Feydhoo Finolhu leased to Chinese company for US$4m

Feydhoo Finolhu leased to Chinese company for US$4m
December 24 09:37 2016

Feydhoo Finolhu, the nearest uninhabited island to Malé and the international airport, has been leased to a Chinese company for 50 years at an acquisition cost of about US$4 million, Tourism Minister Moosa Zameer revealed Tuesday.

The island previously used by the police welfare company was among 11 islands and two lagoons listed by the tourism ministry in late October for leasing before the end of the year.

The tourism law was controversially revised in July to allow the government to bypass a competitive bidding process and lease listed properties to parties that submit a suitable proposal for a pre-determined acquisition cost.

Speaking to reporters after a function held to launch an official tourism website, Zameer said Feydhoo Finolhu is the only listed property to be leased for resort development so far. The government is evaluating proposals for the other islands and lagoons, he added.

The minister did not disclose the name of the Chinese company.

“According to the law, the [Anti-Corruption Commission] and the Auditor General’s office have to be informed when the payment is made. They have been informed,” he said.

Feydhoo Finolhu was previously used by the education ministry for school trips and cadet, scout, and girl guide activities.

In addition to rent and taxes to the state, Zameer said the police welfare company will receive US$70 to US$80 million during the 50-year lease period.

However, the government has faced criticism for its valuation of the properties. Opposition figures contend that Feydhoo Finolhu would fetch much more than US$4 million as the island is a five-minute speedboat ride from the airport.

Mohamed Maleeh Jamal, former youth minister under the current administration, said the acquisition cost for the island would be US$15 million if it was put up for bidding.

Earlier this month, the tourism ministry added the island of Huruelhi in Alif Dhaal atoll to the list of properties. The estimated acquisition cost for the island is US$3.6 million.

Meanwhile, in early November, the main opposition Maldivian Democratic Party vowed to cancel “corrupt” deals and reclaim the properties leased without bidding.

If corruption is uncovered in “a major investigation” carried out by a new administration, “the transactions will be declared void and we assure the people that the properties will be taken back,” the party said in a statement.

The list of properties also included the 1,475-hectare lagoon of Fushidhiggaru near Malé for US$72.6 million. The lagoon was previously leased to a joint venture company formed between the government and Prime Capital Maldives Pvt Ltd to develop a special tourist zone.

In September 2013, the Ukraine-based Prime Capital sued the government after the economic development ministry refused to register the joint venture company, citing lack of authorisation from then-President Dr Mohamed Waheed.

But the JVC was registered in August 2014 after the civil court ruled in Prime Capital’s favour.

It is unclear whether the government has since cancelled the lease agreement. An official from the tourism ministry’s legal department refused to comment, claiming he could not reveal “personal information” of the parties involved in the dispute.

According to local media, the anti-corruption commission in March instructed the ministry not to hand over the lagoon before the full acquisition fee was paid.

The Fushidhiggaru deal first came to light during the 2013 presidential elections when former Home Minister Umar Naseer accused then-Tourism Minister Ahmed Adeeb of selling off the lagoon in a clandestine deal. Adeeb at the time denied the existence of an “official” lease agreement and dismissed allegations of graft.

The MDP meanwhile went on to reiterate its aim of changing the “weakening and isolated” government, which it described as lacking public support and “tainted” by the Maldives’ biggest corruption scandal.

According to a damning audit report released last February, US$65 million collected as acquisition costs by the state-owned Maldives Marketing and Public Relations Corporation was diverted into private bank accounts.

President Abdulla Yameen insists his jailed former deputy bears sole responsibility for the unprecedented theft from state coffers under his watch.

“While the billions of rufiyaa embezzled from the MMPRC after leasing islands and lagoons for tourism purposes as instructed by the economic council chaired by President Abdulla Yameen have not been recovered and put back in the public treasury so far, the MDP calls on the public not to consider that such transactions conducted by this criminal government will not involve corruption again,” the party said.

Based on the estimated acquisition costs for the properties, the government is expecting to raise about US$182 million in revenue.

List of islands and lagoons to be leased this year with estimated acquisition costs,

  1. Haa Alif Vagaaru, 22.60 hectares, US$2,825,000
  2. Haa Alif Gaamathikulhudhoo, 13.10 hectares, US$1,637,000
  3. Haa Dhaal Dhipparufushi, 8.20 hectares, US$1,025,000
  4. Haa Dhaal Muiri, 53.60 hectares, US$6,700,000
  5. Noonu Loafaru, 11.70 hecatres, US$4,445,000
  6. Baa Bodufinolhu, 7.20 hecatres, US$4,100,000
  7. Baa Innafushi, 3.2 hectares, US$2,100,000
  8. Baa Fares, 12.4 hectares, US$6,700,000
  9. Kaafu Feydhoofinolhu, 4.10 hectares, US$3,060,000
  10. Seenu Ismehelahera and Kedavahera, 8.52 hectares, US$1,065,000
  11. Seenu Savaheli, 10.40 hectares, US$1,300,000
  12. Lagoon near Huvafenfushi in Kaafu atoll, 151 hectares, US$52,765,000
  13. Kaafu Fushidhiggaru lagoon, 1,475 hectares, US$72,625,000
  14. Alif Dhaal Huruelhi, 6.30 hectares, US$3,650,000