“Major losses” to Maldives under President Yameen's Regime !!!

State of Maldives has been ordered to pay USD 15 million in damages to Malaysian company Nexbis by Singapore International Arbitration Center (SIAC) over dissolution of contract between Nexbis and Maldives Immigration to build a border control system in Maldives.

Nexbis, a Malaysian-based venture that was contracted to manage the border control system (BCS) of the atoll state.

In successive months, two foreign companies have been paid compensation for abrupt cancellation of contracts by President Yameen's government, citing various reasons. First it was GMR, an Indian infrastructure company, that was awarded a project to upgrade and manage Ibrahim Nasir International Airport; and then it was Nexbis, a Malaysian-based venture that was contracted to manage the border control system (BCS) of the atoll state.

Now what puzzles a common man of Maldives are: What reasons were cited by the Maldivian government for the ouster? How many of them were genuine and how many of them were motivated – politically, economically ? What were the actual reasons behind the ouster and what are the consequences?

Overall, three broad reasons were offered by the government of Maldives to oust either of the companies. The first issue was on the transparency of the contract. The official government record states that the contract “was signed under dubious conditions”. However, the fact of the matter is that the contract was awarded through an international bidding process overseen by the International Finance Corporation (IFC). The matter of fact is that the project followed international best practices at each step of the bidding process to ensure the highest degree of competitiveness, transparency and credibility of the process.

The second reason cited was that the contracts were “illegal”. The IFC has contended this by observing that the contracts “complied with Maldivian laws and regulations”. The Maldivian Attorney General in his legal opinion clearly stated that the contracts agreements “do not violate any provision of the Constitution of the Republic of Maldives or any law regulation, rule or decree...”

The third reason was that the projects were “against the national interest” of the Maldives. It is highly unlikely that the abrogation of the contract served any national interest of the Maldives.  Significantly, when the projects got underway, it had become some of the biggest FDI into the Maldives; that too, at the time when Maldives' economic is going downspiral.

The move has also sent negative signals to prospective investors in the Island; in addition to creating jitters and uncertainty amongst the present ones. As reasons offered for the termination of the contract appear unimpressive, one tends to look for actual motivations. In the process, one cannot miss local political and electoral factors.

US$271 million  to GMR, $15 million to Nexbiz,a few more cases pending, $72 million stolen...remaining islands given without bidding...is there anything left?