International hotel chains express interest in Herethere

Four international parties have expressed interest in managing Herethere Island Resort in Addu Atoll, Maldives Tourism Development Corporation (MTDC) has said.MTDC opened the opportunity on February 6, for interested parties to submit proposals before March 9, and there were no local proposals, the company said.

The companies include, Santra Hotels and Resorts of Thailand, Amaary Kalaz and Rhythms of Thailand, Pan Pacific Hotel Group of Singapore and Switzerland’s Mövenpick Hotels and Resorts.Santra Hotels has 30 years of experience with 20 resorts in operation while Amaary currently manages 11 resorts with 45 years of experience in the industry. Pan Pacific Hotels, formerly Hotel Plaza Limited (HPL) has 30 resorts and hotels in operation and Mövenpick runs 90 hotels specializing in first-class service.

MTDC said it would provide opportunities to submit bids, after evaluating the interested parties, according to the Memorandum of Information (MOI). The MOI requires MTDC to complete the evaluation process within seven days and give a 21-day period for submission of bids.“The Directors Board will decide on the eligible bidders after considering the proposals. We shall provide the opportunity to all the eligible parties,” an MTDC official said.According to the tender announcement, the opportunity to submit proposals was open to both local and international parties with a minimum experience of running a four star, 300-bed hotel for five years.

The applicant should be able to procure funds from an international bank and pay a non-refundable deposit of US$ 7-10 million to MTDC, at the time of signing the contract.MTDC also requested the companies to submit supporting documents as proof for their experience, financial situation and availability of funds.

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MTDC completes waterway between Herethere & Hulhudhoo

Maldives Tourism Development Corporation (MTDC) has revealed that a waterway between Herethere Island Resort and Hulhudhoo has been completed on 20 June.
MTDC in a statement issued on Thursday revealed that all associated works such as installing geo textile materials and placing rock boulders and sand bags on the embankment of the waterway has also been completed.

MTDC press release comes at a time when MTDC and Yacht Tours, current lessee of Herathere Resort, are engaged in legal battle in court. Yacht Tours leased out the 546 bed Herethere Resort from MTDC on 1June 2008.

Yacht Tours stopped paying rent in December 2008, claiming MTDC had failed to fulfill contractual obligation to build a waterway between Herethere Resort and Hulhudhoo, an adjoining inhabited island, by 30 November 2008.

MTDC responded by terminating the company’s contract and giving Yacht Tours seven days to hand over the resort.

In response, Yacht Tours lodged a civil case to sue MTDC for US$67 million, which was later reduced to US $ 45million in compensation for the incomplete channel and projected losses.

However, Civil Court ruled against Yacht Tours saying that the court could not establish if the company actually lost the amount.

However, Yacht Tours has again submitted case against MTDC for US$55 million in damages due to the dispute over Herethera Resort. The company claimed the dispute led to a low occupancy level and that tour operators have informed that they would no longer send tourists to the resort.

Yacht Tours sues MTDC for US$55 million

Tourism company Yacht Tours is suing the Maldives Tourism Development Corporation (MTDC) for US$55 million in damages due to the dispute over Herethera (Handhufushi) Resort. Speaking to Minivan News today, Dhiyana Saeed, lawyer for Yacht Tours, said US$10 million was for the losses incurred since the start of the legal dispute. The company claimed the dispute led to a low occupancy level and earlier this month, tour operators announced they would no longer send tourists to the resort. The remainder, said Dhiyana, was for the projected losses, as Yacht Tours entered into a 20-year rental agreement with MTDC last year. “A court ruled that MTDC was in breach of the agreement, therefore that entitles us to damages,” said Dhiyana.

The two companies have been in and out of the courts since January after Yacht Tours refused to pay MTDC rent, claiming the public-owned corporation failed to fulfill its contractual obligation to build a channel between Herethera and neighbouring inhabited island, Hulhudhoo. At the time, MTDC asked Yacht Tours to pay the outstanding rent and hand back the resort.

Yacht Tours responded by filing a claim for US$67 million in damages, which was later reduced to US$45 million. While the court ruled against them, saying they were unable to calculate the proposed projected loss, Dhiyana said Yacht Tours now had two reports to back up their claim: an audit from financial advisory company Ernst & Young and a second from a management consultancy firm, which conducted a financial forecast. “We have asked for a declaration that we don’t have to pay rent or liquidation,” said former attorney general Dhiyana. MTDC Managing Director Mohamed Mihad said the US$55 million “simply” did not make sense to him. “They started with US$67 million, it came down to US$45 million and now another figure has come.” MTDC has three cases lodged against Yacht Tours.

The first is to recover unpaid rent, the second to evict the company from the resort and the third is to recoup money paid by MTDC for insurance and stock. Mihad said MTDC handed over the resort to Yacht Tours last summer with around US$800,000 worth of stock, which was never repaid. Further, insurance for the resort had been paid for by MTDC ever since the takeover. The last court verdict issued in April ordered Yacht Tours to pay the outstanding rent of US$8 million and gave MTDC permission to retrieve the US$10 million bank guarantee. But a second ruling ordered Habib bank, the holder of the guarantee, to withhold the money until further notice.

The MTDC was established as a public enterprise with 55 per cent of its shares sold to the public to encourage the redistribution of tourist profits. The resort, which opened in 2007, was intended to boost the local economy in Addu atoll, considered by many to have been economically neglected by the government. But, hundreds of the local employees have been dismissed due to the resort’s low occupancy levels. The ongoing dispute led to government ministers holding a press conference this month, announcing plans to step in as mediators. Speaking to Minivan News earlier this month, Yacht Tours Chairman Abdulla Jabir said he was willing to settle out of court. Asked whether this was an option, Mihad said he heard Jabir had publicly announced he would be willing to hand over the resort if the bank guarantee was returned. “The board is considering it and we will give a counter offer. It’s not an easy decision to make,” said Mihad.

Related posts:

MTDC urges the Court to acquire the rent despite the court proceedings
MTDC files lawsuit demanding return of Herathera Resort
Yacht Tours to layoff Herathera Resort staff
Yacht Tours dismisses reports that new MTDC director is their employee
Six Days To Surrender Handhufushi: MTDC
MTDC terminates Herethere contract with Yacht Tours
Hulhudhoo Islanders Protest Against Yacht Tours
Handhufushi staff begin strike to protest against delay in getting paid

www.minivannews.com

MTDC urges the Court to acquire the rent despite the court proceedings

MTDC had appealed the Civil Court to issue a court order to attain the amount of the rent for the MTDC’s Herethere Island Resort, rented to Yacht Tours, despite the case lodged by the MTDC against the Yacht Tours. During the Court proceedings Shaaheen Hameed, MTDC’s lawyer said Yacht Tours had failed to pay the rent since December 2008.

He said that the figure for unpaid rent amounts to US $ 7,818,000, and this is causing a great deal of trouble to the financial situation of the MTDC. He also highlighted that the MTDC is a public company. In response the Chairman of the Yacht Tours, Abdulla Jabir said that if the Court issues an order to collect the entire amount of the rent that would be an impossible burden for his company. He therefore, urged not the Court not to issue such an order, instead to settle the issue when the legal proceedings are over.

Yesterday’s proceedings were concluded after announcing that another proceeding would be held very soon. When asked by Miadhu Daily regarding the matter, Jabir said that the argument from his side is said in the proceedings and did not want comment further on the issue. He also said that he is confident that the final ruling will be issued after consideration to what has been said by both sides in the proceedings.

miadhu.com.mv

Hulhudhoo Islanders Protest Against Yacht Tours

Minivan

A large group of Hulhudhoo islanders have said they will protest against Yacht Tours everyday from 4 to 6.30pm until there is a change of management at Handhufushi (Herethere) Resort.

Islanders have been protesting on one side of a channel which separates Hulhudhoo from the resort since Friday, using megaphones and loud speakers to convey their anger.

Ahmed Asleem, a member of the Hulhudhoo island development committee and one of the organisers of the demonstration, said several hundred islanders were protesting “for the rights of workers, the rights of business people in Addu and the rights of tourists”.

But Abdullah Jabir, the chairman of Yacht Tours, which currently manages Handhufushi Resort, has said those protesting are ex-employees of the resort who were dismissed for drug abuse.

The resort has recently been in the media spotlight after Maldives Tourism Development Corporation (MTDC) said it would terminate Yacht Tours’ contract for the resort in three days for non-payment of rent.

MTDC terminates Herethere contract with Yacht Tours

Haveeru

The Maldives Tourism Development Corporation (MTDC) on Wednesday terminated the contract made to lease Addu atoll Herethere (Handhufushi) to Yacht Tours and gave the company seven days to handover the resort.

At a news conference held at Dharubaaruge on Wednesday, MTDC officials said that the decision had been made by the new Board of Directors.

“Today we have notified them by letter of the termination of the contract,” the MTDC’s lawyer Shaheen Hameed said.

Shaheen also said that if the company does not handover the resort before the deadline then the matter will be taken to Court. He said that even though Yacht Tours had filed a claim for compensation, it was the company that had breached the agreement and that there was no money that the MTDC had to pay.

A statement issued by the MTDC said that the newly comprised Board of Directors of MTDC had at Tuesday’s meeting given top priority to the issue of Yacht Tours not paying the rent due and what to do after the notice period issued last month had expired. The notice issued to Yacht Tours states that the contract agreement would be terminated if the rent was not paid by Tuesday. The MTDC’s statement said that six of the seven members had voted to go ahead as per the notice.

Speaking at the news conference, the MTDC’s Managing Director Mohamed Mihad said that the MTDC had kept their part of the agreement and fulfilled all the contractual obligations.

“The only thing that remained for the MTDC to do before 30th November 2008 was the creation of the channel,” Mihad said. “It was done on schedule.”

He also said that the Board had decided to terminate the contract because they did not feel it was a good idea to decrease rent as Yacht Tours had proposed and that it was in the best interests of the shareholders too.

Six Days To Surrender Handhufushi: MTDC

Minivan

The public-owned Maldives Tourism Development Corporation (MTDC) has given Yacht Tours six days to hand over Handhufushi Resort or face legal action.

The warning follows a 30-day notice period issued to Yacht Tours after the company failed to pay this quarter’s rent for the resort.

Abdullah Jabir, the chairman of Yacht Tours, has said his company withheld the rent because the MTDC had failed to fulfil its contractual obligations, chiefly, the construction of a waterway in the resort.

Yacht Tours filed a case two days ago to sue the MTDC for US$67 million – the projected loss of revenue if their 20-year contract for Handhufushi Resort is terminated by MTDC.

Bone of contention

Jabir has accused MTDC of not “honouring its part of the deal”, which included the creation of channel between the islands of Herethere and Hulhudhoo.

Speaking at a press conference on Tuesday, he said the construction of the waterway had not been completed.

Both the unfinished channel and the presence of machinery, he continued, had adversely affected the occupancy level of the resort which had led to a huge financial loss.

In addition, Yacht Tours had spent US$22 million on making the necessary improvements to the resort, including the creation of a new beach, landscaping and seaweed removal.

But according to Ahmed Shareef, one of the MTDC’s directors, the agreement stated the waterway would be completed by 30 November 2008 and this had been achieved.

“We have completed building the channel by this date. Now the banks are being done.”

He added the presence of vehicles and equipment was also due to other work being carried out on the island by the same contractor.

The negotiating table

Failure to reach an amicable agreement, said Jabir, had forced him to turn to the courts to resolve the matter. But, he said, he was still open to negotiation.

Previously, Jabir had asked the MTDC for a rent decrease to compensate for the incomplete waterway and to offset the effects of the global economic crisis.

He had also offered to buy the resort from the MTDC in order to make the money spent on improvements a worthwhile investment.

Jabir added the decision made by the board of directors on Monday was contrary to government policy.

President Mohamed Nasheed recently decided to allow resorts still under development to defer rent payments for a year because of the international financial meltdown.

Mohamed Zuhair, press secretary at the president’s office, has said the president will do “everything to alleviate” the dispute between Yacht Tours and the MTDC.

He added Nasheed was “addressing the larger issue of 67 resorts being developed” in order to help those facing financial difficulties.

“It’s nothing personal”

But Mohamed Mihad, managing director of MTDC, has said the corporation is not willing to negotiate as sufficient notice to pay the rent had already been given to Yacht Tours.

He added Yacht Tours would forfeit the US$10 million bank guarantee provided to secure their bid for the resort.

According to Mihad, the guarantee was obtained during the bidding process to safeguard the interests of the MTDC.

Another of the board members, Ibrahim Saleem, said the company had held a board meeting on Tuesday and had agreed not to extend the notice period.

“It’s nothing personal,” he said. “Herethere Resort (Handhufushi Resort) is the only one of our ventures that is currently generating money, so we can’t afford to lose it.

“We negotiated and gave them 30 days to pay the outstanding rent. But today we have given them six days notice to hand the island back. It is in the interest of shareholders.”

The MTDC was established as a public enterprise with 55 per cent of its shares sold to the public to encourage the redistribution of tourist profits.

At present, it is developing 8 resorts as joint ventures and one, Uligamu, is a solo project.

The future for Addu

The opening of Handhufushi Resort, previously called Herethera, in 2007 was seen as a boon to Addu Atoll which was widely viewed as economically neglected by the government.

It promised to boost the local economy with hundreds of jobs guaranteed for locals.

In recent months, employees at the resort have gone on strike in order to protest against non-payment of wages by Yacht Tours. Ibrahim Rasheed, general manager at the resort, has denied these claims.

At the press conference, Jabir said the MTDC had orchestrated the protests and rejected rumours that disgruntled Adduans were planning to occupy the island on Friday, saying, he had “the best interest of Adduans at heart”.

Mihad has ensured staff will not be affected by the dispute. MTDC board member Ahmed Shareef added, “Nothing will be affected, none of the staff jobs or the bookings. Everything will go smoothly. Think of this only as a change of management.”

The lawyer for MTDC has said the company would now bring in auditors to evaluate the buildings and the equipment. “If Yacht Tours does not hand over,” he said, “we will take action according to the law.”

Yacht Tours dismisses reports that new MTDC director is their employee

Miadhu

Yacht Tours has dismissed reports that Abdul Ghafoor who was recently appointed to the Maldives Tourism Development Corporation Board of Directors is the Deputy Director of the Company. The press release by the company says that Ghafoor is not an employee of the company as he had resigned last December.

The press release says that the cover story run by Aafathis News that the Deputy Director of Yacht Tours had been included in the MTDC Board of Directors, is untrue. The press release also stated that the article published on Haveeru News on 11th January stating words said by Special Advisor to the President Dr. Hassan Saeedh had been written whilst the Journalist who wrote the article and Dr. Hassan Saeedh were unaware of the facts" said the press release by the company.

Yacht Tours is owned by business tycoon Abdulla Jabir who is deputy leader of Jumhoory Party, which makes up part of the ruling coalition. The Handhufushi Resort (formerly known as Herethere') is being leased to Yacht Tours by MTDC.

Handhufushi staff begin strike to protest against delay in getting paid

Haveeru

The staff of Handhufushi Resort, managed by Yacht Tours, went on strike on Wednesday to protest against delays in receiving their wages.

The resort workers began their strike around 7:30am yesterday, saying that that had not received their salaries and bonus allowance money. They said that they would continue their strike until they received the payments.

Gathered in front of the Human Resource Department office, the staff members called for the resignation of the senior officials of the resort management and for their salaries to be given to them as soon as possible. There are reports that some of the foreign employees working at the resort are also taking part in the strike.

“We were forced to go on strike not only due to the delay in getting paid, but because we have no idea when or if we’ll even get paid,” an employee from the resort told Haveeru on condition of anonymity. “It’s not just last month’s salary we have not received; we haven’t received the bonus allowance money for the last three months either. There are even some foreign employees who haven’t received their salaries and bonus money for the last two months.”

The employees said yesterday that officials from the Human Resource Department of the resort had met with them to discuss the matter and assure them that the payments will be made within the day. They had also requested the staff to return to work.

According to reports there are currently 200 or so tourists staying at the resort.

“We can’t believe it even if they say that the salaries will be deposited before the banks close today,” another employee on strike said. “They have been saying that over and over but it never happens. This time we have decided not to end the strike before we get paid. Either that or they give us in writing a date and time when the payments will be made. In truth it’s really difficult for us that this has happened. Only a few days remain for the schools to open. How can we buy the school supplies for the children if we aren’t paid?”

The Tourism Employee Association of Maldives (TEAM) has said that they had received numerous complaints from the employees of the resort regarding the resort administration ever since Yacht Tours took over the management of the resort.

The management of the resort has however denied that there are any delays in paying their employees and insisted that they had always made all the payments, including the Rf1000 bonus, on time even during when the MTDC had managed the resort. The General Manager of the resort, Ibrahim Rasheed, said that they try very hard to ensure that their employees were paid as soon as possible.