Efforts made to award resort development project to GMR

It has been revealed that the Maldives Airports Company Limited (MACL), in cooperation with the former government, made efforts to award the resort development project at N. Huivani to Indian company and operator of Ibrahim Nasir International Airport, GMR.

The previous government opened N. Huivani and R. Dhigali for resort development in 2011 to raise money for the housing fund.

The bids for both islands were won by MACL, however, the project was halted following corruption allegations.

Today, the Auditor General has publicised the report on a special audit conducted on this issue.

The twenty-page report states that the project involved serious corruption, influence and collusion.

The report mentions a note sent by Chairman of MACL Bandhu Ibrahim Saleem to the Managing Director (MD) of MACL, which stated that Tourism Ministry had agreed to open the two islands for bidding on 11 April 2011, and that it had been agreed to bid $4.2 million for one island and $4.18 million for the other.

Tourism Ministry had shared this information with MACL, and said that these amounts are larger than normal resort bid amounts.

The note also reveals that after a meeting with the Tourism Ministry, the Chairman of MACL discussed the issue with the MD of GMR.

The report states that the two gentlemen met in Singapore on 7 April 2011 to discuss this issue, as requested by the MD of GMR.

During this meeting, the MD of GMR requested to be given 30 days to discuss taking over the development of the islands with senior officials of GMR.

The Chairman of MACL had informed the MD of MACL that GMR would settle the issue within the thirty days left to submit the bid.

The Auditor General noted in his report that these corrupt and collusive practices by the Chairman of MACL resulted in an unfair bidding process.

Moreover, the Chairman and Chief Operating Officer of MACL travelled to Singapore on business class to hold the meeting with the MD of GMR.

MVR18,891 was spent per person on the tickets, along with travel expenses of MVR14,315 per day per person for three days. This results in a total of MVR85,891.

The report also notes that a feasibility report on developing a resort in the Maldives was presented to GMR during this meeting.

Details of this trip were shared at the meeting of MACL Board of Directors held on 13 April 2011. The meeting records indicate that GMR had expressed interest in creating a joint venture with MACL to enter the tourist resort business in the Maldives.

The members of the Board rejected this proposal, and said that considering the experience with GMR, they did not support getting into additional business agreements with GMR.

The project was halted on 10 August 2011 following Finance Ministry’s permission prompted by complaints received by the government.

By then, the company had spent MVR70 million on the project, which had to be deducted from the company’s revenue for the year as a loss.

Seven trips were made for the development of Huivani as a resort, including MVR117,682 spent for chartering a sea plane to N. Irufushi Resort to inspect Huivani island. Also, MVR157,927 was spent on a trip to Singapore to meet with a company called STS.

Moreover, MVR129,469 was spent on a trip to Singapore to meet with a Project Director; MVR52,067 was spent on a trip to Sri Lanka to obtain loans for the development of the resort; and MVR289,119 was spent on trip to Bangkok and Dubai to find suitable parties for resort development.

Agreements were signed with five parties to comply with the requirements prior to the development of the resort. MVR102,180 was paid to Water Solution for conducting an environment impact assessment; MVR2.7 million was paid to Island Insurance for insurance services for the project; MVR878,94 was paid to Ernest & Young for conducting a feasibility study; and MVR262,140 was paid to Beach Rock Investment to conduct a survey of Huivani Island.

The report notes that MACL is currently making payments to some of these groups.

The Auditor General recommended that this matter be investigated by the Anti-Corruption Commission, as senior officials of Tourism Ministry had also participated in some of the activities.

He also recommended holding the relevant Directors responsible for awarding projects without a bidding process, as well as for the travel expenses, which he suggested should be reclaimed by the State.