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Page added on November 1, 2012

Indian investors concerned about government’s political interference: Business Standard

Indian investors concerned about government’s political interference: Business Standard thumbnail

Indian companies operating in the Maldives are expressing concerns over political interference they claim is derailing their substantial investments in the country, reports India’s Business Standard publication.

Officials involved in the Apex Realty housing development project – a joint venture between developers SG18 and Indian super-conglomerate TATA – told the Standard that the government was attempting to take over the site in Male’ given to the company, with the intention of building a new Supreme Court.

After being elected in 2008, former President Mohamed Nasheed moved the Supreme Court into the opulent palace of his predecessor, Maumoon Abdul Gayoom, opting for the less lavish building of Muleaage as the Presidential residence.

“A recent meeting held with the Maldivian Housing Minister is said to have ended abruptly with officials from the firm and the Indian High Commission being asked to leave,” the Standard reported.

President Mohamed Waheed’s Media Secretary, Masood Imad, confirmed to the publication that the meeting had taken place, and said the minister had given them time, even though it was “unannounced”.

“I am told that the meeting continued for about an hour. TATA Housing officials were raising issues that were not in the contract but the Minister accommodated most of the issues. Most of the issues discussed were procedural,” Masood was reported as saying.

A source involved in the deal confirmed to Minivan News that the government had offered land in Hulhumale’ to the developers as an alternative to the agreed site in Male’. However, the same source said the developers felt the change would affect the financing of the project.

Minivan News was awaiting a response from the Indian High Commission at time of press.

GMR grievance

Indian infrastructure giant GMR has also raised concerns about the new government’s handling of its concession agreement to manage and develop Ibrahim Nasir International Airport (INIA), signed with the former administration.

The company has previously sought to downplay its issues with the government in the media, however “public statements and press conferences of some government ministers and coalition party leaders are clearly aimed at arousing public sentiments against GMR and creating undue challenges for us,” the company told the Standard.

“To gain political advantage, some elements of the government itself have started hampering the smooth functioning and development of the airport,” the company added.

Moreover, the government was passing new laws and policies that were harming its interests.

“GMR was granted required approvals and licenses to operate Arrival Duty Free on December 30, 2011. We made huge investments in development of arrival duty free area. However, the government later revoked the licence citing that earlier the licence was given in error,” the company told the Standard.

“Similarly, On April 23, 2012, the GoM (Government of Maldives) passed an amendment to Business Registration Bill to restrict any foreigner to carry on Duty Free business, cargo clearance business, and bonded warehouse business at the airport. This step is clearly directed against GMR.”

The comments follow a US$2.2 million bill handed to the government’s side of the airport contract – the Maldives Airports Company Limited (MACL) – following a third quarter in which the airport developer deducted its contractually-mandated airport development charge (ADC) from concession fees due the state.

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 US$25 ADC, stipulated in the developer’s concession agreement signed with the Nasheed government, was to be levied on all outgoing passengers at INIA.

However, the former opposition Dhivehi Qaumee Party (DQP) – now part of the coalition government – in late 2011 filed a successful case in the Civil Court challenging the legality of the charge on the grounds that it was a tax not approved by parliament.

Nasheed’s government instructed MACL to deduct the ADC from the concession fees due the government while it sought to appeal. However soon afterwards Nasheed resigned in controversial circumstances, handing power to his Vice President, who swiftly replaced much of the government with appointments from the former opposition.

Speaking to the Standard, Masood said that the government “will not target any investment, Indian or otherwise unduly. The assurances given by the President securing foreign investments in Maldives are valid and stand true.”

However Attorney General Azima Shukoor told media this morning that “After the necessary research, we have said that the GMR agreement causes financial loss to the state.”

She expressed confidence that the government would win the case in the Singapore court of arbitration, the next hearing of which is to be held on November 19.

“I would like to point out that the Anti-Corruption Commission (ACC) still hasn’t finished the complete investigation into the GMR matter. This also presents difficulties for us, she said.

“I have met with the heads of ACC and Auditor General two, three times. I can’t say anything about the investigations. But I haven’t heard back anything after I shared the information I had available with them.”

Other elements of the government have also persistently called for the airport’s nationalisation.

DQP Leader Dr Hassan Saeed, now Waheed’s Special Advisor, at the launch of a book (in Dhivehi) last month criticising the airport development, said that the “only way to reclaim the airport from GMR” was to invalidate or cancel the concession agreement.

Home Minister Dr Mohamed Jameel – also a DQP member – said at the launch that it was the “duty of the most capable people in the country” to step forward and help “liberate” the nation from “grave problems” during the current “difficult times”.

The religious Adhaalath Party, likewise aligned with the current government – in September called for a “national jihad” to nationalise the airport development.

Another government-aligned party, the Jumhoree Party (JP) headed by resort tycoon, media owner and member of the Judicial Services Commission (JSC) Gasim Ibrahim, has also called for the nationalisaiton of the airport.

In September Gasim urged the government in to reclaim the airport, even at a cost of US$700 million, as it was worth “a thousand times more”.

Gasim’s comments followed GMR’s decision to suspend the credit facility for his Villa Air airline, due to unpaid bills totaling MVR 17 million (US$1.1 million) for fuel, ground handling and passenger service fees.

In late September GMR sponsored the inaugural Maldives Travel Awards, held on Gasim’s Paradise Island resort.

Paradise won the title of ‘Leading Business Hotel’, while Gasim’s Villa group of companies also picked up an award for ‘Leading Domestic Airport’. Gasim himself received a ‘Lifetime Achievement’ award.

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20 Comments on "Indian investors concerned about government’s political interference: Business Standard"

  1. mody on Thu, 1st Nov 2012 8:31 PM 

    Taj Group is doing business in Maldives for many years and there was no issue with them at all.

    There many foreign investors doing business in Maldives in tourism sectors and they have no problem in running thier resorts.

    There are some investors who had invested over a billion dollars in Maldives and they have been doing business in Maldives for last 20 years and Peole like HPL group from Sigapore have over a billions dollar investment in Maldives.

    Anantara group, banyan Tree group, One and Only group to name a few., Shangrilla etc.

    Why government is not interfering with them, because they are doing the business within the legislative process .

    One need to understand why GMR deal is being investigated and why it is required to monitor and why it is required to cancel.

    GMR itself knows that they got the deal through corruption and they were aware of the deal and took a risk knowing the huge profit that they will earn from the airport.

  2. Dhuniya Pgal Hai on Thu, 1st Nov 2012 11:22 PM 

    Indian investors are not concerned. Minivan News is. MDP is. Probably JJ also is.

  3. Mody Ah Vedhun Salaam on Fri, 2nd Nov 2012 2:58 AM 

    Wow, Mody, wow!!

    Looks like you have fastracked your education to write a coherent comment!

    or not??

    How much are you getting to sell your name for other people writing in your name?

  4. Hussain on Fri, 2nd Nov 2012 2:59 AM 

    GMR deal is one sided. Due to that unfair deal,the foreign currency shortage was aggrevated. Major problem faced by the present government in their efforts to claim the Airport is there are highly corrupted individuals who would not be concerned of the country but looking at any opportunity to make unscruplous gains. We must reveal their names and purge them from Government and then proceed with legal action to regain control of the airport and ease the county’s sufferings.

  5. Hamza on Fri, 2nd Nov 2012 4:40 AM 

    This is a Political Propaganda created by ex president of Maldives Gayyoom backed by Mr. Gasim Ibrahim, the owner of Villa Group.Gayyoom wanted to take over the country and the best excuse was GMR and Indians! while Gayyoom was saved by the very same Indians in 1988! Mr. Gasim wants to swallow the whole country. He built his own domestic airport (note its very third class in structure and operation) and he bid for the same project with GMR but he lost! Now he is also attacking Addu Gan Airport and going for head collison with Champa Afeef. But its very likely Gasim will win becuase alledgely Gasim was the main financier for the Coup on 7th February. Laos Gasim has a politically motivated medical assitance scheme based in Trivandrum where he sponsors some Maldivians for medical there. Villa has an unoffical office, and Gasim has been long since trying to officially open that office and transfer money etc to enlarge his political begging system, however India has NOT let him do that its against Indian Law. But Gasim is Gasim. an illiterate idiot who got few millions and has an ego ambition to do whatever man does on earth. and Gasim with Gayyoom will remain playing hide and seek and finance this game until they get what they want. Gasim did the same against Gayyoom in 2004/2005 and got ot be the finance minister : what a joke! and also Gayyoom in return cancelled TOURISM RENT PAYENT for 4 of his resort island for FOUR years 2004-2007 on the premise of TSUNAMI..what a joke! my deal fellow Maldivians and Indians. You should know who is Gayyoom and Gasim and What they want! India is NOT aware of this. Because Mr. Muley is paid enough by Gayyoom and Gasim and he sends reports otherwise. so its quite complicated and Indian investors are suffering in between…and local Maldivians are loosing the political game for Gayyoom again. Now look at what Dr.Waheed the coup president is doing. He is taking Sun Travel Shiyam, who is vying for presidency in 2013 or 2018 longest, in his trips to islands. Waheed said its a political message! ha! and of course Shiyam pays for that is USD! what a joke! Maldives will remain like this as long as we Maldivians want it to remain like this with our ignorance and support to coup , Gayyoom , Gasim, Waheed etc! unless and until you get rid of these bad spirits Maldives will never be free…! believe me..truth may be sour!

  6. Ahmed bin Addu bin Suvadheeb on Fri, 2nd Nov 2012 5:36 AM 

    Look, it’s very simple; so simple that even the commentators on here can understand what I’m about to say (one hopes).

    The airport was a fat milk laden cow, that made many a local tycoon prosperous. Turning that cow into a “holy” cow has pissed them off just a bit, shall we say.

    That’s the whole thing in a nutshell and there really isn’t anything more to it than just that!

  7. Missindia Newdhelhi on Fri, 2nd Nov 2012 6:43 AM 

    You Maldivians are filthy scraggly,
    India should not help you at all, and leave you to rot.

    Our people smell better than yours!

  8. Wahid on Fri, 2nd Nov 2012 7:58 AM 

    Gmr is a corporate predator..they are taxing the public through fees and levies on the export, import and passenger service charge as they see fit. No company anywhere in the world can be allowed to fix their own fees without any regulation. They do not even allow local businsses to flourish and kicked out all local businsses from airport. They opt to deal with government by pacifying corrupt politicians. They are unethical and will go to any means to preserve business interest and do not think of giving back to the country they take profits from. They should leave ASAP

  9. mediabug on Fri, 2nd Nov 2012 10:06 AM 

    Rubbish!This government is doing it for political reasons and has no business sense.The bids for the airport were conducted by the IFC. This indeed is the only transparent contract in a country where the islands are given to friends and relatives in a routine manner.The leaders of the country need some lessons in basic decency , business management, and rule of law.What is going on is law of jungles. Government changes and then it wants to cancel previous agreements.What’s happening to Maldives!This place is suffering from political chaos and policy paralysis.GMR is the low hanging fruit but once it is plucked the country would be on its way to disaster.

  10. ul on Fri, 2nd Nov 2012 2:24 PM 

    although resorts are built on islands that are public property, the bulk of income goes to very few people who get lucky in a bidding process,or bribe and get it through corrupt means.when they get it they do everything in their power to hold on and extend the period they can hold on to it.after all they do invest a lot in it. and they have been very successful at extending this time frame.gmr will be the same. they will not give up the airport easily.mdp truly sold off the airport for less than its worth and made some corrupt money for themselves.

  11. mody on Fri, 2nd Nov 2012 3:13 PM 

    Resorts were given as bare land and no investments were put by the Government, but airport was not built by GMR and it was given in proper running condition and huge amount of money were receiving at the time of giving also. This is the difference .

    Resorts were build by the investors and with his money not with the public / government money but GMR is going to construct the new terminal with the money that they are generating from the airport and the loan is taken under the government name and agurantee is given also by the government.

    Resort developers they take the loan from the banks on thier names and government does not need to take the responsibility of the loan . If they default the loan then the personal who took the loan are responsible.

    No matter what Anni and his couurupt associates try to hide and defend the GMR deal, it is not a fair deal and the deal is done because Anni and his friends had got a huge cut put of the deal.

  12. Hashim Amla on Fri, 2nd Nov 2012 7:40 PM 

    proof please Mody.

  13. ali rasheed on Fri, 2nd Nov 2012 8:34 PM 

    Suppose we do take GMR out of the equation. We pay off USD 700 million. The next party that comes in – whether it be Chinese or Qasim – will probably work out an arrangement whereby corrupt government officials of the Waheed regime will benefit. The bottom line is the Maldivian public stands to shoulder an even heavier debt burden than now.

  14. 2000feet on Sat, 3rd Nov 2012 12:52 AM 

    Miss india.u smells like assss.

  15. Indira NewDelhi on Sat, 3rd Nov 2012 2:25 AM 

    After the GMR debacle I hope Indian investors will pull their money out and invest it elsewhere……….I wonder why your sunni brothers in Saudi Arabia and Pakistan have not invested a single rufiyaa in your infrastructural projects. I have previously pointed out the many many things you have in common with your Pakistani brothers……..particularly your intolerant faith and your addiction to drugs.
    I’ve always wondered how a motley collection of 350,000 islanders can afford to run and operate a modern international airport. Shouldn’t you carry on with your primitive island ferries and the clapped out prop planes of TMA?
    My advice to our prime minister……..should the president or finance minister of Maldives ring up for more money………DON’T ANSWER THE PHONE SIR!!

  16. mody on Sat, 3rd Nov 2012 10:35 AM 

    hashim,

    Prrof will unavil and wait.

    People like yourself think and believe that Anni will never touch a single cent from the public money and he will never take any bribe and will nerve commit any crime and never do anything against the law.

    When proof is given and when individual person file any case against Anni, the particular person will be under attack by Anni and his Gangs . So it is very unlikely that an individual can ever open their mouth against Anni for such issues.

    But the authorities should file the cases like what they have done as Judge case and I believe that GMR case also will be filed sooner or later to get the truth revealed and then get those corrupt people exposed

  17. RespectDaFacts on Sat, 3rd Nov 2012 5:55 PM 

    One simple question to all the Maldivians who protest the GMR:

    Who do you want to nationalize the airport from?

    Maldives government is already an owner on the deal!!!

    You want to take away the deal from yourselves!!!

    Speaks of the intelligence of the country when this simple fact cannot be processed.

    Speaks volumes of the way Maldivians handle trust vested in them, and the manner in which GOVERNMENT contracts are honoured.

    Congratulations! You don’t have the backbone to do an honest day’s work, so you want to suck it out in a corrupt manner.

    Good luck and good riddance. You will get exactly what you deserve.

  18. Hashim Amla on Sat, 3rd Nov 2012 6:30 PM 

    As I thought. Pure speculation. I keep an open mind. If you present some proof then I’ll form an opinion. Until then, your words are worthless.

  19. Barbarian on Sun, 4th Nov 2012 10:10 AM 

    India is crazy to pour money in to Maldives dictatorship.

    India please stops sponsoring maldivian dictators with your money. Indirectly the money goes to finance Jihadi movements in India and surrounding countries.

  20. nonsense on Sun, 4th Nov 2012 2:58 PM 

    Why is GMR financing a bunch of whites who run MINIVAN to disturb peace and tranquility of this beautiful Maldives to meet INdira Gaaaaaandhi, Rajeeeeeeeev, and sonia etc hopes of owning Maldives as part of India..Forget it you will never….


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