Government authorised to lease islands without bidding

The ruling party-controlled parliament voted through today controversial changes to the tourism law authorising the government to lease islands for resort development without a competitive bidding process.

The bill was passed 45-19 with MPs of the ruling Progressive Party of Maldives backing the government-sponsored amendments in defiance of an appeal by former President Maumoon Abdul Gayoom.

However, the PPM leader’s son, MP Faris Maumoon, broke ranks and voted against the bill. It is unclear whether he breached the party’s whip line.

Abuse of discretionary powers caused irreparable damage to treasury. Crucial to minimize discretion, increase transparency & accountability

— Ahmed Faris Maumoon (@afarismaumoon) June 29, 2016

Once the changes come into force, the tourism ministry can lease islands, lagoons and plots of land without making a public announcement to invite bids, to any party that submits a proposal to its liking.

The bill requires the ministry to formulate criteria for evaluating proposals, ensure that the proposed site is suitable environmentally, and seek approval from the president’s office.

The auditor general and the anti-corruption watchdog must be informed after the lease agreement is signed and the company must be able to pay acquisition fees in full.

The ministry must also publish annually a list of islands, lagoons, and plots of land the government intends to lease during the year. But the ministry will have the discretion to omit or add properties in consultation with the president’s office.

Pro-government MPs claimed the bill is not a new concept, as previous governments had leased islands without bidding to joint venture companies and state-owned enterprises.

The changes are intended to close the loophole and lay down procedures, they insisted.

But opposition MPs warned that the new rules would cause “irreparable damage” as it effectively “legalises corruption.”

MPs of the main opposition Maldivian Democratic Party noted that loopholes in the Tourism Act were exploited to steal millions of dollars in resort lease payments under President Abdulla Yameen’s watch.

According to a damning audit report released last February, some US$65.01 million collected as acquisition costs by the state-owned Maldives Marketing and Public Relations Corporation was siphoned off into private bank accounts.

The MMPRC had subleased some 59 islands, lagoons and plots of land for development as resorts, hotels and yacht marinas.

The embezzlement of nearly US$80 million from the tourism promotion company was a corruption scandal of unprecedented scale in Maldivian history. Yameen has insisted his jailed former deputy bears sole responsibility for the theft.

The amendments passed today also introduces a US$3 per day ‘green tax’ for guesthouses as well as fees for services provided by the tourism ministry.

It also authorises the government to sell its stake in joint venture tourism companies and extend resort leases for 99 years despite outstanding rent and fines.

The tourism law previously required a lump sum payment of US$5 million to extend leases to 99 years for operational resorts that do not owe any money to the government. However, the clause was amended to authorise the tourism ministry to postpone rent and fines under an agreement.

The parliament’s approval of the bill less than two weeks after it was introduced has drawn stringent criticism on social media.

Former Auditor General Niyaz Ibrahim, who was dismissed after exposing corruption in the MMPRC in late 2014, called today’s vote “a betrayal of trust” by elected representatives.

“A bunch of filthy puppets whose strings are held by a criminal mind, who loves nothing but ill-gotten money, unchecked powers and authority without accountability, are stripping it’s citizens of all what they have, all what they fought for and all what they desired or dreamed off,” he wrote in a Facebook post.

“Do we call ourselves a nation or a private limited company engaged in money laundering, drug trafficking and every sort of criminal activity which gives the masters a penny?

“A new term has to be coined to describe these islands…. and the story continues….. For how long? Until such time when people realize that they are citizens with equal rights, not subservient subject of an authority without popular support….. till they realize that they are being systematically deprived of the fair share of their commonwealth. But for the time being they are in a deep slumber of ignorance.”

In 2015, the parliament, with the opposition’s backing, amended the constitution to authorise foreign freeholds in the Maldives for the first time. Yameen’s administration has also amended financial regulations to allow large-scale projects to be awarded without a competitive bidding process.