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Maldives govt ignores audit concerns to press ahead with hotel project

Fathmath Shaahunaz
09 June 2016, MVT 06:30
Construction of a new hotel building at the site where Nasandhura Palace Hotel stood. MIHAARU PHOTO
Fathmath Shaahunaz
09 June 2016, MVT 06:30

The government has commenced the development of former Nasandhura Palace Hotel in capital Male’s northeast shore, in conjunction with an additional land plot with a lease agreement of fifty years, despite the auditor general’s report to revise the contract.

According to the auditor general, the long-term lease of the land had been issued with a CSR (corporate social responsibility) component instead of payment to the state. However, the agreement had not disclosed details of the CSR, which the auditor general had urged to be finalised. The government has not yet stated the reason for commencing construction despite the auditor general’s counsel.

The former Nasandhura Palace Hotel had been closed down during the twilight of former president Maumoon Abdul Gayoom’s regime to develop a park and restrooms for tourists in the land plot. However, following the change in ruling powers, former president Mohamed Nasheed had reopened the hotel, leasing its operation to Galaxy Enterprises for a period of eight years.

Incumbent president Abdul Yameen Abdul Gayoom’s brother-in-law Mohamed Manik is a shareholder of Galaxy Enterprises. Management of Nasandhura Palace Hotel had later been handed over to another company, unnamed in the auditor general’s report but believed to be NPH Investment Pvt Ltd which was newly founded with Manik as a shareholder.

According to the auditor general’s special report on the embezzlement charges surrounding the nation’s main tourism promotion body, Maldives Marketing and Public Relations Corporation (MMPRC), the tourism ministry had annulled the former agreement on Nasandhura on January 27, 2015, and on the same day signed to hand over Nasandhura and the adjacent building housing the former Island Aviation Services to MMPRC.

The two land plots were then leased to a company unnamed in the report, but believed to be NPH Investment. Following the handover, Sri Lankan media reported of NPH signing with Lankan company Browns Hotels and Resorts to develop a four-start hotel with 150 rooms and 100 apartments. In addition to NPH, Alpha Kinam Holdings Pvt Ltd, another company of which Manik is a shareholder, had signed the contract.

The state has yet to reveal their decision regarding the auditor general’s request to revise and finalise the agreement. Meanwhile, the tourism ministry has not provided any comments to the media regarding the issue.

Mihaaru understands that Browns Hotels and Resorts has awarded the development of the four-star hotel to a Chinese firm. While some media have reported it to be CCCC Second Harbour Engineering, the firm currently developing the over-water bridge connecting capital Male with airport island Hulhule, Mihaaru understands the contractor is another Chinese firm.

NPH and Alpha Kinam are yet to release any information on the project.

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