Organisation (STO).

The airport infrastructure and facilities in the uninhabited Gan island of the southernmost Seenu atoll was leased to the government-controlled consortium for 50 years with a mandate to develop and operate the asset as an international airport.

The agreement to sell a 30 percent stake in AIA for MVR 60 million (US$3.9 million) was meanwhile signed on behalf of the company by Managing Director Shahid Ali – also Managing Director of STO – and ‘Champa’ Mohamed Moosa on behalf of Kasa Holding.

The agreement was signed in spite of a public threat by Jumhoree Party (JP) Leader and MP for Alif Dhaal Maamigili, Gasim Ibrahim, that Shahid Ali would be sacked from his post if the sale went through.

Gasim, who had previously alleged corruption in the deal, told reporters on Sunday night that Shahid could not “stay in his post if he signs it,” according to newspaper Haveeru.

He also warned that the STO MD could “not live on this island” if the sale was finalised.

Shahid meanwhile reportedly said after the signing ceremony last night that the agreement was signed after the Finance Ministry and Public Enterprises  Monitoring and Evaluation Board (PEMEB) gave clearance for the sale.

Shahid noted that Afeef’s stake in the seaplane operator Trans-Maldivian Airways (TMA) would be an advantage in the development of the Gan airport.

Following the signing ceremony, Shahid told private broadcaster Raajje TV that the sale was made after a decision by the AIA board of directors, a public tender, evaluation of shortlisted candidates and “authorisation from the Finance Ministry”.

Proceeds from the sale would finance “a major project to develop Gan airport,” he said, including expanding the runway and repairing damages in the airport as well as establishing a new drainage system and a seaplane base.

“The estimate of the consultants for all this is US$40 million. So even if we obtain loan finance or contractor finance for this US$40 million project, we would need an equity injection,” he explained. “Therefore, we need an investment to get this equity injection – a party that would give this money to the company as an equity injection.”

The AIA board in consultation with the government decided to invite proposals from Maldivian companies, Shahid said, adding that Kasa Holdings was the only local company to submit a bid.

Shahid stressed that Kasa Holdings was sold a stake in the management company AIA and not the Gan airport.

On the allegations of corruption by the government-aligned JP, Shahid insisted that the sale was made “through an open and transparent bidding process,” adding that AIA would “welcome” an investigation.

The Anti-Corruption Commission (ACC) revealed to local media today that it commenced an investigation into the sale of the AIA stake last month based on assertions in the press.

ACC Deputy Chair Muaviz Rasheed told newspaper Haveeru that the investigation would be completed this week.

Letter to the President

Speaking in parliament yesterday, JP MP Alhan Fahmy claimed that the “self-interest” of Dhivehi Qaumee Party (DQP) was behind the sale of the AIA stake, alleging that DQP senior officials Imad Solih and the party’s leader and Special Advisor to the President Dr Hassan Saeed were complicit in corrupt dealing.

“The government should not sign this agreement. This case should be investigated at a national level,” he said, claiming that the 30 percent stake “could be sold tomorrow to an Israeli party.”

“Addu Atoll Gan is a military strategic location the whole world is watching,” he claimed, calling on the government to reconsider the decision.

Alhan told Raajje TV last night that JP would submit the case to the ACC and parliamentary committees, repeating the corruption allegations and questioning the valuation of the 30 percent stake.

Alhan claimed that Dr Saeed had asked JP Leader Gasim not to oppose the deal at a meeting at the President’s Office yesterday.

In a letter to President Dr Mohamed Waheed Hassan Manik last week, Gasim contended that MVR60 million for 30 percent of AIA’s share was “a very small amount” as the value of the airport would exceed MVR 3 billion (US$200 million).

Moreover, while US$44 million had been estimated as the cost of developing the airport, the JP MP claimed that the project could be completed with US$24 million.

An “open tender just in China alone” for the project would suffice to prove his assertion, Gasim wrote in his letter to Dr Waheed.

Gasim warned that Kasa Holdings would be positioned to acquire 70 percent of AIA by moving to sell 40 percent to a buyer of its choice.

“If a member representing the government does not attend a board meeting held to sell this 40 percent, Kasa Holdings will have the power to sell 40 percent of shares to whoever it pleases at whatever price it wants,” Gasim wrote. “In light of my experience on how these [deals] are completed, I have to say that the ultimate result would be the remaining unsold 40 percent being sold to a buyer of Kasa’s choice and the opening up of the opportunity for Kasa Holdings to control 70 percent, and within this opportunity, for [Kasa] to sell 51 or more percent of AIA to another foreign party.”

Gasim further contended that the move would pose a risk to national security, as the government would have no legal powers over the company.

Cancelling the agreement would mean paying the foreign party a “huge amount in compensation,” he claimed.

Gasim insisted that the Gan aiport should be developed by MACL and offered in his letter to reclaim land for the project free of charge “using my own dredger, employees and machinery with the government only providing oil.”

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STO obtains US$32 million loan facility for construction of five-star hotel in Hulhumale’

The State Trading Organisation (STO) and Export-Import (EXIM) Bank of Thailand co-signed a US$32 million syndicated loan agreement on October 30.

Under the agreement, Exim Thailand and Bank of Maldives will jointly finance STO’s construction of the 5-star, 250-room Radisson Blu Hotel in Hulhumalé.

In a press release yesterday (November 5), STO revealed that according to the agreement 85 percent of the loan must be paid to contractors from Thailand or used to purchase construction material and equipment from Thailand.

The disbursement of the loan is to begin in 2013.

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Gasim alleges corruption in Gan airport development deal

Jumhoree Party (JP) Leader and MP for Alif Dhaal Maamigili, Gasim Ibrahim, has alleged corruption in the proposed sale of a stake in the Addu International Airport Company Ltd (AIA) to finance development of the Gan airport in Addu City.

The allegations were made in a six-page letter from the business magnate MP sent on Tuesday to President Dr Mohamed Waheed, which was leaked to local media last week.

The JP presidential candidate reportedly contended that the government had decided to sell a 30 percent stake in AIA to a local company named Kasa Holdings “without due consideration.”

‘Champa’ Hussain Afeef, tourism pioneer and business mogul, owns Kasa Holdings.

A consortium formed by the Maldives Airports Company Ltd (MACL), the State Trading Organisation (STO) and the Gan Airport Company meanwhile owns AIA.

AIA Managing Director Shahid Ali – also managing director of STO – confirmed to newspaper Haveeru in September that the AIA board of directors had decided to sell a 30 percent stake in AIA to Kasa Holdings for MVR60 million (US$3.9 million).

Shahid explained that Kasa Holdings and a Malaysian company had bid for the project following a public tender or announcement. He added that the Finance Ministry was consulted prior to the decision to sell the 30 percent stake.

Moreover, the bid announcement was made after the President’s Office approved the process, he said. However, the sale has been held up after the Transport Ministry asked the consortium to review the process and determine if the valuation was in line with the Public Finance Act.

Shahid said in September that AIA had requested legal advise from the Attorney General and that the government had not instructed the company on how to proceed.

Gasim meanwhile said in his letter that MVR60 million for 30 percent of AIA’s share was “a very small amount” as the value of the airport would be higher than MVR 3 billion (US$200 million).

Moreover, while US$44 million had been estimated as the cost of developing the airport, the JP MP claimed that the project could be completed with US$24 million.

An “open tender just in China alone” for the project would suffice to prove his assertion, Gasim wrote in his letter to Dr Waheed.

If the sale goes through, Gasim warned that Kasa Holdings would be positioned to acquire 70 percent of AIA by moving to sell 40 percent to a buyer of its choice.

“If a member representing the government does not attend a board meeting held to sell this 40 percent, Kasa Holdings will have the power to sell 40 percent of shares to whoever it pleases at whatever price it wants,” Gasim wrote. “In light of my experience on how these [deals] are completed, I have to say that the ultimate result would be the remaining unsold 40 percent being sold to a buyer of Kasa’s choice and the opening up of the opportunity for Kasa Holdings to control 70 percent, and within this opportunity, for [Kasa] to sell 51 or more percent of AIA to another foreign party.”

Gasim further contended that the move would pose a risk to national security, as the government would have no legal powers over the company.

Cancelling the agreement would mean paying the foreign party a “huge amount in compensation,” he claimed.

Gasim insisted that the Gan aiport should be developed by MACL and offered in his letter to reclaim land for the project free of charge “using my own dredger, employees and machinery with the government only providing oil.”

In October 2011, Gasim opened the Maldives’ first private airport at his native Maamigili with his ‘Flyme’ Villa airline landing the first flight in the new airport in Alif Dhaal atoll.

Gasim’s Jumhooree Party, part of the ruling coalition, is among parties calling for the nationalisation of the Ibrahim Nasir International Airport and cancellation of the previous administration’s concession agreement with Indian infrastructure giant GMR to develop and manage the Hulhule airport.

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STO, MTCC release third quarter earnings

The State Trading Organisation (STO) made a net profit of MVR104 million (US$6.7 million) in the third quarter of 2012.

According to STO’s income statement for the quarter that ended on September 30, the government company’s turnover was MVR 1.8 billion (US$117 million) while it made an operating profit of MVR 187 million (US$12 million).

Operating profit for 2012 so far stands at MVR 345.5 million (US$22 million).

Meanwhile, the Maldives Transport and Contracting Company (MTCC) reported a profit of MVR 3.8 million (US$246,433) after taxes.

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Doctors raise concerns over medicine shortages

Medical doctors, for the second time in 2012, have publicly expressed concern over medicine shortages in the Maldives.

In addition to official routes of raising concerns with relevant authorities, doctors have brought the issue of essential drugs shortage to the public’s attention and appealed to the government and the legislature through social media.

Dr Abdulla Niyaf, Chief Medical Officer and Senior Pediatric Consultant at ADK Hospital, has repeatedly expressed concern about the issue, specifically noting the recurrent problem of stock shortages in essential drugs such as neostigmine and phenobarbitone.

“As a paediatrician, we go in after each birth or cesarean to check on the newborn, full of concern that something might happen to the baby. If, say, the child’s heart malfunctions, and we are out of adrenaline, then there is nothing more that even us doctors can give,” explained Niyaf to Minivan News.

Niyaf said that the systematic issue of running out of stock of critical drugs was very serious, posing risks to the lives of many. He said that it is a huge concern as a doctor that he would be unable to provide immediate medication to patients who are in crucial need of specific medicines, due to complications with stock renewal.

Niyaf further said that he had previously sat down to discuss the matter with the State Trading Organisation (STO), the sole company licensed to import controlled drugs, and other relevant authorities. The answer had always been that the suppliers were facing issues of licensing, permits, delays in customs and so on.

“For how long can we, as doctors, keep listening to these justifications? All I want is for the issue to be resolved and for patients to have the chance of getting the best possible medical attention,” Niyaf said, expressing concern that the relevant authorities had so far not been able to resolve the issue.

Dr Faisal Saeed, another practicing doctor, told Minivan News that the matter was “a very real concern”.

“It is true that many medicines are often out of stock, but that doesn’t lessen the gravity of the problem. I don’t believe it is an option to be ever out of stock. What will any patient do if a critical medicine is unavailable at the time they most need it?”

Saeed further confirmed that there was a current shortage, stating: “As doctors, we worry about this. If something happens, it is we who must take responsibility. Our question is, when this country runs out of medicine, who is to be held accountable? Who will take responsibility for this?”

Dr Fathimath Nadhiya stated that the issue of shortages of even the most essential drugs has been a longstanding concern for a long period of time, further saying that if shortages were such an issue in the capital island Male’, then the loss must be felt even more harshly at remote island health facilities.

“Hospitals and health centres store the minimum required amounts of critical medicines at any given time. But we are not aware who carries the oversight responsibility to check whether this minimum is always maintained,” Nadhiya said.

She further spoke of her worry that with the lack of monitoring, island health facilities may have an even harder time to obtain many of the critical medicines. She said that in many islands, there were only one or more pharmacies run by private businessmen, who would prioritse medicine supplies not based on their medical importance, but rather on their sales statistics.

Ahmed Afaal, Managing Director of ADK, has also expressed concern on the matter on social media network, Twitter. He sent a message to President Dr Mohamed Waheed Hassan, urging him to look into the matter, stating that “tomorrow we may have to stop surgeries [because of an] injection neostigmine shortage. The only supplier is out of stock. Please help.”

Not yet a “doomsday scenario”: government

While many practicing clinicians have expressed concerns on the matter, the government denies the issue is as serious as claimed by the doctors.

“Checked with Health Minister and STO MD. There is no reason to worry about medicines,” President Waheed said,  in a short statement on Twitter.

Minister of Health, Dr Ahmed Jamsheed, backed the statement, saying at a press conference on Sunday that “although some social media messages on Twitter by practicing doctors may make the public dread a doomsday scenario, things aren’t all that bad yet”.

Jamsheed however did confirm that medicine shortages were a recurring problem in the health sector, stating that the Ministry of Health was planning to start a programme with the assistance of UNOPS and WHO to create a procurement/supply chain management system. Jamsheed said he believed that all the current concerns would be addressed and found a solution to through this programme.

“There is a common misconception that I would like to clarify. Although people usually assume otherwise, the health sector has never been involved in importing and supplying medicines. This is left to the private sector and the government-owned company STO,” Jamsheed explained.

“What we are seeing is that those responsible are not able to sufficiently supply medicines. I think we need to change this system if we are to find a solution. If we are to get a permanent solution, then we must make supplying medicines to patients the responsibility of the service provider, regardless of who imports it.”

Although some local practitioners say that the complaint is that the first choice medicines are unavailable, Jamsheed alleged that some of the complaints were because brands of medicine preferred by an individual doctor were not widely for sale.

“If there is an emergency, then the routine is that hospitals or the government flies in the medicine from neighbouring countries at the earliest,” Jamsheed said.

“If those staff in medical facilities who are responsible for these tasks are able to perform their jobs correctly, then it wouldn’t come to such a critical stage where provision of services are interrupted,” he stated.

Meanwhile, some doctors who spoke to Minivan News rejected the idea that emergency stocks were a solution, insisting that stock records ought to better kept and that patients in critical conditions do not have the option of waiting for medicine stocks to be flown in.

Legislative intervention

Maldives Democratic Party (MDP) MP Ibrahim Rasheed ‘Bonda’ submitted an emergency motion to the parliament on Monday, calling on the legislature to take action to “immediately resolve” the problem of medicine shortages.

Rasheed claimed that this failure to provide critical “life-saving medicines” to patients in crucial need of them was causing loss of lives.

“When practising doctors take the initiative to raise concerns, we realised the gravity of this problem. We then researched the issue in depth,” Rasheed told Minivan News.

“Millions of rufiya worth medicines need to be disposed of due to the failure to manage stocks. The stock is still managed manually. There is also a lot of corruption involved in the procurement and supply of medicines,” he said.

“There are permanent parliament committees within whose mandate this issue will fall. The problem is there are already a large number of pending bills that need to be worked on by these committees. We are now discussing within our party to determine what the most effective course of action will be,” Rasheed said.

During the one hour debate that ensued after the submission of the motion, Dhivehi Rayyithunge Party MP Ahmed Mohamed claimed that health services in his constituency had deteriorated, calling the condition of health care provision “regrettable”.

Progressive Party of Maldives (PPM) MP Adam Ahmed Shareef stated that health centres in the constituency he represented did not have the capacity for “the most basic tests”, adding that the pharmacy was managed by the women’s committee.

STO Spokesperson Ismail Sadiq was unavailable to speak to Minivan News this afternoon, and was not responding to calls.

Minivan News was not able to contact the Director General of Maldives Food and Drug Authority, Shareefa Adam, as her phone was switched off up to the time of press.

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National Security Committee to resume STO oil trade investigation

The National Security Committee has decided to resume its investigation into the alleged US$800 million illegal oil trade involving the State Trading Organisation (STO).

The scandal emerged last year after an Indian magazine described Abdulla Yameen -former head of the STO and half-brother of former President Maumoon Abdul Gayoom – as “the kingpin” of a scheme to buy subsidised oil through the STO’s branch in Singapore and sell it on through an entity called ‘Mocom Trading’ to the Burmese military junta, at a black market premium.,

Committee Chair Maldivian Democratic Party (MDP) Chairman ‘Reeko’ Moosa Manik said that information will be gathered from the Attorney General and the ACC, reported local media.

Yameen was summoned for questioning last by the committee last year, telling the members that he was not aware of Mocom’s activities.

In August, the MDP accused the government of calling a halt to the investigation after the Attorney General (AG) revealed that the government had received a bill of $10million from the forensic accounting firm Grant Thornton.

The MDP alleged was a penalty imposed for cancelling the firm’s investigation into the case.

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Prosecutor General receives corruption case involving STO Managing Director

The Anti-Corruption Commission (ACC) has forwarded a case to the Prosecutor General (PG) concerning the case of the Managing Director of the State Trading Organisation (STO) Ali Shahid, reports Sun Online.

It is alleged that Shahid used a corporate credit card inappropriately to pay for the medical treatment of a younger sibling.

The commission, it is reported, noted that the misuse occurred before the STO board stated that cards could be used in personal emergencies.

Shahid is alleged to have defended his use of the card under the STO’s loan provisions for medical treatments although the ACC claim he did not request this loan first.

Last month the ACC sent the PG a case concerning former Chairman of STO Farooq Umar after it was alleged he accepted a $19,000 (MVR292,800) from a Sri Lankan company.

Farooq also stands accused of using an STO corporate credit card for personal items.

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Former STO chair’s case passed to PG

The Anti Corruption Commission (ACC) has sent a case concerning former Chairman of State Trading Organisation (STO) Farooq Umar to the Prosecutor General (PG).

The ACC has reportedly said that Farooq accepted a $19,000 (MVR292,800) from a Sri Lankan company.

Farooq also stands accused of using the corporate credit card for personal items, something the STO has said is allowed in emergencies according to its policy. Sun reported that Farooq had told the paper different in a previous interview.

Farooq was removed from his post when President Dr. Mohamed Waheed Hassan reconstituted the boards of government companies after taking office.

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