Business & Tourism
Arbitration case filed in Singapore over Fushidhiggaru lagoon
The 1,475-hectare lagoon was leased in January 2013.
A compensation claim has been filed at the Singapore International Arbitration Centre over the lease of the Fushidhiggaru lagoon near Malé, the Attorney General’s office revealed on Monday.
The 1,475-hectare lagoon was leased in January 2013 to a joint venture between the government and Prime Capital Maldives to reclaim 27 islands for development as a special tourist zone with hotels as well as residential and office buildings.
Citing the arbitration notice, the AG office said Prime Capital is seeking compensation for damages over the government’s failure to hand over the lagoon. Details could not be disclosed as the government was obliged to maintain secrecy of arbitration proceedings, the AG office noted.
The government has been under fire over large sums paid out as compensation for the cancellation of contracts under previous administrations with the anti-corruption watchdog probing payouts in several cases. The finance minister told parliament in early October that the state has paid MVR1 billion (US$64.8 million) as compensation since November 2018.
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.
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 president Dr Mohamed Waheed.
But the JVC was registered in August 2014 after the civil court ruled in Prime Capital’s favour.
According to local media, the Anti-Corruption Commission in March 2016 instructed the ministry not to hand over the lagoon before the full acquisition fee was paid.
The lagoon was among a list of properties put up for lease at pre-determined acquisition costs by the previous administration in 2016. Fushidhiggaru was offered for US$72.6 million.
The tourism law was controversially revised in July 2016 to allow the government to bypass a competitive bidding process and lease listed properties to parties that submit suitable proposals. The current administration has kept the provisions in place despite reversing or repealing several legal changes made by the previous government.