The Edition

Latest

State compensates Noomadi with USD 55 million

Shahudha Mohamed
10 October 2019, MVT 16:17
Flats under construction by Noomadi Resorts and Residences. PHOTO: NOOMADI
Shahudha Mohamed
10 October 2019, MVT 16:17

Ministry of Housing and Urban Development confirmed on Tuesday that the state paid USD 55 million (approximately MVR 849,750,000) to Noomadi Resorts and Residences Maldives, in compensation for the former government unlawfully terminating contracts with the company.

Noomadi filed cases against the state at the Permanent Court of Arbitration (PCA) located in The Hague, Netherlands, seeking USD 155 million (MVR 2.3 billion) and additional costs related to the arbitration process.

According to the ministry, Noomadi submitted two cases to the firm. One of the agreements were signed on January 20, 2011, to build 600 housing units, while the second agreement, signed on May 30, 2013, was for the construction of 500 housing units, development of the Maldives Police Service's Police Academy Phase One, and the establishment of sewerage systems on three islands.

However, the agreements were later nullified by then-Minister of Housing Dr Mohamed Muizzu, resulting in Noomadi seeking compensation for their losses through arbitration.

"The Maldivian government decided on solving the case submitted for arbitration by Noomadi outside of court, following the advice of the Settlement Committee, established to advise the President on settling such matters out of court, after various discussions", Housing Ministry's statement read.

According to Housing Ministry's statement, an agreement to settle the issue out of court with a payment of USD 55 million was signed with Noomadi on August 25.

As per the Housing Ministry, the committee gave counsel on settling the cases out of court, and the state reached an agreement with Noomadi after discussions, with President Ibrahim Mohamed Solih's input.

Some top officials of the current administration previously claimed that former minister Muizzu admitted that the state pulled the plug on Noomadi's projects in violation of the agreement. They also allege that Muizzu addressed a document to the arbitration firm stating that the agreements were annulled on Yameen's orders.

Minister of Finance Ahmed Ameer confirmed that over MVR 1 billion have been paid off as compensation to many companies over similar matters.

This includes USD 18.1 (MVR 280 million) for Nexbis Maldives over the termination of a border control project in 2013, USD 5.6 million (MVR 130 million) to World Link Travel (WLT) for failing to lease out islands signed over for resort development, in addition to compensating the contractors with USD 26.1 million for liquidating Maldives Road Development Corporation (MRDC).

The state also recently paid the MVR 7 million sentenced by the court following proof of negligence by doctors which led to a child losing her hearing permanently.

MORE ON NEWS