The State Trading Organisation (STO) – Maldives’ primary wholesaler – has told local media that the five-star hotel it is developing in Hulhumalé will be fully completed in 12 months’ time.
Managing Director Ali Azim told Sun Online that he expected some rooms to be completed and available for use by January 2015.
The original contract for the development of the 250-room Radisson Blu Hotel was signed between the STO and the US Carlson Group.
Financial constraints delayed the start of the project until 2011, while the STO signed a US$32 million syndicated loan agreement in October 2012 to finance the development.
Full speed has been resumed on the construction after a further slowdown last year, Azim told Sun.
In 2012, then STO MD Shahid Ali told local media that the organisation needed at least “at least three resorts and one hotel” to meet its demand for foreign currency at a time the country was facing a ongoing dollar shortage.
“We are trying to a find a way to earn the foreign currency we need without relying on another party for it,” Shahid told Haveeru.
The Maldives grapples with a foreign currency deficit due to a heavy import-export imbalance. Goods from overseas must be purchased with foreign currency, but the Maldives has little ability to earn this outside the resort industry, which is thought to account for around 90 percent of the country’s foreign exchanges.
Since that time, new President Abdulla Yameen – who replaced Shahid soon after assuming office – has declared the STO bankrupt.
“Not only does STO not have dollars, it does not have Maldivian Rufiyaa either. Funding the oil import through STO is now a burden for the state,” said Yameen last November.
The STO sparked fears of an impending oil shortage crisis in early November, after Shahid warned the company would run out of oil in a matter of days if it did not pay some of its US$20 million debt to suppliers.
Shahid told an emergency meeting of parliament that government-owned companies had failed to pay the STO the almost US$40 million it was owed, and appealed to the central bank to use the foreign currency reserves to bail it out of its debt.
After his appointment as MD, Ali Azim announced plans to cut operational costs by MVR 50 million in 2014 (US$ 3,242,542).