bidding documents for the development of picnic islands

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TABLE OF CONTENTS

SECTION I - INVITATION FOR BIDS (IFB) ................................................................................................. 3

SECTION II - INSTRUCTIONS TO BIDDERS (ITB) .................................................................................... 6 A. INTRODUCTION .............................................................................................................................................. 7

1. Background................................................................................................................................................ 7 2. Eligible Bidders ......................................................................................................................................... 7 3. Cost of Bidding .......................................................................................................................................... 7

B. THE BIDDING DOCUMENTS ............................................................................................................................ 8 4. Contents of Bidding Documents ................................................................................................................ 8 5. Clarification of Bidding Documents .......................................................................................................... 8 6. Amendments of Bidding Documents .......................................................................................................... 8

C. PREPARATION OF BIDS ................................................................................................................................... 9 7. Language of Bid ........................................................................................................................................ 9 8. Documents Comprising the Bid ................................................................................................................. 9 9. Bid Form.................................................................................................................................................... 9 10. Bid Currency............................................................................................................................................ 9 11. Bank Guarantee or Letter of Commitment............................................................................................... 9 12. Period of Validity of Bids ...................................................................................................................... 10 13. Format and Signing of Bid .................................................................................................................... 10

D. SUBMISSION OF BIDS.................................................................................................................................... 10 14. Sealing and Marking of Bids ................................................................................................................. 10 15. Deadline for Submission of Bids............................................................................................................ 11 16. Late Bids................................................................................................................................................ 11 17. Modification and Withdrawal of Bids.................................................................................................... 11

E. OPENING AND EVALUATION OF BIDS ............................................................................................................ 12 18. Opening of Bids by the Government ...................................................................................................... 12 19. Clarification of Bids .............................................................................................................................. 12 20. Preliminary Examination....................................................................................................................... 12 21. Evaluation and Comparison of Bids...................................................................................................... 13 22. Domestic Preference.............................................................................................................................. 13 23. Contacting the Government................................................................................................................... 14

F. AWARD OF CONTRACT ................................................................................................................................. 14 24. Post Qualification.................................................................................................................................. 14 25. Award Criteria....................................................................................................................................... 14 26. Government’s Right to Accept any Bid and to Reject any or All Bids................................................... 14 27. Notification of Award ............................................................................................................................ 15 28. Performance Security ............................................................................................................................ 15 29. Signing of Contract................................................................................................................................ 15 30. Detailed Drawings................................................................................................................................. 15

ANNEX I – GUIDELINES FOR THE PROJECT PROPOSAL/FEASIBILITY STUDY.......................... 17 A. Development Concept and Built Environment ........................................................................................ 18 B. Environmental Aspects............................................................................................................................ 18 C. Work Plan ............................................................................................................................................... 18 D. Business Plan.......................................................................................................................................... 19

ANNEX II - SAMPLE FORMS........................................................................................................................ 22 1. Bid Form and Rent Schedule ................................................................................................................... 23 2a. Bank Guarantee..................................................................................................................................... 24 2b. Letter of Commitment ............................................................................................................................ 25 3. Performance Security .............................................................................................................................. 26 4. Documentary Evidence of Person or Legal Entity .................................................................................. 28 5. Format of Work Plan ............................................................................................................................... 30

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ANNEX III - DRAFT LEASE AGREEMENT................................................................................................ 31 Definitions ................................................................................................................................................... 32 Additional Documents that are Part of the Agreement................................................................................ 33 Commencement and Duration of this Agreement ........................................................................................ 33 Standards..................................................................................................................................................... 34 Performance Security .................................................................................................................................. 34 Detailed Drawings....................................................................................................................................... 34 Inspection .................................................................................................................................................... 35 Change Orders ............................................................................................................................................ 36 Delays in the Lessee’s Performance ............................................................................................................ 36 Liquidated Damages................................................................................................................................... 36 Inventory...................................................................................................................................................... 37 Taxes and Other Dues ................................................................................................................................. 37 Physical Environment of the Picnic Island .................................................................................................. 37 Employment in the Picnic Island.................................................................................................................. 37 Rent.............................................................................................................................................................. 37 Redevelopment and Improvement................................................................................................................ 38 Insurance ..................................................................................................................................................... 40 Inspection .................................................................................................................................................... 40 Grants of Rights, Interest or Possession...................................................................................................... 40 Termination by the Lessor ........................................................................................................................... 41 Termination by the Lessee ........................................................................................................................... 42 Breach of non-financial nature.................................................................................................................... 42 Provision for Impossibility of Performance................................................................................................. 43 Emergency and Public Purposes ................................................................................................................. 44 Notices ......................................................................................................................................................... 44 Settlement of Disputes.................................................................................................................................. 45 Variation and Discharge of Agreement ....................................................................................................... 45 Governing Law ............................................................................................................................................ 46

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Section I - Invitation For Bids (IFB)

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Invitation for Bids

Date: 30 December 2003 IFB No: MT/TMP2/PIC/01/2003

1. The Government of Maldives, represented by Ministry of Tourism, has announced the

development of the following islands, as picnic islands.

1) Felidhe Atoll Anbaraa 2) Felidhe Atoll Kunavashi 3) South Nilandhe Atoll Faandhoo 4) South Malhosmadulu Voavah

2. The Ministry of Tourism now invites sealed bids from eligible bidders for the

development of the above islands as picnic islands. 3. Period of Lease

Island will be leased for a period of twenty one (21) years.

4. Interested eligible bidders may obtain further information from and inspect the bidding documents at the office of:

Ministry of Tourism Ghazee Building Male’, Republic of Maldives Telephone: (960) 32 3224

Facsimile: (960) 322512 5. A complete set of bidding documents may be purchased, from 31st December 2003,

by interested bidders on submission of a written application to the above address and upon making a payment as follows. The purchase price for foreign bidders will be US$ 500 (Five Hundred United States Dollars) which will include the cost of courier mailing. Maldivian bidders or companies registered in the Republic of Maldives wishing to collect the documents shall pay Rf. 5,000 (Five Thousand Rufiyaa), as the purchase price.

6. The bidding documents are non-transferable and for each island a separate set of

bidding documents have to be purchased.

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7. A pre-bid meeting will be held at 1200 hrs on Thursday, 15th January 2004. 8. Bids must be delivered to the above office on or before 1200 hrs on Thursday,

1stApril 2004. 9. Bids will be opened in the presence of bidders’ representatives who choose to attend

at 1200 hrs on Thursday, 1st April 2004 at the office of the Ministry of Tourism or at any other venue that the Ministry may announce.

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Section II - Instructions to Bidders (ITB)

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Instructions to Bidders

A. Introduction

1. Background 1.1 The Government of Maldives, represented by Ministry of Tourism, has announced the

development of four designated islands, in Felidhe Atoll, South Nilandhe Atoll, and South Malhosmadulu Atoll, as picnic islands.

2. Eligible Bidders 2.1 This Invitation for Bids is open to individuals, partnerships and companies, local and

foreign. 2.2 Bidders, in preparation of their bids, should not be associated, directly or indirectly,

with an employee of the Ministry of Tourism. All bidders should complete the non association clause in the Bid form.

2.3 The bidders are required;

(a) if Maldivian, to produce a signed declaration stating that they have no continuing decreed debt, have not been convicted of theft, fraud and/or embezzlement during the last five years. In case of companies and partnerships, separate declarations should be submitted for the company, partners, directors, and shareholders of private limited companies.

(b) if foreign, to submit a police clearance report from the home country of the bidder

and in case of companies/partnerships it should be for the company, partners, directors and for the shareholders of private limited companies.

(c) For both 2.3 (a) and (b), foreign partners, directors and shareholders should

submit police clearance reports separately, and Maldivian partners, directors and shareholders are required to submit personal declarations separately.

3. Cost of Bidding 3.1 The bidder shall bear all costs associated with the preparation and submission of its

bid, and the Government of Maldives will in no case be responsible or liable for those costs, regardless of the conduct or outcome of the bidding process. However, upon submission of the bid to the Ministry of Tourism, the bid will become the absolute property of the Government, and the bidder will not have any right whatsoever to claim back any of the documentation or material comprising its bid.

3.2 The bidder shall purchase a set of bidding documents for the bid that they may wish to

submit. The bidding documents purchased cannot be transferred to another party.

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B. The Bidding Documents

4. Contents of Bidding Documents 4.1 The contract terms are prescribed in the bidding documents. In addition to the

Invitation for Bids, the bidding documents include:

a) Instructions to Bidders (ITB) b) Guidelines on project proposal / feasibility study c) Bid Form and Rent Schedule (sample form) d) Bank Guarantee / Letter of Commitment (sample form) e) Performance Security (sample form) f) Documentary Evidence of Person or Legal Entity (sample form) g) Format of the Work Plan h) Draft Lease Agreement

4.2 The bidder is expected to examine all instructions, forms, terms and specifications in

the bidding documents. Failure to furnish all information required by the bidding documents or to submit a bid not substantially responsive to the bidding documents in every respect will be at the Bidder’s risk and may result in the rejection of its bid.

5. Clarification of Bidding Documents 5.1 A prospective bidder requiring any clarification of the bidding documents may notify

the Ministry of Tourism in writing at the address indicated in IFB Clause 4. 5.2 Prospective bidders should submit requests for clarification at least fifteen (15) days

prior to bid closing date specified in ITB Clause 15.1.

6. Amendments of Bidding Documents 6.1 At any time prior to the deadline for submission of bids, the Government, for any

reason, whether at its own initiative or in response to a clarification requested by a prospective bidder, may modify the bidding documents by amendment.

6.2 All prospective bidders that have received the bidding documents will be notified of

the amendment in writing and shall bid in accordance with the amendments issued. 6.3 In order to allow prospective bidders reasonable time in which to take the amendment into account in preparing their bids, the Government, at its discretion, may extend the deadline for the submission of bids.

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C. Preparation of Bids

7. Language of Bid 7.1 The bid prepared by the bidder, as well as all correspondence and documents relating

to the bid exchanged by the Bidder and the Government, shall be written in the English language, provided that any printed literature furnished by the bidder may be written in another language so long as accompanied by an English translation of its pertinent passage(s), in which case, for purpose of interpretation of the bid, the English translation shall prevail.

8. Documents Comprising the Bid 8.1 The bid prepared by the bidder shall comprise the following:

a) Bid Form and Rent Schedule in accordance with Annex II, Form 1. b) Documentary evidence (Power of Attorney) stating that the person signing the bid

has been duly authorized to bind the bidder to Agreement, if the bid is submitted by a company, partnership or any other legal entity.

c) Documentary evidence of the person or legal entity in accordance with Annex II, Form 4.

d) Documentary evidence of bidder’s eligibility in accordance with ITB Clause 2.3 e) Bank Guarantee/Letter of Commitment furnished in accordance with Annex II,

Form 2. f) Project Proposal/Feasibility Study g) A Work Plan in the format specified in Annex II, Form 5.

9. Bid Form 9.1 The bidder shall complete and submit the Bid Form and other documents in ITB

Clause 8.

10. Bid Currency 10.1 The bid currency is United States Dollar.

11. Bank Guarantee or Letter of Commitment 11.1 The bidder shall submit a Bank Guarantee or a Letter of Commitment for 2.5% of the

total investment proposed by the bidder, issued by a reputable financial institution acceptable to the Government, in the form provided in the bidding documents, or another form acceptable to the Government, and valid for thirty (30) days beyond bid validity. Bank Guarantees and Letters of Commitment issued by foreign financial institutions should be duly notarized.

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11.2 Any bid not accompanied by a Bank Guarantee or Letter of Commitment in accordance with ITB Clause 11.1 will be rejected by the Government as non responsive. Unsuccessful bidders’ Bank Guarantee/Letter of Commitment will be discharged or returned as promptly as possible but not later than thirty (30) days after the expiration of the period of validity prescribed in ITB Clause 12.1.

11.3 The successful bidder’s Bank Guarantee or Letter of Commitment will be discharged

upon the bidder signing the contract and furnishing the Performance Security pursuant to ITB Clause 28.

12. Period of Validity of Bids 12.1 Bids shall remain valid for a period of sixty (60) days after the date of bid opening

prescribed in IFB Clause 9. 12.2 In exceptional circumstances, the Government may solicit the bidder’s consent to an

extension of the period of validity. The request and the responses thereto shall be made in writing. A bidder granting the request will not be required nor permitted to modify its bid.

13. Format and Signing of Bid 13.1 The bidder shall prepare an original and 3 copies of the bid clearly marking each

“ORIGINAL” and “COPY” as appropriate. In the event of any discrepancy between them, the original shall govern.

13.2 The original and copies of the bid shall be typed or written in indelible ink and shall

be signed by the bidder or a person or persons duly authorized to bind the bidder to the contract. All pages of the bid, except for unamended printed literature, shall contain the bid serial number, and shall be initialed by the person or persons signing the bid.

13.3 Any interlineations, erasures or overwriting shall be valid only if they are initialed by

the person or persons signing the bid.

D. Submission of Bids

14. Sealing and Marking of Bids 14.1 The Bidder shall bind all pages of the bid in one or more volumes, seal the original

and each copy of the bid in separate envelopes, duly marking the envelopes as “ORIGINAL” and “COPY”. The envelopes shall then be sealed in an outer envelope.

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14.2 The inner and outer envelopes shall: a) be addressed to the Ministry of Tourism at the address given in IFB Clause 4. b) bear the name “Bid for the development of (name of the island), (name of the

atoll) as a Picnic Island”, and the statement; “DO NOT OPEN BEFORE [time], [date]”.

14.3 The inner envelopes shall also indicate the name and address of the Bidder to enable

the bid to be returned unopened in case it is declared “late”. 14.4 If the outer envelope is not sealed and marked as required by ITB Clause 14.2, the

Government will assume no responsibility for the bid’s misplacement or premature opening.

15. Deadline for Submission of Bids 15.1 Bids must be received by the Government at the address specified under IFB Clause 4

no later than the time and date specified in IFB Clause 8. 15.2 The Government may, at its discretion, extend this deadline for the submission of bids

by amending the bidding documents in accordance with ITB Clause 6, in which case all rights and obligations of the Government and bidders previously subject to the deadline will thereafter be subject to the deadline as extended.

16. Late Bids 16.1 Any bid received by the Government after the deadline for submission of bids

prescribed in IFB Clause 8 will be rejected and returned unopened to the bidder.

17. Modification and Withdrawal of Bids 17.1 The Bidder may modify or withdraw its bid after the bid’s submission provided that

written notice of the modification, including substitution or withdrawal of the bids, is received by the Ministry of Tourism prior to the deadline prescribed for submission of bid in IFB Clause 8.

17.2 The bidder’s modification or withdrawal notice shall be prepared, sealed, marked and

dispatched in accordance with ITB Clause 14.2. 17.3 No bid shall be modified after the deadline for submission of bids.

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E. Opening and Evaluation of Bids

18. Opening of Bids by the Government 18.1 The Government will open all bids in the presence of bidders or their representatives

who choose to attend, at the time, on the date and at the place specified in IFB Clause 9. The bidders’ representatives who are present shall sign a register evidencing their attendance.

18.2 The bidders’ names, bid modifications or withdrawals, rent, bank guarantee and such

other details as the Government, at its discretion, may consider appropriate, will be announced at the opening. No bid shall be rejected at bid opening, except for late bids, which shall be returned unopened to the bidder pursuant to ITB Clause 16.1.

18.3 Bids (and modifications sent pursuant to ITB Clause 17) that are not opened and read

out at bid opening shall not be considered further for evaluation, irrespective of the circumstances. Withdrawn bids will be returned unopened to the bidders.

18.4 The Government will prepare minutes of the bid opening.

19. Clarification of Bids 19.1 During evaluation of the bids, the Government may, at its discretion, ask the Bidder

for a clarification of its bid. The request for clarification and the response shall be in writing, and no change in the rent or substance of the bid shall be sought, offered or permitted.

20. Preliminary Examination 20.1 The Government will examine the bids to determine whether they are complete,

whether any computational errors have been made, whether the required Bank Guarantee/Letter of Commitment has been furnished, whether the documents have been properly signed, and the bids are generally in order.

20.2 Arithmetical errors will be rectified on the following basis. If there is a discrepancy

between the unit value and the total value that is obtained by multiplying the unit value and the variable, the unit value shall prevail and the total value shall be corrected. If there is a discrepancy between words and figures, the amount in words will prevail.

20.3 The Government may waive any minor informality, nonconformity or irregularity in a

bid which does not constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of any bidder. Failure to submit or incorrect/incomplete submission of any one or more of the following documents/aspects prescribed in the bidding documents shall be considered as a material deviation.

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• Evidence of eligibility • Power of Attorney • Bid Form and Rent Schedule • Evidence of legal entity/entities • Currency of bid • Bank Guarantee / Letter of Commitment • Project proposal / feasibility study • Company profile/ Business profile • Audited financial statements • Format and signing of bid • Sealing and marking of bid • Workplan

20.4 Prior to the detailed evaluation, pursuant to ITB Clause 21, the Government will

determine the substantial responsiveness of each bid to the bidding documents. For purposes of these Clauses, a substantially responsive bid is one which conforms to all the terms and conditions of the bidding documents without material deviations.

20.5 Deficiencies in any one of the above requirements shall be grounds for rejection by

the Government, and the bid shall not subsequently be made responsive by the bidder by correction of the nonconformity.

21. Evaluation and Comparison of Bids 21.1 The Government will evaluate and compare the bids which have been determined to

be substantially responsive, pursuant to ITB Clause 20. 21.2 The Government’s evaluation of a bid will exclude and not take into account any

additional documentation or information other than those specifically requested in the Bidding Documents.

21.3 The following merit point system for weighing evaluation factors shall be applied.

Rent 40 Concept 20 Environmental aspects 20 Business Plan 20 Total 100

21.4 The bid scoring the highest merit points subject to ITB Clause 22.1 will be

determined as the highest evaluated bid.

22. Domestic Preference 22.1 For each Maldivian bidder, the Government will grant 10% of the total points scored

pursuant to ITB Clause 21.3. In the comparison of evaluated bids the Government will grant first preference to Maldivian bidders followed by joint ventures between

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Maldivian and foreigners and foreign bidders, respectively, where the bidders have scored equal points pursuant to ITB Clause 21 and 22.

23. Contacting the Government 23.1 Subject to ITB Clause 19, no bidder shall contact the Government or any of its

employees on any matter relating to its bid, from the time of the bid opening to the time the contract is awarded.

23.2 Any effort by a bidder to influence the Government in its decisions on bid evaluation,

bid comparison, or contract award may result in the rejection of the bidder’s bid.

F. Award of Contract

24. Post Qualification 24.1 In the absence of pre-qualification, the Government will determine to its satisfaction

whether the bidder that is selected, as having submitted the highest evaluated responsive bid, is qualified to perform the contract satisfactorily, on the basis of the documents submitted by the bidder and such other information deemed necessary and appropriate by the Government.

24.2 In determining whether the highest evaluated bidder is qualified to perform the

contract satisfactorily, the Government will assess the technical and financial capability of the bidder.

24.3 If the highest evaluated responsive bid is determined to be substandard and

unrealistic, the Government reserves the right to reject the bid. 24.4 An affirmative determination will be a prerequisite for award of the contract to the

bidder. A negative determination will result in rejection of the bidder’s bid.

25. Award Criteria 25.1 Subject to ITB Clause 26, the Government will award contract to the successful

bidder whose bid has been determined to be substantially responsive and has been determined to be the highest evaluated bid, provided further that the bidder is determined to be qualified to perform the contract satisfactorily.

26. Government’s Right to Accept any Bid and to Reject any or All Bids 26.1 The Government reserves the right to accept or reject any bid and to annul the bidding

process and reject all bids at any time prior to contract award, without thereby incurring any liability to the affected bidder(s) or any obligation to inform the affected bidder(s) of the grounds for the Government’s action.

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27. Notification of Award 27.1 Prior to the expiration of the period of bid validity, the Government will notify the

successful bidder in writing, that its bid has been accepted. 27.2 Upon the successful bidder’s furnishing of the Performance Security pursuant to ITB

Clause 28, the Government will promptly notify each unsuccessful bidder and will discharge the Bank Guarantee/Letter of Commitment, pursuant to ITB Clause 11.2.

28. Performance Security 28.1 Within thirty (30) days of the receipt of notification of award from the Government

and prior to signing of the Lease Agreement, the successful bidder shall furnish the Performance Security in accordance with the Lease Agreement in the format in the Performance Security Form provided in the bidding documents, or in another form acceptable to the Government.

28.2 Failure of the successful bidder to comply with the requirement of Clause 28.1 or

Clause 29.2 shall constitute sufficient grounds for the annulment of the award.

29. Signing of Contract 29.1 At the same time as the Government notifies the successful bidder that its bid has

been accepted, the Government will send the bidder the Draft Lease Agreement provided in the bidding documents, incorporating all agreements between the parties, and effecting the necessary and appropriate changes to the Draft Lease Agreement.

29.2 Within thirty (30) days of notification, the successful bidder shall sign the Agreement.

30. Detailed Drawings 30.1 Within ninety (90) days of Notification of Award, the successful bidder shall submit the

following for approval:

1) Detail drawings covering the following, for the structures proposed

a) a map of the island/part of the island showing reef line, high tide line & bush line;

b) architectural detail drawings (scale not less than 1:100) with technical specifications;

i) site and layout plans showing the total site area, built up area, open area and percentage, break water, building lines, sewer mains, electricity, water supply, navigational aids, fire fighting and drainage;

ii) floor plans with furniture and machinery layout; iii) sections with finishes; iv) roof plans;

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v) elevations; and vi) other architectural details such as handrails to describe the

structure. c) structural detail drawings (scale not less than 1:100) with technical

specifications; i) foundation details; ii) roof details; iii) flooring and supporting structural details; iv) cross sectional drawings of all facilities, break water; and v) other structural details to describe the structures

d) building services drawings with technical specifications;

i) electrical layouts; ii) plumbing layouts; iii) fuel and water distribution network; iv) fire fighting details; and v) other mechanical and information technology network details.

2) Details of power generation and distribution including single line diagram of engine control and distribution panels and networks; 3) Details of water supply and sewage systems including distribution network diagrams;

4) Details of garbage collection and waste disposal system;

5) Bill of Quantities and list of materials; and

6) Environmental Impact Assessment Report.

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Annex I – Guidelines for the Project Proposal/Feasibility Study

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Guidelines for the Project Proposal/Feasibility Study These basic requirements outlined below are provided to assist and guide bidders in the preparation of the project proposal and feasibility study. Therefore, bidders are not required to cover all aspects specified in these guidelines, as many of the areas covered herewith may not be required or undertaken to make the project environmentally more friendly and/or because of the smallness of islands. It is not the extent of development undertaken on the island that is important but the concept.

A. Development Concept and Built Environment A detailed description of the development concept of the island to include the natural and built environment, along with the physical facilities and services. Supporting drawings should include: i) site plan of the island/part of island, showing location and orientation of all buildings

and structures, and should be to scale of not less than 1:1000. ii) fully annotated drawings of all buildings showing the layout of furniture, equipment and

machinery, to a scale of not less than 1:100 iii) bird’s eye view of the island depicting the proposed facilities in the site plan; iv) concept design of public areas and facilities proposed v) concept design of staff facilities, if any vi) concept design for break water and other protective structures, if any vii) area programme, giving quantitative analysis of area utilization and costs for the

proposed island and other facilities.

B. Environmental Aspects This section should cover the following areas: i) environmental conditions of the site ii) solid waste, sewage and waste water disposal plan iii) method of sewage and waste water disposal; iv) method of garbage collection and disposal; v) general description of what would be done to conserve the flora and fauna; vi) landscaping concept – whether soil and plants will be imported, type of fertilizer to be

used (organic or in-organic), pest control methods, etc. vii) measures taken to minimize the adverse effects of development (breakwater and access

channel construction) and any other conservation or mitigation measures.

C. Work Plan A detail work plan should be submitted as per Annex II, Form 5 of the Bidding Documents.

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D. Business Plan The business plan should cover the following sections: 1. The management team – should include the following:

Brief description of the professional qualification of key personnel during construction and operation.

2. Marketing Plan – should include the following:

i) internal and external situation analysis; ii) market analysis/projections; iii) competition analysis; iv) marketing and profitability goals/objectives; and v) marketing plan/strategy implementation programmes.

Any contacts/arrangements made with professional associations/organizations should be elaborated. 3. Proforma Financial Statements – should include the following:

i) Details of capital investment should include the following:

a) Details of the capital of the project analysed between facilities, civil works, machinery, equipment, furniture and fittings, landscaping, and transportation.

b) Details of the capital cost of the project analysed between hard costs (buildings, machinery, furniture and fittings etc.) and soft costs (legal, architectural, financing, insurance, taxes during construction, pre-operating expenses etc.)

c) Details of the accounting treatment and estimates of the costs of pre- operating expenses;

d) Estimates of the useful economic lives and applicable depreciation rates of the project assets as per the analysis in (a) above;

e) Estimates of capital replacement costs of the project assets over the initial five-year period and any other planned additional capital expenditure during this period; and

ii) Detailed estimates of operating costs – should include lease rent, wages, benefits,

training costs, administrative costs, food costs, housekeeping, fuel transport/transfer cost, marketing, insurance and interest expense.

iii) Projected financial statements to include:

a) proforma profit and loss statement; b) proforma balance sheet c) proforma cash flow statement

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iv) List of Financial ratios – to include the following: a) internal rate of return; b) net present value; c) cash payback period; d) gearing and/or debt:equity ratio; e) return on assets; f) return on average capital employed; g) return on investment; h) operating profit percentage; and i) interest coverage ratio.

v) List of Assumptions – to include the following: a) Island utilisation assumptions on a month by month basis over the first five

years of operation segregated into high and low season. b) direct margin (excluding labour cost) on the sale of services c) proposed rate for island/ harbour utilization; d) proposed transport/transfer charges, if any e) gross revenue in per person per day terms from sale of services. f) other gross revenue sources e.g. shops; g) annual rate of inflation/discount rate.

vi) Financing Plan and Capital Structure – should include the following:

a) proposed share capital and loan financing; b) proposed investors/parent company including documentary evidence of their

long term viability and proof of their willingness and ability to invest; c) loan finance schedule, including details of the repayment period, interest rate

and estimated related fees (i.e. arrangement fee, guarantee fee etc.).

vii) Staffing – should include the following: a) analysis of number of staff between main categories; b) staff benefits package; c) assumed annual percentage increase in wages; d) ongoing training cost per staff and initial staff training cost; and e) foreign staff as a percentage of total staff.

4. Staffing and human resource development

This section should describe the following:

i) staffing policy, to include recruitment, retention and localization; ii) staff facilities, to include accommodation, messing, educational and recreational

facilities, if any iii) staff welfare, incentives and benefits; and iv) training requirements and programmes

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The proforma financial statements and supporting information should be prepared in accordance with internationally accepted accounting practices and conventions. The main accounting policies should be summarised. The proforma financial statements and supporting information should be prepared on the accruals basis and not on cash basis. The business plan and financial schedules should be consistent with other aspects of the proposal. Any additional information, not specifically requested in these instructions, that has a material impact on the profitability and financial viability of the proposal should be included as part of the overall business plan.

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ANNEX II - SAMPLE FORMS

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1. Bid Form and Rent Schedule Date: ___________________

IFB No: MT/TMP2/PIC/01/2003 To: Ministry of Tourism, Dear Sir/Madam, Having examined the bidding documents including Addenda Nos. [insert addendum numbers if appropriate], the receipt of which is hereby duly acknowledged, we, the undersigned, offer to lease and develop (name of the island), (name of the atoll) as a picnic island for a total lease rent of [total lease rent for a period of five years in words and figures] for a period of five years as follows: Year 1 - Lease Rent [ amount in words and figures] Year 2 - Lease Rent [ amount in words and figures] Year 3 - Lease Rent [ amount in words and figures] Year 4 - Lease Rent [ amount in words and figures] Year 5 - Lease Rent [ amount in words and figures] For the subsequent years, the lease rent will be paid in accordance with the Lease Agreement. We undertake, if our Bid is accepted, to develop (name of the island), (name of the atoll) as a picnic island in accordance with the proposal submitted. If the bid is awarded, we will obtain the guarantee of a bank in a sum equivalent to 2.5% percent of the total investment for the due performance of the Agreement, in the form prescribed by the Government. We agree to abide by this bid for a period of sixty (60) days from the date fixed for bid opening under Clause 12 of the Instructions to Bidders, and it shall remain binding upon us and may be accepted at any time before the expiration of that period. Until a formal Agreement is prepared and executed, this bid, together with your written acceptance thereof and your notification of award, shall constitute a binding contract between us.

We confirm that we have not in anyway been associated, in the preparation of this bid, directly or indirectly, with an employee of the Ministry of Tourism.

We understand that you are not bound to accept the highest or any bid you may receive.

Dated this ________________ day of ________________ 2004. [signature] [in the capacity of] Duly authorized to sign bid for and on behalf of

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2a. Bank Guarantee WHEREAS [name and address of the Bidder] (hereinafter called “the Bidder”) has submitted a bid dated [date of submission of bid] for the lease of (name of the island), (name of the atoll) in the Republic of Maldives to develop as a picnic island (hereinafter called “the Bid”). WHEREAS WE know and understand that this document forms an integral part of the requirements of the Bid. KNOW ALL PEOPLE by these presents that WE [name of bank or financial institution] of [name of country], having our registered office at [address], undertake to pay the Bidder any sum or sums not less than United States Dollars [amount of the guarantee] in aggregate, representing 2.5% (two and half percent) of the total investment cost of developing the island as a picnic island. ALWAYS PROVIDED THAT This undertaking is personal to the Bidder and not assignable. Our liability thereunder shall be limited to a sum or sums not exceeding in aggregate [amount of the guarantee]. This guarantee shall expire on [date; 30 days beyond the date of bid validity] and any demand in respect thereof should reach the [name of bank/financial institution] not later than the above date. This guarantee shall be governed by and construed in accordance with the laws of [country]. This guarantee shall supersede all agreements between us and the bidder in relation to this bid. If there are any inconsistencies between this guarantee and any other document exchanged between us and the bidder, the terms of this guarantee shall prevail.

[seal and signature of the bank/financial institution]

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Note: Bank Guarantee issued by foreign financial institutions should be duly notarized.

2b. Letter of Commitment WHEREAS [name and address of the Bidder] (hereinafter called “the Bidder”) has submitted a bid dated [date of submission of bid] for the lease of (name of the island), (name of the atoll) in the Republic of Maldives to develop as a picnic island (hereinafter called “the Bid”). WHEREAS WE know and understand that this document forms an integral part of the requirements of the Bid. KNOW ALL PEOPLE by these presents that WE [name of bank or financial institution] of [name of country], having our registered office at [address], undertake to commit a sum of not less than United States Dollars [amount of the commitment] in aggregate, representing 2.5% (two and a half percent) of the total investment cost of developing the island as a picnic island. ALWAYS PROVIDED THAT This undertaking is personal to the Bidder and not assignable. Our liability thereunder shall be limited to a sum or sums not exceeding in aggregate [amount of the commitment]. This Letter of Commitment shall expire on [date; 30 days beyond the date of bid validity] and any demand in respect thereof should reach the [name of bank/financial institution] not later than the above date. This Letter of Commitment shall be governed by and construed in accordance with the laws of [country]. This Letter of Commitment shall supersede all agreements between us and the bidder in relation to this bid. If there are any inconsistencies between this Letter of Commitment and any other document exchanged between us and the bidder, the terms of this Letter of Commitment shall prevail.

[seal and signature of the bank/financial institution]

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Note: Letter of Commitment issued by foreign financial institutions should be duly notarized.

3. Performance Security

To: Ministry of Tourism of the Government of the Republic of Maldives: WHEREAS [name of Bidder] (hereinafter called “the Lessee”) has undertaken, in pursuance of the Agreement attached with the Notification of Award letter no. [reference number of the letter], dated _____________ 2004 to lease (name of the island), (name of the atoll) (hereinafter called “the Agreement”). AND WHEREAS it has been stipulated by you in the said Agreement that the Lessee shall furnish you with a bank guarantee by a reputable bank for the sum specified therein as security for compliance with the Lessee’s performance obligations in accordance with the Agreement. AND WHEREAS we have agreed to give the Lessee a guarantee. THEREFORE WE hereby affirm that we are Guarantors and responsible to you, on behalf of the Lessee, up to a total of [amount of the guarantee in words and figures], and we undertake to pay you, upon your first written demand declaring the Lessee to be in default under the Agreement and without cavil or argument, any sum or sums within the limits of [amount of guarantee] as aforesaid, without your needing to prove or to show grounds or reasons for your demand or the sum specified therein. This guarantee is valid until the ________ day of ___________ 2004.

Signature and seal of the Guarantors

______________________________________________________________ [name of bank or financial institution]

______________________________________________________________ [address]

______________________________________________________________ [date]

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Note: Performance Security issued by foreign financial institutions should be duly notarized.

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4. Documentary Evidence of Person or Legal Entity 1. Name of Bidder: [Indicate whether an individual, partnership, or company] 2. If the Bidder is an individual: Present address: Permanent address: [Attach copy of passport or other such identification] 3. If the bidder is a partnership, state: I. Capital outlay: II. The partners: III. Name of partner Address of partner % share 1. 2. 3.

IV. Date of registration of business: V. Date of commencement of business:

[Attach copy of partnership agreement which has been duly registered with the

concerned authorities]. 4. If the bidder is a company: I. Registered address in full: II. Registration number: III. Place and date of registration: [Attach copy of certificate of registration of company, and Articles and Memorandum of

Association which have been registered with the Registrar of Companies or other such authorities as the case may be, in the country of incorporation]

IV. Nominal share capital of the company: V. Issued share capital of the company:

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VI. Particulars of shareholders of the company and the share holding structure. Name of shareholder Address of shareholder No. of shares held 1. 2. 3. VII. Particulars of the directors of the company: Name of director Address of director Occupation of Director 1. 2. 3. [Please indicate who is the managing director, etc.]

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5. Format of Work Plan

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ANNEX III - DRAFT LEASE AGREEMENT

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Lease Agreement for the Island of

(name of the island), (name of the atoll) THIS AGREEMENT is made on this ……………………… BETWEEN the Government of the Republic of Maldives, represented by the Ministry of Tourism (hereinafter referred to as “the Lessor” or the “Government”) on the first part AND ……………………… (hereinafter referred to as “the Lessee” which expression includes heirs, successors-in-title and assigns) on the other part. WHEREAS the Government of the Republic of Maldives is the owner of the island known as (name of the island, and atoll) (hereinafter referred to as “the Island”) in (name of the atoll), Republic of Maldives; and WHEREAS the Government has invited bids to develop a picnic island at (name of the island), (name of the atoll) and has accepted a bid by the Lessee to lease the said Island for a Lease Rent specified in accordance with the terms and conditions herein; and WHEREAS, the Lessor and the Lessee have agreed to enter into this Agreement for the lease of the Island for a period of …….. (……..) years on the terms and conditions specified herein below: Now, therefore, the Lessor and the Lessee hereby agree as follows.

Definitions 1. Unless the context otherwise requires, the following words and expressions shall have the

following meanings: “Island” means island located at ………………….north, …………… east and known as

(name of the island), in (name of the atoll) in the Republic of Maldives and which includes the dry land and surrounding lagoon as demarcated according to the existing practice concerning uninhabited islands in the Republic of Maldives.

“Picnic Island” means all the buildings, installations, structures, facilities, machinery,

equipment, tools, furniture, fixture and fittings, cutlery and crockery and linen directly associated with the extent of operation and management of the island and inventoried pursuant to Clause 24 herein below and attached as Schedule I hereto or otherwise.

“This Agreement” means this Lease Agreement, including all the Schedules and

documents listed in Clause 2 herein below. “The Rent” means the lease rent payable to the Government under Clause 30 of this Lease

Agreement. “The Proposed Investment” means the investment to be made by the Lessee on the Island

in accordance with this Agreement.

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“Year” shall mean each successive period of twelve (12) calendar months commencing

from the date of signing this Agreement.

Additional Documents that are Part of the Agreement 2. The following documents shall be deemed to form and be read and construed as an

integral part of this Agreement, viz.

a) Instructions to Bidders b) Bid Form and Rent Schedule submitted by the Lessee c) Project Proposal/Feasibility Study d) Government’s Notification of Award e) Work Plan

In case of any conflict or discrepancy between this Agreement and the said documents,

this Agreement shall prevail.

Commencement and Duration of this Agreement 3. In consideration of rent stipulated in Clause 30 of this Agreement and the covenants and

conditions hereinafter contained to be observed and performed on the part of the Lessee, the Lessor hereby leases unto the Lessee the Island and in consideration of giving the Island on lease and the covenants and conditions hereinafter contained to be observed and performed on the part of the Lessor the Lessee takes on lease, the Island for a period of … (….) years commencing from the date of signing this Lease Agreement.

4. The Lessee shall construct, develop, operate and manage a picnic island on the Island

hereby leased in accordance with this Agreement. 5. The Island is leased together with all rights, ways and means of access and privileges

whatsoever belonging to or enjoyed with or in connection with the Island. 6. From the date of signing this Lease Agreement, the Lessee shall be entitled to vacant

possession and quite enjoyment and full charge and responsibility for the development, management, control and maintenance of the Island during the currency of this Agreement without any unlawful interruption or disturbance from or by the Lessor or any person or body of persons claiming through or under or in trust for the Lessor PROVIDED ALWAYS that the Lessee continues paying the rent, and observing and performing all obligations under this Agreement.

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Standards 7. The design, development and operation of the Picnic Island shall conform to the Project

Proposal and the regulations of the Ministry of Tourism and/or any other relevant Government body.

Performance Security 8. Within thirty (30) days of receipt of the Notification of Award, and before signing this

Lease Agreement, the Lessee shall furnish to the Government a Performance Security equal in amount to 5% (five percent) of the Proposed Investment and the Performance Security shall be valid for sixty (60) days beyond the duration of the agreed Work Plan. Performance Security issued by a foreign financial institution should be duly notarized. In the event that an extension is given to the Work Plan, in accordance with Clause 22, a modified Performance Security, valid for a period of 60 (sixty) days beyond the extended date of completion shall be submitted to the Lessor.

9. The proceeds of the Performance Security shall be payable to the Lessor in the event of

the Lessee’s failure to complete the development of the Picnic Island in accordance with the agreed Work Plan.

10. The Performance Security shall be denominated in United States Dollars. 11. The Performance Security will be discharged by the Government and returned to the

Lessee no later than thirty (30) days following the date of completion of the Picnic Island in accordance with this Agreement.

Detailed Drawings 12. Within ninety (90) days of Notification of Award, the successful bidder shall submit the

following for approval:

1) Detail drawings covering the following, for the structures proposed

a) a map of the island/part of the island showing reef line, high tide line & bush line;

b) architectural detail drawings (scale not less than 1:100) with technical specifications;

i) site and layout plans showing the total site area, built up area, open area and percentage, break water, building lines, sewer mains, electricity, water supply, navigational aids, fire fighting and drainage;

ii) floor plans with furniture and machinery layout; iii) sections with finishes; iv) roof plans; v) elevations; and

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vii) other architectural details such as handrails to describe the structure.

c) structural detail drawings (scale not less than 1:100) with technical specifications;

i) foundation details; ii) roof details; iii) flooring and supporting structural details; iv) cross sectional drawings of all facilities, break water; and v) other structural details to describe the structures

d) building services drawings with technical specifications;

i) electrical layouts; ii) plumbing layouts; iii) fuel and water distribution network; iv) fire fighting details; and v) other mechanical and information technology network details.

2) Details of power generation and distribution including single line diagram of engine control and distribution panels and networks; 3) Details of water supply and sewage systems including distribution network diagrams;

4) Details of garbage collection and waste disposal system; 5) Bill of Quantities and list of materials; and 6) Environmental Impact Assessment Report.

Inspection 13. The Lessor or its representative shall have the right to inspect the construction and

development of the Picnic Island at any time to confirm their conformity to this Agreement.

14. During inspection, all reasonable facilities and assistance, including access to drawings

and the relevant data, shall be furnished to the inspectors at no charge to the Lessor or its representative.

15. Should any inspected facility fail to conform to the approved standards and the Project

Proposal, the Lessee, at its own cost, shall make alterations necessary to meet required standards and attain conformity. No extension of construction period will be given on account of such alterations

16. The Lessor’s right to inspect, where necessary, shall in no way be limited or waived by

reason of the facility having previously been inspected by the Lessor or its representative.

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17. The provisions contained in Clauses 13, 14, 15 and 16 above, shall not in any way release the Lessee from any obligations under this Agreement.

Change Orders 18. If the Lessee requests in writing, the Lessor may, at its discretion, approve changes within

the general scope of this Agreement in any one or more of the following:

a) Drawings, designs, or specifications furnished under Clause 12 of this Agreement; and

b) The facilities and services to be provided.

Delays in the Lessee’s Performance 19. The Lessee shall construct and develop the Picnic Island in accordance with the Project

Proposal and the Work Plan. 20. In the event the Lessee fails to complete the construction and development of the Picnic

Island in accordance with the time schedule specified in the Work Plan the Lessor may:

a) Forfeit the Performance Security b) Impose liquidated damages as per Clause 23 of this Agreement; and or c) Terminate this Agreement in accordance with Clause 44 of this Agreement

21. The Lessor shall not forfeit the Performance Security, or impose liquidated damages, or

terminate this Agreement for default by the Lessee under Clause 44 below, to the extent that its delay in completing the construction and development of the Picnic Island, within the period specified in the Work Plan, is a result of violence due to war, civil war, or civil commotion, or of storm, tempest, flood, inevitable accident or of other irresistible force or event beyond the Lessee’s control which the Lessee could not prevent with reasonable diligence.

22. If the Lessee encounters an event specified in Clause 21 above impeding the timely

completion of the development of the Picnic Island in accordance with the Work Plan the Lessee shall promptly notify the Lessor in writing of the existence of such event and its likely duration and its cause(s). As soon as practicable, after the receipt of the Lessee’s notice, the Lessor shall evaluate the situation and may, and at its discretion, give an extension to the date of completion, in which case the extension shall be ratified by amendment to this Agreement.

Liquidated Damages 23. If the Lessee fails to complete the construction and development of the Picnic Island in

accordance with the time schedule specified in the Work Plan, the Lessor shall without prejudice to any other rights it may have, charge for each day of delay, a sum equivalent to 0.1% of the proposed investment in US Dollars.

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Inventory 24. Within thirty (30) days of commencement of the operation of the Picnic Island, the Lessee

shall furnish the Lessor an inventory of all movable and immovable assets directly associated with the operation and management of the Picnic Island, which shall be checked and signed by both the Lessor and the Lessee and be attached hereto as Schedule I. This Schedule shall be adjusted to reflect any additions and/or omissions to the Picnic Island during the currency of this Agreement and all variations to the Schedule shall be checked and signed for by both the Lessor and the Lessee.

Taxes and Other Dues 25. The Lessee shall duly settle with the appropriate agencies, Government or private, all

charges, rates and taxes levied in respect of the Island and the Picnic Island during the currency of this Agreement.

Physical Environment of the Picnic Island 26. The Lessee shall maintain the Island and the Picnic Island in good order, repair and

condition, reasonable wear and tear excepted, during the currency of this Agreement. 27. The Lessee shall keep the Island in a clean and sanitary state, free from noxious weeds

and pests, and conform to all the laws, regulations and requirements affecting environment, health, sanitation and safety during the currency of this Agreement.

28. The Lessee shall preserve the flora and fauna of the Island and shall endeavour to

conserve and improve the environmental condition of the Island and maintain the natural beauty of the Island. The Lessee shall not cause any trees to be felled, destroyed or damaged without the prior written approval of the Lessor.

Employment in the Picnic Island 29. The Lessee shall at all times provide reasonable terms and condition of employment to all

its staff in accordance with the laws and regulations relating to employment in the Republic of Maldives. Accommodation, benefits and amenities provided to such staff shall be at a standard not lower than that provided for in this Agreement, the Project Proposal and in the relevant regulations made by the Ministry of Tourism or any other Government body or bodies.

Rent

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30. The Lessee shall pay to the Lessor the Annual Rent as follows:

30.1 During the first five (5) years, starting from the date of commencement of the operation of the Picnic Island or six (6) months from the date of grant of approval by the Government for construction of the Picnic Island, whichever is earlier, annual Rent shall be paid as provided in the Bid Form and Rent Schedule attached hereto.

30.2 The annual Rent for the succeeding periods of five (5) years or part thereof, the

Lease Rent shall be fixed, by the Lessor, in consultation with the Lessee six (6) months prior the commencement of each period.

31. In holding consultation and fixing the rent referred to in Clause 30.2 above, the Lessor

shall take into account, inter alia, the following:

a) The tourist market situation prevailing in the Maldives at the relevant time. b) The currency exchange rate fluctuation and United States Dollar inflation.

32. The annual Rent shall be paid in quarterly installments in advance before the

commencement of the quarter for which such payment is due. 33. If the rent or any part of it is in arrears the Lessee shall pay liquidated damages, at the rate

of 0.5% of the amount outstanding in arrears, calculated on a daily basis, for each day of delay. The damages are to be paid in addition to the full payment of all amounts in arrears.

Redevelopment and Improvement 34. In the event the Lessee decides to redevelop or improve the Picnic Island after the

commencement of the operation of the Picnic Island, such improvements or development shall be carried out with prior approval of the Lessor and in conformity with the plans approved in writing by the Lessor and the relevant Government authorities. The Lessor shall not approve any redevelopment or improvements that run counter to the Project Proposal submitted with the Bid. Redevelopment and improvements shall be inventoried and Schedule I to this Agreement shall be amended as provided in Clause 24 above.

35. The Lessee undertakes not to demolish, remove or alter any buildings, installations or

structures described in Schedule I without the prior written approval of the Lessor. 36. Whenever any new buildings or installations are constructed or installed after the

commencement of the operation of the Picnic Island, the Lessee shall:

36.1 notify the Lessor of the commencement of the work; 36.2 allow agents of the Lessor to inspect the work when in progress; 36.3 comply with any written instructions from the Lessor to require conformity with

the approved plans; and

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36.4 notify the Lessor of the date of completion and commission of the buildings or installations

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Insurance 37. The Lessee shall, during the currency of this Lease Agreement, insure and keep insured

the Picnic Island to their full reinstatement value including architect’s and surveyor’s fees, one year’s rent, the cost of demolition and site clearance, with an insurer acceptable to the Lessor, against loss or damage by fire, storm, flood and other risks and upon the request of the Lessor, the Lessee shall produce the policy of such insurance and the receipt of the last premium paid in connection therewith. All sums received in respect of such insurance shall be laid out and expended in rebuilding or repairing or otherwise reinstating the Island as the case may be. The Lessee shall pay punctually all premiums and make any other payments necessary to maintain the policy and shall not do anything which might invalidate the insurance.

Inspection 38. The Lessee shall permit the Lessor to enter upon the Island at all reasonable hours after a

prior notice of 24 hours is given to the Lessee in order to view and examine the physical state and condition of the Island and the items listed in Schedule I annexed hereto. The Lessee shall, within a reasonable period, repair and make good any defects and wants of reparation of which the Lessor gives the Lessee notice in writing.

39. The Lessee shall permit the Government of Maldives and its agents at any time to enter

and inspect the Picnic Island, call for information, have free access to the office of the Island for the purpose of inspecting the books of accounts and records and take copies thereof and make extracts there from for any other relevant purpose. The Lessee shall also furnish the Government any information or data whenever required to do so, whether requested in writing or otherwise.

Grants of Rights, Interest or Possession 40. The Lessee shall not, prior to commencement of operation of the Picnic Island, grant any

right, interest, or possession of the Island under this Agreement to any party by way of sale, assignment, sublease or management contract or any other similar device. If the Lessee is a corporate legal entity, no transfer of shares of the entity shall be made, until the commencement of operation of the Picnic Island. After the commencement of the operation of the Picnic Island, the Lessee shall have the right to sell the investment made on the Island by the Lessee or to sell or transfer its rights under this Agreement to another party, or if the Lessee is a private corporate body, to transfer its shares, after obtaining written approval of the Lessor and in accordance with conditions stipulated by the Lessor.

41. The Lessee shall have the right to enter into agreements, subject to the terms and

conditions of this Agreement, to carry on various legally permissible businesses in respect of the Picnic Island, to one or more parties, PROVIDED ALWAYS that the duration of such agreements shall not exceed the currency of this Agreement.

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42. The Lessee shall have the right to mortgage, hypothecate or otherwise encumber the interests in the Island and the Picnic Island for the purpose of developing and improving the Picnic Island during the currency of this Agreement, including the period prior to the commencement of operation, subject to prior written approval and conditions (if any) of the Lessor, to any party, PROVIDED ALWAYS that the rights and interests of the Lessor are not adversely affected and the Lessee undertakes to settle the loan or financial obligation prior to the expiry or sooner determination of this Agreement.

Termination by the Lessor

43. Without prejudice to any other rights which the Lessor may possess under this Agreement, the Lessor has the right to terminate the Agreement, if the Lessee shall make default in any one or more of the following respects: 43.1 if the Lessee fails to pay the Rent falling in arrears and the liquidated damages

claimed in accordance with Clause 33 above for such default within thirty (30) days from the date the Rent fell due; or

43.2 in the event the Lessee fails to comply with the notices referred to in Clauses 48

and 49 of this Agreement or fails to complete construction and development of the Picnic Island as per Clause 19 of this Agreement; or

43.3 if the Lessee becomes bankrupt or is wound up whether voluntarily or

compulsorily otherwise than for purposes of amalgamation or reconstruction, then the Lessor may serve written notice of termination of this Agreement specifying the reason for termination and, the date when this Agreement would stand determined being seven (7) days after such notice, may re-enter upon and take possession of the Island and the Picnic Island. The Lessor is entitled to keep a representative on the Island for the duration of the said notice and the Lessee shall provide full board to the representative without charge; or

43.4 if the Lessee fails to complete the construction and development of the Picnic

Island in accordance with the time schedule specified in the Work Plan, or within any extension thereof granted by the Lessor in pursuant to Clause 22 and 19.

44. In the event of the determination of this Agreement in accordance with Clause 43 above:

44.1 The Lessee shall have the right to remove, sell or otherwise dispose of all tools, machinery, equipment, goods and materials hired by the Lessee and used temporarily on the Island and not included in Schedule I. If within a reasonable time after determination of this Agreement the Lessee has not so removed all such tools, machinery, equipment, goods and materials then the Lessor may remove and sell such items, holding the proceeds less all costs incurred, to the credit of the Lessee.

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44.2 The Lessor shall pay to the Lessee the aggregate of the proceeds of the sale referred to in Clause 44.1 above less the cost if any incurred by the Lessor in the said sale and the equivalent value of any reasonable loss caused to the Lessor by the Lessee’s default which lead to the determination of this Agreement.

44.3 The Lessor shall make best endeavors to make a subsequent Lessee accept

assignment unto itself, of all contracts made by the Lessee in relation to the management and operation of Picnic Island and that do not involve any financial loss to the subsequent lessee. However, the Lessor shall not take any responsibility whatsoever for any contracts entered to by the Lessee after the date of determination of this Agreement.

Termination by the Lessee 45. Without prejudice to any other rights which the Lessee may possess under this

Agreement, if the Lessor refuses or persistently neglects to perform and observe the terms, conditions and provisions or any of them on its part contained in this Agreement the Lessee may serve a written notice to the Lessor to perform and observe the same. If the Lessor fails to comply with the terms and conditions of this Agreement without a valid reason within sixty (60) days after such notice is served then the Lessee may serve a written notice of termination of this Lease specifying the reason for termination, and sixty (60) days after such notice this Agreement shall stand determined PROVIDED ALWAYS that the notice of termination shall not be given unreasonable or vexatiously.

46. In the event of determination of this Agreement under Clause 45 above:

46.1 The Lessor shall have the right to remove sell or otherwise dispose of all tools, machinery, equipment, goods and materials, hired by the Lessee and used temporarily on the Island and not included in Schedule I. If within a reasonable time after determination, the Lessee has not so removed such property then the Lessor may remove and sell any such property, holding the proceeds less all costs incurred, to the credit of the Lessee.

46.2 The Lessor shall pay to the Lessee after deduction of the cost incurred by the

Lessor in the sale referred to in Clause 46.1 above, the balance of the aggregate of the proceeds of the said sale, if any.

47. The Lessee will be entitled to terminate this Agreement after giving six (6) months’ prior

notice to the Lessor of its intention to terminate this Agreement and, on expiry of the said notice, this Agreement shall cease and determine but subject nevertheless and without prejudice to any obligations and liabilities imposed on or incurred by the Lessee under this Agreement and settlement by the Lessee of all debts and claims. However, the Lessee shall not be entitled to terminate this Agreement as aforesaid in this Clause, unless the Picnic Island is in good operational condition and repair and free from any mortgage, debts or liabilities at the time of and at the expiry of the said notice.

Breach of non-financial nature

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48. In all cases of non-performance, non-observance, infringement or violation of any covenants, terms, conditions and provisions contained in this Agreement except that contained in Clauses 30, 32 and 33 on the Lessee’s part the Lessor shall have the right to claim an amount not exceeding US$ 2,500 (Two Thousand Five Hundred United States Dollars) as liquidated damages and shall give thirty (30) days notice in writing to the Lessee to remedy such default.

49. In the event the Lessee fails to comply with the notice referred to in Clause 49 above the

Lessor shall have the right to claim from the Lessee an amount not exceeding US$ 10,000 (Ten Thousand United States Dollars) as liquidated damages and if the non-compliance still continues for a further period of fifteen (15) days the Lessor reserves the right to act in the manner provided in Clause 43 above.

Provision for Impossibility of Performance 50. In case of violence due to war, civil war or civil commotion or of storm, tempest, flood,

inevitable accident or of other irresistible force or event beyond the Lessee’s control causing damage to the Island:

50.1 where the damage constitute total destruction of the Island or any essential part

thereof the Lessee shall be entitled to suspend operation of the Picnic Island in full; or

50.2 where the damage constitute partial destruction of the Island the Lessee shall be

entitled to suspend operation of the Picnic Island in part; PROVIDED ALWAYS that the Lessor or the Court referred to in Clause 52 below is agreeable to the fact that such damage has been caused to the Island as the case may be.

51. In the event, damage as specified in Clause 50 occurs to the Island, the Lessee shall give

written notice of such damage to the Lessor as soon as practicable. And within seven (7) days after the receipt of such notice, the Lessor shall cause an inspection of the Island and inform the Lessee in writing of its decision.

52. Where the Lessor is not agreeable to the fact that such damage has been caused to the

Island and/or the Picnic Island, the Lessee shall be entitled to refer the matter to an appropriate Maldivian Court of Law.

53. Where the Lessee refers the matter to a Court as provided in Clause 52 above, the parties

shall to the best of their endeavours take all necessary steps to expedite the business of the said Court.

54. In the event the operation of the Picnic Island is suspended in full as provided in Clause

50.1, the term of this Agreement shall be deemed temporarily suspended from the date of destruction until the date of resuming operation of the Picnic Island.

55. In the event the operation of the Picnic Island is suspended in part as provided in Clause

50.2 the Lessee shall be entitled to a proportionate rebate/reduction of the Rent.

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Emergency and Public Purposes 56. In the event the Government of the Republic of Maldives requires the Picnic Island in an

emergency, the Government shall be entitled to suspend this Agreement forthwith or after allowing such period of notice as the Government may deem fit, and take possession and control of the Picnic Island upon such suspension and the period of such suspension shall be excluded for the purposes of this Agreement from the computation of the term of this Agreement.

57. The existence, continuance and cessation of the emergency referred to in Clause 56 above shall be determined by the Government and any directions given by the Government in this regard shall be adhered to by the Lessee until the Government has entered into possession of the Picnic Island.

58. Where the Island is required for the defence of the Maldives, the Lessor shall be entitled

to terminate this Agreement and take possession of the Island without any prior notice. In the event of termination of this Agreement under this Clause, just compensation shall be paid by the Lessor to the Lessee for the investment made on the Island by the Lessee.

59. Where the Island is required for a public purpose, the Lessor shall be entitled to terminate

this Agreement and take possession of the Island with two years prior written notice. In the event of termination of this Agreement under this Clause, the depreciated value of the buildings and items as of the date of handing over of the Picnic Island included in Schedule 1 to this Agreement, shall be paid by the Lessor to the Lessee.

60. The Lessor shall be entitled to deduct from the payment due to the Lessee under Clauses

58, and 59 , any outstanding dues on the part of the Lessee in respect of the Island.

Notices 61. Communications or requests required or permitted to be given or made under this

Agreement shall be in writing. Such notice or request shall be delivered by hand, mail, telegram or cable to the party to which it is required or permitted to be given or made at its address hereinafter specified.

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The addresses so specified are:

For the Lessor: Ministry of Tourism Ghazee Building Male’ Republic of Maldives For the Lessee: ------------------- -------------------

Settlement of Disputes 62. It is agreed between the parties that disputes and disagreements arising under or in

connection with this Agreement shall in the first instance be endeavored to be settled by mutual discussion and agreement and on failure to reach a satisfactory settlement of the matter in dispute, reference shall be made to a Maldivian Court of Law for adjudication in accordance with the relevant and applicable laws. The decision of the Court in such matter would be final and binding on the Parties.

63. This Agreement does not exclude the parties from referring a matter in dispute to

arbitration in accordance with an Arbitration Act or rules that may be enacted in the Republic of Maldives.

Variation and Discharge of Agreement 64. This Agreement including the Schedules and other documents listed in Clause 2 contains

the whole of the Agreement between the Parties and shall not be varied except by mutual agreement executed by document in writing.

65. The Lessee undertakes to peaceably and quietly deliver and yield up possession of the

Island to the Lessor in good operational condition and repair and at the standard at which it was operating upon the expiration or sooner determination of this Agreement. The Lessee shall not be entitled to receive any compensation whatsoever in respect of the Picnic Island constructed on the Island upon expiration or sooner determination except in the event that this Agreement is terminated in accordance with Clause 58 or 59 of this Agreement.

66. Within six (6) months prior to expiry of this Agreement or in the event of sooner

determination of this Agreement, the Lessor or its agents shall inspect the Island to examine that all the items inventoried in Schedule I are in good operational condition.

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67. Upon carrying out the inspection referred to in Clause 66 above, if any item is found to be damaged, missing or defective the Lessor may demand repair, replacement, payment of cost or payment of compensation, for the damaged, missing or defective item(s) and the Lessee shall repair, replace or pay. In demanding payment for any damaged, missing or defective installations or equipment, the Lessor shall allow for reasonable wear and tear and depreciation, except for damage or defect caused by the Lessee’s misuse or neglect to properly maintain and upkeep the installations or equipment.

Governing Law 68. This Agreement is subject to and shall be governed by the laws and regulations of the

Republic of Maldives. IN WITNESS WHEREOF the Parties have hereto and to four others of the same tenor and date set their hand (and seals) at the Ministry of Tourism in Male’, Republic of Maldives on date first above written.

…………………………………….

…………………………………….

Signed by

…………………………………….

for and on behalf of the Lessor.

Signed by

……………………………………. For and behalf of the Lessee

WITNESSES:

……………………………………. (Signature)

…………………………………….

(Signature)

…………………………………….

……………………………………. (Name and Address)

…………………………………….


……………………………………. (Signature)

……………………………………. (Signature)

…………………………………….

.…………………………..………. (Name and Address)

…………………………………….
