Male International Airport remains the property of the Maldivian people under the leasing agreement with GMR, says the minister of civil aviation and communications Mahmood Razee in a Miadhu report.
The government still has influence over the airport’s management and all flights will be authorised by the government, he says. ‘Aeronautical’ fees will also be set by the government.
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(0)The government today signed a 25 year lease agreement with the GMR-Malaysia Airport Holdings consortium to develop and manage Male’ International Airport, hours after parliament voted in favour of a bill requiring parliamentary approval of lease transactions with overseas parties.
Chairman of the Privatisation Committee, Mahmoud Razee, claimed parliament’s decision today would not impact the signing “as it yet to be ratified by the president.”
The signing ceremony was scheduled for yesterday but was derailed at the eleventh hour after reported disagreements between board members of the Maldives Airport Company Limited (MACL), the organisation which currently manages the airport.
Minivan News understands the four MACL board positions were reshuffled by the government last night in an effort to proceed with the signing today, although this has yet to be officially confirmed – new chairman Ibrahim Saleem, also Chairman of the Maldives Tourism Development Corporation (MTDC), signed the contract today in place of former chairman Ibrahim Nooradeen.
An official of the President’s Office observed to Minivan News that as the MACL is a public company with 100 percent of its shares owned by the government, “it is the duty of the board to act in the interests of the major shareholder.”
Minivan News is currently seeking comment from the board members.
Under the new agreement, the consortium will establish a new local company to manage the airport which will be operated by Malaysia Airlines Holdings. The Maldives National Defence Force (MNDF) will remain in charge of security, and immigration will remain under government control. A briefing document obtained by Minivan News also indicates that the agreement comes with a clause that no staff can be made redundant for two years unless for “disciplinary or performance related reasons.”
The deal has proved controversial with four opposition parties signing a statement on Saturday evening condemning the decision on nationalistic grounds, arguing that handing management of the airport to a foreign company compromised the sovereignty of the Maldives.
Deputy Leader of the main opposition Dhivehi Rayyithunge Party (DRP), Ibrahim Shareef, said last week that the DRP would not honour “shady deals of this type” if it came to power in the next election, unless they were approved by parliament, while today another of the party’s deputy leaders, Umar Naseer, said the deal was “ridiculous” and would result in the dismissal of half the airport’s 3000 staff.
Speaking briefly to the media following the signing, Managing Director of GMR Infrastructure Sri Pathi hinted acknowledgement of the controversy, stating that “airports always belong to the people – never to us.”
“Please don’t think we came here to take over the airport,” he said. “We perhaps become the trustees – but emotionally in terms of ownership it belongs to the people. We are of course here to invest our money and make a business deal on the best terms possible – but the airport still belongs to the people. We make a commitment that we will operate the airport to the best international standards that we can, and prove to you that the trust you place in us will never be betrayed.”
Managing Director of Malaysia Airports Holdings, Basheer Ahmed, noted that the majority Malaysian-government owned company managed 39 airports in Malaysia and several overseas, including airports in Hyderbad and Delhi.
“Every country needs an excellent airport because it is the visitor’s first impression,” he said.
The briefing document obtained by Minivan News contains forecasts of the government’s expected earnings (reportedly provided by GMR) from the airport over the lifespan of the contract. It reveals that a majority of the predicted revenue, a major factor in calculating the NPV (net present value) used to determine the successful bid, derives from the 27 percent fuel revenue share once the airport is completed in 2014:
The document contrasted this with the dividends paid to the government by MACL over the last three years, noting that the majority of the dividends paid in 2008-2009 were achieved “by taking a loan.”
On the suggestion that MACL should be allowed to raise finance and invest in the upgrade itself, a predicted US$300-400 million, the document noted that MACL “already has debts of Rf 600 million (US$46.69 million)” and would be unable to obtain further leverage “without a sovereign guarantee – simply not allowed due to the IMF measures.”
Meanwhile, daily newspaper Haveeru featured an interview with the Turkish-French consortium TAV-ADPM, who have reportedly expressed dissatisfaction of the bid evaluation process “and urged for a re-evaluation of the bids.”
“The newspapers started reporting that GMR won the bid even though we were not told the party who won the bid. We faced many problems, since the two companies in our consortium are also listed in stock exchange,” Haveerru reported head of the consortium, Gusiloo Betkin, as saying. “It cannot be said that a certain party won the bid without signing the concession agreement.”
Betkin expressed disbelief to Haveeru that the GMR-MAH bid could offer the government 27 percent of fuel trade “without facing any loss. We are a party that provides services to 170 million passengers annually in 39 airports. We also have experience in fuel trade,” Betkin told the newspaper.
TAV-ADPM had offered 16.5 percent of fuel trade to the government, he noted, the highest deemed feasible, and that at 27 percent, flight arrivals to the Maldives would be affected by rising fuel prices.
“The main thing is the fuel. If the fuel prices are high, no one will take in fuel from there – Maldives will lose that income. The airlines will also focus to other destinations,” Betkin told Haveeru.
The government’s Net Present Value calculations:
(0)Dislikes(0)The Bank for International Settlements (BIS) in Switzerland is warning of the threat of a new global credit crash and a deep recession.
“A shock of virtually any size risks a replay of the events we saw in late 2008 and early 2009,” says the bank in its annual report. “Unlike then, however, we have hardly any room for manoeuvre. Policy rates are already at zero and central bank balance sheets are bloated.”
(0)Dislikes(0)The Maldives government signed the 25 year lease agreement with India’s GMR Infrastructure today after appointing four new members to the Maldives Airport Company board ,according to Haveeru.
The signing ceremony came hours after the Majlis passed an amendment to the Public Finance Act, specifying that state assets could only be leased or sold with the approval of the Majlis.
(0)Dislikes(0)The parliament has today approved a Financial Bill including an amendment which declares that government can only lease a state asset or could borrow money from a foreign country under specific legislation approved by parliament.
The bill was approved 41 in favour to 33 against out of 75 members present.
Maldivian Democratic Party (MDP) MP Mohamed ‘Colonel’ Nasheed said he regretted the bill had been passed and that he was “very concerned” over its approval.
”All the services that MDP has planned to provide for the people will be disrupted according to this bill,” said Nasheed.
”Right now there is a hung parliament and it is very difficult to bring out and sufficient results from it.”
Nasheed said that responsibility for the country’s financial condition was the duty of the President and the Finance Ministry, according to the constitution.
”The Bill was not approved in the best interests of the country,” he added. ”I regret the approved amendments [governing privatisation].”
Spokesperson for MDP Ahmed Haleem said the bill was approved according to “the self-interest of two or three businessmen in parliament.”
”This bill will obstruct the public and private partnership policy of the government,” said Haleem. ”It was not passed for the benefit of the people of the country.”
However, Dhivehi Rayyithunge Party (DRP) MP Dr Abdulla Mausoom said that the government was required to govern the country “according to how its people wish.”
”The parliament represents the people,” Dr Mausoom said, ”and according to the bill, the government will now need the approval of the parliament when leasing state assets or taking loans from other countries.”
Dr Mausoom said the parliament “belongs to the people” and would only make decisions “for the benefit of the people.”
”I do not see any article in the bill that disrupts the government’s pledges,” he said. ”Privatising Male’ International Airport was not a pledge of the government.”
A senior government official Minivan News spoke to during the privatisation signing ceremony accused the opposition “of running a scorched earth policy to deny the government any chance of improving the country. It’s so short sighted – what do they hope to inherit if they gain power in the next election?”
(0)Dislikes(0)A report by the Human Rights Commission of the Maldives (HRCM) into Lale Youth International School on Hulhumale has recommended that the Education Ministry terminate its contract with Maldives-registered company Biz Atoll Pvt Ltd to manage Lale Youth International School, “and hand over management as soon as possible to a qualified party.
The Commission’s investigation had found that students had been “physically and psychologically abused, discriminated against and bullied,” the report stated, recommending “that police should investigate the physical and psychological abuse going on at the school as an urgent concern,” and “separate those suspected of physical abuse from the school’s students until the police investigation is concluded.”
The report also questioned the educational standards of the private school, observing that despite the “high fees” charged for students to attend, the school “has no laboratory for students preparing for the IGCSE” in 2011, the library “does not have books that students need”, and most of the Turkish teachers “do not know English and are therefore unable to teach.”
The government-run Fareediyya School was handed to Biz Atoll and a group of philanthropic Turkish businessmen in 2008, under an agreement made between Biz Atoll and the Education Ministry during the former administration.
In May this year, Minivan News reported concerns raised by parents and staff that the school was being used as ‘a front’ for other activities, highlighting anomalies such as ‘phantom’ foreign teachers who were being paid but had never reported to work, students being charged an assortment of fees arbitrarily, teachers with missing or fraudulent qualifications, and significant pay discrepancies between Turkish and other foreign staff.
Shortly after the Minivan News report was published, (now former) Principal of Lale Serkan Akar attempted to leave the country, leading to the confiscation of his passport. On a second attempt to leave he was taken into police custody and is currently in the criminal court facing assault charges for allegedly strangling and whipping a child with a belt, charges he has denied.
Since the story was published, Minivan News has learned that website has been blocked the school’s web filter.
The HRCM report also recommended that the school move to “dismiss employees with criminal records” and amend the school’s child protection policy to ensure that “inappropriate persons” did not work with students, and amend employment contracts “to allow adequate disciplinary action” against those suspected of physical abuse.
HRCM further recommended that Biz Atoll immediately submit the credentials of foreign teachers to the Maldives Qualification Authority (MQA) for approval, and stipulate that foreign teachers present certification of English qualification such as IELTS or TOEFL – and dismiss those teachers who did not meet the criteria listed in regulations governing private schools.
HRCM also suggested that the school establish a laboratory and library as required in its agreement with the Education Ministry, and hire a full-time librarian. It should also “immediately cease the practice of giving the same examination paper to students until they pass” and “stop charging additional fees other than those set by the Ministry” while ensuring that those fees “are commensurate to the quality of education offered.”
The HRCM report also raised concerns about the school’s adherence to employment practices in the Maldives, noting “allegations of discrimination and mistreatment of Asian and Maldivian staff”. It recommended the school establish both a school board, as required by law, and a mechanism for teachers to resolve employment issues.
HRCM also recommended the school formulate a pay scheme in accordance with employment laws “to eliminate discrimination and ensure fairness and transparency”, as well as “reimburse employees if a deposit has been subtracted from their salaries to allow them to keep their passports.”
Furthermore, the Education Ministry should formulate regulations governing international schools “to ensure supervision and monitoring by the ministry as a regulatory body”, and “establish guidelines to conduct follow-ups to supervision reports.”
“As the school was not handed over to the proprietor in a transparent manner and because the Education Ministry has not undertaken adequate efforts to improve matters at the school, and since corruption has been noted, these cases should be investigated,” HRCM’s report concluded.
Response
Managing Director of Biz Atoll, Abdulla Jameel, said the company had read the report “and are reviewing the necessary actions we have to take.”
“We will bring changes to the school,” he promised, noting that a new principal would be starting “quite soon”.
The arrangement with the Turkish funders of the school would “definitely” continue, he noted.
Regarding HRCM’s recommendation that the school be repossessed from Biz Atoll and given to “a qualified party”, Jameel said the decision was “up to the government”.
“I respect the professional work of HRCM, but at the same time I’m disappointed it has mentioned nothing positive about the school,” he said, noting its reputation for “academic excellence.”
“Given the opportunity, we will continue to manage the school and try our best to make it the number one school in the Maldives.”
Jameel would not comment on the child abuse case pending against the former principal Akar.
Deputy Minister of Education Dr Abdullah Nazeer said the Education Ministry “received the report on Thursday” and was now seeking legal advice from the Attorney General’s office concerning the repossession of the school.
“We don’t agree with all the findings [in the HRCM report] – there are certain issues we need to refute from the ministry’s side, and we have communicated this in writing,” he said. “It was very unfortunate the report was not amended [before it was released].”
“The word used repeatedly to describe the Education Ministry is ‘irresponsible’,” he said, “[but] we were the ones who first contacted police, and based on that HRCM investigated the school.”
Police had yet to find evidence to support any allegations of abuse, he claimed.
The report was critical of the ministry’s decision to review the contract with Biz Atoll during the investigation, Dr Nazeer noted.
“We added amendements to the earlier contract (requesting a new principal in three months and including a termination clause),” he explained.
There were only “very general written regulations” governing the ministry’s role in supervising privately-owned and operated schools, he noted. “The regulations do not specifically say the government should intervene,” he said.
The Education Ministry was already seeking to resolve the employment issues at the school Dr Nazeer said, and had sent a letter to Biz Atoll on the subject
“We also had a complaint from a parent that the former Principal [Serkan Akar] was still accessing the school grounds,” he said. “We also wrote a letter to Biz Atoll saying it was not appropriate for a person currently involved in a court case concerning child abuse to be accessing the school.”
Dr Nazeer also noted that a delegation of officials from the Turkish government and the business community, had arrived in the Maldives and was currently meeting members of parliament to discuss the matter together with the the Turkish Consular General in Male’.
“I can’t comment on the delegation as I am yet to have a meeting with them,” Dr Nazeer said. “I don’t know what they will discuss.”
“As far as we are concerned, we are waiting for the Attorney General’s office to determine the gravity of the findings in the report, and if they agree, provide advice for terminating the contract.”
Download the full HRCM investigation report (Dhivehi)
(0)Dislikes(0)Deputy Leader of the Maldives’ main opposition Dhivehi Rayyithunge Party (DRP), Umar Naseer, has said that the government’s decision to privatise Male’ International Airport is “ridiculous.”
”Privatisation is a good policy, but there should be limitations,” Umar said. ”There are many disadvantages that Maldivians will face in the long term future if Male’ International Airport is privatised.”
He claimed that if the airport was privatised, the Maldives would not have the authority to decide which flights would be permitted to land at the airport.
”That means, if [the operators] allowed it, an Israel flight can come and stop over after bombing Arab countries,” Umar claimed.
He also claimed that “more than 1500 jobs” would be lost.
”More than half the Maldivians working in the Airport will lose their jobs if a foreign company takes over it,” Umar predicted. ”There are currently more than 3000 Maldivians working there.”
He said that if foreigners replaced Maldivians working in the airport, “income which was earned by the Maldives would go to the hands of foreigners.”
”Retail shops in the airport will also belong to foreigners,” he said. ”So money coming into the county will flow out of the country because foreigners are earning it.”
Umar suggested that the airport could charge a US$25 airport development fee for each passenger, the same amount GMR has proposed to collect.
”If that US$25 charge is implemented it will generate an extra US$25 million annually, because more than 500,000 tourists come to the Maldives each year and could be charged upon arrival and departure – which means US$50 from each person could be collected.”
He claimed the government was pushing ahead with the privatisation deal because “there are no successful businessmen in the government.”
”President Nasheed did not even know how to run a carpentry business. In 1990 his father gave him the business, and the president bankrupted it,” Umar alleged.
He said that “any economist” would consider the privatisation deal “ridiculous”.
Today the parliament is voting on whether to amend a Financial Bill stating that any state asset can only be sold or rented by an imposed law approved by parliament.
The signing of the privatisation deal with GMR-KLIA was derailed at the last minute yesterday, in front of assembled press, when representatives of the Maldives Airports Company Limited (MACL) reportedly disagreed over who would sign the document.
Three MACL board members have now reportedly resigned after disputing the government’s decision to privatise the airport.
Press Secretary for the President, Mohamed Zuhair, said he had not officially received confirmation.
”I also heard something like that unofficially,” he said. ”I have asked for the minutes of the last MACL board meeting.”
Minister for Civil Aviation Mahmood Razee, also Chairman of the Privatisation Committee, said he had no information regarding the matter.
”All the board members agreed to privatise the airport,” said Razee. ”If they are having disputes, that might be an issue concerning individuals.”
MACL board members Shaz Waleed, Moosa Solih, and Chairperson Ibrahim Nooradeen, declined to comment.
The vote on the Financial Bill will go before parliament today.
(0)Dislikes(0)Kevin Rudd’s fall from power was mainly caused by his decisions to “shelve the emissions trading scheme, to toughen asylum-seeker policy and to impose the resource super profit tax on mining companies,” according to an article in the online Australian current affairs and culture website, Inside Story.
“Kevin Rudd was absolutely wrong to claim that he had been elected by the Australian people and not by Labor factions,” writes Geoffrey Barker. “Rudd was elected as the member for his parliamentary seat of Griffith in Queensland. Nothing more. He took the leadership from Kim Beazley by putting together the numbers within the caucus [the Labour Party MPs]. It is the caucus that creates and destroys, that gives leadership and takes it away, and it is false and fanciful to try to suggest otherwise.”
(0)Dislikes(0)Electricity usage exceeding 400 units may be subsidised from September, the deputy minister for home affairs Mohamed Firaq told Television Maldives (TVM) on Sunday, reports Haveeru.
The additional subsidies would go to applicants after a review of their financial situation, said Firaq. The government presently subsidises electricity usage below 400 units. “After September, subsidies will be provided to applicants. Usage of below 400 units will be subsidised after an ‘easy’ form is submitted. Subsidies for those who use more than 400 units will be provided after they submit a special application form,” Firaq said. “Sometimes the electricity bill becomes hefty for houses with large families… The new policy aims to provide subsidies to this group.”
The forms are available at STELCO and the National Social Protection Agency.
The government gives some Rf5.5 million as subsidies to STELCO, and the amount would reach Rf60 million by the end of 2010, reports Haveeru. The fuel surcharge would be subsidised.
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