Maldives opposition parties allege corruption in Male International Airport privatisation deal

Corruption is rife in Male International Airport privatisation process, according to the Dhivehi Rayyithunge Party (DRP), the Peoples Alliance (PA), the Dhivehi Qaumee Party (DQP) and the Jumhooree Party (JP). The opposition parties have signed an agreement to work against the privatisation process.

The government’s haste in the bidding process, at a time when there is a bill pending in the Majlis which would regularise the process of selling public assets, is troubling and a case would be lodged with the anti-corruption commission, say the president of DQP, Dr. Hassan Saeed and the president of People’s Alliance, Abdulla Yameen.

Saeed also noted that the move comes at a time when public confidence in the government is at rock-bottom. The airport should be developed by the Maldives Airports Company (MAC), according to Saeed, and if the same provisions which the government is allowing for GMR were allowed for MAC, it would be able to develop the airport.

They also said that a Majlis amendment is necessary to raise the airport service charge from US$18 to US$25, which the government has promised to GMR.

Experts have said that privatisation of US airports was one reason which led to 9/11 attacks in US, said Yameen, and privatisation could cause loss of revenues to companies which operate through the airport, such as Island Aviation Services. GMR’s fuel charges, airport tax and charges for flights landing at the airport could cause tourist arrivals to decline, he said.

Because of the financial and economic crisis, this is not the best time to sell an asset like the airport, Yameen said, and in the bidding process, highest marks should not be given to the company which pays the largest amount upfront, but to the company which gives the most throughout the lease period.

The government has never requested money for the airport development from the Majlis, Yameen said.

GMR should consider the views of the people and the opposition parties before making a final decision, said Dr Hassan Saeed in response to a question from Miadhu Daily. “Even if they sign the agreement, and even if they take over management of the airport, we will do whatever we can to cancel the agreement. We will go to Court, and I have a guarantee that we can win this case.”

Haveeru Online reports the Bangalore-based GMR has proposed to pay US$78 million (almost Rf1 billion) upfront to the Maldivian government, one percent of the total profit in the first year (until 2014) and 10% of total profit from 2015 to 2035. The company also agreed to pay 15% of fuel trade revenues in the first four years and 27% from 2015 to 2035.

President Nasheed has said that with privatisation, “the government will be able to save over US$300 million in investments.” The government had launched the airport tender process in October 2009. The President said the International Financial Corporation, a member of the World Bank Group, worked with the government throughout the process, and he was “confident the tender process was transparent and ensured there was no room for corruption.”

The GMR group is named after its founder G. M. Rao, and Kiran K Gandhi is chairman of its airports division.


5 thoughts on “Maldives opposition parties allege corruption in Male International Airport privatisation deal”

  1. The bidding process was open to all then why those criticising did not participate in the bid. Afterall, the development that will take place will be for Maldives and Maldidivians and no one is going to airlift the new airport to some other place? Then what's the objection about or it's just politics that the opposiion have to object to whatever Government will do! I know one example of a domestic airport alloted to a local wealthy group which has not been completed even after lapse of 5 years.

  2. It appears to be a good deal.I would like the airport to be developed at least to the leve in neighboring countries.

    I do not understand the big deal about foreign companies managing Maldivian assets as it is nothing new. Dhiraagu, Wathaniyya, MWSC and a number of tourist resorts. Previously even electricity in Male' was managed by an overseas company.

  3. I heard that this deal was overseen by the World Bank. How can a deal that is overseen by the World Bank be corrupt.

    If the government can fool experts from the World Bank, then they deserve to be commended for it and we should hire our services to other countries around the world!!!

  4. How interesting, i thought Jumhoory Party was a part of the MDP Alliance and part of government. Since when did it become the "opposition" and if indeed it has left the government why has that not been announced?

  5. @Muna - Ask World bank if you doubt. World Bank & IFC are not contractors for hire. This is one of those regular stunts. I know that IFC was NOT involved in this bid process.


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