DQP files case against GMR, MPs critique scheme

Dhivehi Qaumee Party (DQP) today submitted a case to the Civil Court against infrastructure development company GMR Male International Airport Pvt Ltd, challenging its right to collect a US$25 (Rf385.5) Airport Development Charge (ADC) and US$2 (Rf30.8) Insurance Charge commencing January 2012.

The fees are to be charged to internationally-bound passengers only. As of 4:00pm on Tuesday the case had not yet been registered.

The government signed a 25-year contract with GMR on 28 June 2010. On 30 September 2010, four opposition parties filed a case against GMR at the Civil Court. The court registrar rejected the claim.

Under the contract the Maldivian government receives:

• A sum of U$78 million as advance payment which is to be deducted from the profit due to Government.
• 1% of the Gross Revenue in the first four years (2010-2014) and 10% of the Gross Revenue from the general business in the remaining years.
• 15% of the Gross Fuel Sales in the first four years and 27% of the Gross Fuel Sales in the remaining years.
• GMR is also to invest US$375 million over a period of 25 years.

The development fee is considered “standard procedure in most airports“, GMR officials earlier told Minivan News. GMR said it would have included the fee in the ticket price, but until International Air Transport Association (IATA) provided certain codes it would have to charge the fee separately.

DQP claims that GMR’s lease of Ibrahim Nasir International Airport (INIA) was unconstitutional, illegal, and bore trademarks of corruption. It additionally claims that GMR’s contract would not have been approved if passed through official procedures.

DQP Secretary General Abdulla Ameen confirmed the case and directed Minivan News to the party website for further details. The web page’s last registered update was 29 November 2010.

“Article 97 of the Constitution prohibits any form of taxation without legislation,” reads on section. “Levy on departure passengers have always been done through legislation, including amendments thereof. In fact the current levy of USD18 for foreigners and USD14 for locals was introduced by the present government through amendments to the relevant law.

“However, the right to levy a US$25 and a US$2 (a total of US$27) was given to GMR by the Government without the passage of any law.”

DQP further claims that the government bypassed Parliament on the decision to lease INIA, thereby making GMR’s claim that it can collect the development and insurance fees is “null and void.”

State Transport Minister Adil Saleem previously informed Minivan News that the development fee had been approved by the government as part of its contract with GMR.

Immigration and customs authorities are said to support the move.

DQP told Haveeru that GMR had failed to develop INIA as per its agreement with the government, but is trying to charge customers extra fees on the pretext of airport development.

Speaking in Parliament today, Kulhudhuffushi-South MP Mohamed Nasheed said GMR is receiving all funds from airport handling.

GMR recently announced that baggage handling would be transferred from a local company to one chosen by GMR.

Nasheed said the agreement between the government and GMR was not a fair deal, and that losses incurred exceeds income earned.

“I want to highlight the fact that the US$990 charged from a [Boeing] 777 aircraft that lands during the day has been increased to US$2,985 while the fee collected from the aircraft that lands during the night has been raised to US$3,885. This is a 60-80 percent increase in charges but no improvements have been brought to the services provided by the airport,” he said.

“And we cannot accept the US$1.6 million rent charged per month from a small land plot which measures 800 square feet. Questions arise whether GMR is developing the airport by taking money from us Maldivians or whether they are developing the airport on their funds?”

Hoarafushi MP Ahmed Rasheed said, “While we are exaggerating a minor difficulty a small number of people have to bear for the sake of our nation, we don’t have anyone to speak about the development and advantages the people will be able to obtain from the most number of people who use the airport.”

In the past four months GMR has opened two lounges at INIA and expanded baggage beltways; it is currently adding eight check-in counters and two security lanes. Tourism Minister Maryam Zulfa previously expressed satisfaction with GMR as “an example for the Maldives as it moves forward.”

DQP Vice President Imad Solih earlier submitted a separate though similar civil case arguing the illegitimacy of the charge and requesting the court take action against Finance Ministry.

The Civil Court is expected to soon deliver a verdict on the case.