Compensation paid to Noomadi exceeds US$ 55 mln: MP Usham

Villimale' MP Ahmed Usham has revealed that the amount paid by the government in compensation to Noomadi Resorts and Residences exceeds US$ 55 million.

Noomadi Resorts and Residences was contracted to construct 700 housing units under the private villa model on January 20, 2011, and to develop 500 housing units, Police Academy Phase I, and sewerage systems in three islands on May 30, 2013. However, the agreements were terminated by the previous government, claiming that the company had violated the terms of the contract. The company denied the claim.

The termination led to the company filing a claim for US$155 million as compensation, and other arbitration charges at the Permanent Court of Arbitration in The Hague, Netherlands.

However, the current government reached a settlement agreement with the company on August 25 2019. According to the out-of-court settlement, the government will pay the company US$ 55 million as compensation. The first payment of US$ 27.5 million was paid by the government on 5 September 2019. As revealed by Finance Minister Ibrahim Ameer, the remaining half of the total payment has now been paid.

According to MP Usham, who formerly served as the country's Deputy Attorney General, the compensation given to Noomadi does not stop there. While an audit report found that MVR$ 92 million (almost US$ 6 million) paid to the company as advance payment for the construction of MNDF flats in Hulhumale' must be returned back to SIFCO, the settlement agreement included a clause that exempts Noomadi from paying back the amount to SIFCO.

"This means the compensation given to Noomadi exceeds US$ 55 million. MNDF SIFCO project is not related to the arbitration claim filed by Noomadi," said Usham.

When the arbitration case was first filed on December 11, 2017, former housing minister Dr. Mohamed Muizzu took part in the discussions and decisions were made by the state on how to handle the case with the involvement of Dr. Muizzu in the capacity of the government's housing minister.

After the minister lost his position on the government on November 17, 2018, Dr. Muizzu on 14 June 2019 gave a statement as a witness against the state produced by Noomadi in their arbitration claim. His statement against the state contradicted his previous stance on the issue while he was minister.

While Dr. Muizzu had previously given a statement to the arbitration that the Phase I agreement between the government and Noomadi was terminated on former President Abdulla Yameen Abdul Gayyoom's wishes, he later changed his statement to state otherwise. Dr. Muizzu's statement against the government in the arbitration claim had caused additional challenges to the government in defending itself in the claim.

Speaking at the Parliament on Tuesday, Finance Minister Ameer said investigation of the case showed that the former Housing Minister had changed his statement in such a way that weakened the state's defence in the arbitration claim. Ameer further said that the current administration was forced to issue compensation to Noomadi due to the negligence of the previous government . A police case has therefore been filed to investigate the matter, said Ameer.

Minister Ameer said based on the assessments conducted regarding the compensation, the settlement committee formed by the president noted that it was highly likely that the case would have concluded in favour of Noomadi. In the event that the arbitration found the Maldivian government liable, the government would have had to pay a compensation of US$ 154 million and other expenses to Noomadi, said the committee. Therefore, it recommended the government to reach an out-of-court settlement agreement for a lesser amount, and the government had acted accordingly, said the minister.

However, Dr. Muizzu disagrees.

According to the former housing minister, an official who worked at the Housing Ministry during both the previous and the current administration had given statements that damaged the state and benefited Noomadi in the arbitration claim. Dr. Muizzu alleges that said official had intentionally worked since the beginning towards attaining compensation for Noomadi and had orchestrated events to lead to such a situation. However, Dr. Muizzu refrained from revealing the identity of the person.

"An official who worked in both President Yameen's administration and the current administration gave statements that he had withheld during President Yameen's tenure. This is evidence enough that said person had worked towards an out-of-court settlement since the beginning," accused Muizzu.

Muizzu added that according to the original agreement with Noomadi, the only compensation that the government would have had to pay Noomadi was for the investment they had made to develop resort island Lh. Dhiffushimaadhoo leased to the company. The agreement was being terminated as the government had wished to utilize the island for government-purposes, said Muizzu.

However, the statement given by the unnamed state official contradicted that, said Muizzu, who further revealed that the official had claimed that the government was terminating the agreement to lease the island to a foreign investor. This was a blatant lie, said Muizzu.