An aviation expert unconnected with the government or bidding process, and with extensive experience of Male’ International Airport, has told Minivan News on condition of anonymity that the state of arguably the country’s most critical piece of economic infrastructure “is far worse than most people realise” and in “urgent need of major investment”.
“The runway hasn’t been resurfaced for 18 years, and it still has cracks and depressions caused by the 2004 tsunami,” he explained.
“Even now there are spots which need to be cut out and resurfaced,” he said, naming several international carriers that had privately expressed concern to the authorities about minor damage caused to their planes by the state of the runway.
Furthermore, the airport does not meet NX14 standards of the International Civil Aviation Organisation (ICAO) because of the proximity of buildings to the runway, the source said.
“The last time ICAO did audits they were not satisfied. If the airport is not upgraded, the worse case scenario is that ICAO will blacklist the airport – and that means nobody will land here. I’m not scaremongering, but the airport needs major investment,” he said.
“I don’t think the politicians understand the situation,” he explained. “The runway needs urgent repair and maintenance, and aircraft from places like Germany – that have travelled over 10 hours with 300 passengers on board – are being held above the airport for 14-20 minutes waiting for a parking space. This is especially a problem during the European winter (peak arrivals).”
Private jets were occasionally being diverted to airports such as Trivandrum and Colombo because of a lack of parking space, denying the government a stream of income, he added – “and there’s no standard of parking, it’s like a haystack.”
The “geometry and design of the airport” were fundamental limitations of the current layout, he noted, but both the current and previous governments were financially unable to invest the significant amount of money required to repair and upgrade the facility.
“In 2006 the former government contracted UK company Scott Wilson to draw up a masterplan, with three options costing US$300 million. The government could not find the funding to go ahead with it,” he said.
“We’re at a crossroads – either it gets privatised now, or it never does. It needs urgent and necessary expansion, and the runway needs to be repaired,” the source explained.
“If people do not agree with the airport being privatised like this, they should come to the bargaining table with something better – there are many multi-millionaires in Male’ who could co-operate on this,” he said.
“It’s not about airport revenue – plenty of countries privatise their airports. But in the Maldives the whole economy is completely dependent on incoming tourists, and most of the [financial] benefits are downstream [at resorts]. At the end of the day the country benefits by having a good airport.”
Not in national interest: opposition
Yesterday evening a coalition of opposition parties, including the Dhivehi Rayyithunge Party DRP), the People’s Alliance (PA), the Dhivehi Qaumee Party (DQP) and the Jumhooree Party (JP), accused the government of acting outside the national interest over the privatisation of Male’ International Airport, and signed an agreement to try and halt the process “inside or outside parliament” after the government accepted a bid from GMR-KLIA.
This afternoon a planned signing ceremony at the President’s Office in front of assembled media was first postponed and then reschedued for Wednesday, with Chairman of the Privatisation Committee Mahmood Razee claiming that the “documents were still pending.”
Daily newspaper Haveeru reported that the signing was cancelled because of disputes among board members of the incumbent airport operator, Maldives Airports Company Limited (MACL), over who would sign the document.
The GMR-KLIA bid accepted by the government will involve an upfront payment of US$78 million and one percent of the airport’s profit until 2014, increasing to 10 percent from 2015 to 2035. GMR will also pay 15 percent of fuel trade revenues to the government in the first four years, and 27 percent from 2015 to 2035.
The two other bids – from Turkish TAV Airports Holdings Company/French Airports De Paris and Swiss Flughafen Zurich AG/GVK Airport Developers – involved substantially less upfront sums but 2-3 times the profit sharing over the life of the agreement.
The statement signed by the oppositition parties condemning the government’s decision to give the airport’s management in control of a foreign company, said the decision was “not made with the intention of benefiting the country’s economy” and that they would seek legal advice.
“[The airport] is one of the most valuable assets of the Maldives and it has a direct link to the independence of the state,” the statement said.
Last week DRP Deputy Leader Ibrahim Shareef accused the government of pushing the privatisation deal through without seeking approval from parliament, and said the DRP “will not honour this type of shady deal” if returned to power in 2013.
Razee meanwhile hit back at the opposition’s unspecified allegations of corruption, explaining that the World Bank’s International Finance Corporation (IFC) had been involved in the privatisation process as a transaction advisor since July 2009, “and would certainly not stand by if conduct was improper.”
“We started this process in December 2008. It was not something we thought up yesterday,” Razee said.
IFC representatives said they would not comment on the matter.
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OK, you opposition parties who are the government in the Majlis, stop making allegations about corruption that have no foundation and start thinking about the tourism industry that keeps you rich. If you are true nationalists, start thinking about the country and its people, instead of your own petty political ambitions.
coalition of opposition parties, including the Dhivehi Rayyithunge Party DRP), the People’s Alliance (PA), the Dhivehi Qaumee Party (DQP) and the Jumhooree Party (JP) ,does'nt care about national interest over the privatisation of Male’ International Airport,2007 goverment could get fund. maldivian cant do this give it to GMR pls.with out them we cant, otherwise we would have done some thing by now but thing is been done.
Really glad that someone has brought up the technical aspects of the problems with the airport and why it needs additional investment. So there is more to it than just the revenue arguments.
The opposition should not be opposing this without a proper understanding of the situation. Their shortsighted approach will really hinder the process of upgrading the airport.
If the opposition blocks this, then no one will take the Government of Maldives (as opposed to mdp government) seriously again.
So even if Thasmeen, Gasim, Yameen or Hassan Saeed comes to power in 2013, they will not be able to attract any investments to this country. They will have to feed the people magoo faiy.
The IFC's involvement, and the fact that this has been going on for OVER 18 MONTHS, suggests to me that it was done properly. I don't see what scope there is to accuse the people involved in any corruption. It seems to me that the party that won it, won it fair and square.
It is no surprise that Minivan would always come to salvage the MDP government. why cant the so called aviation expert come out of his cloak and reveal his Id, why is he or she afraid to be named in a democracy???. i do believe that MIA needs urgent renovation and i have no issue what so ever in privatizing the airport but the way government has awarded it to GMR is questionable and it is against the best practices as often MDP claim to follow. how could a company be sold without the knowledge and acceptance of its Board of Directors and how do you expect a six member committee to magically evaluate the bid documents within three days. Believe me or Not its a deal done long before between the indian government and P Nasheed. perhaps there could a handful of people who would pocket enough bucks for a living..who knows???.
A reality that Maldivians should learn is that we cannot survive as a country with out involvement of other nations. We import everything from water to tooth picks.
In a globalized world investments move freely. In UK Heathrow and until recently even Gatwick is run by a foreign company. Hassan Saeed, Yameen, and Qasim are crazy for power they don't care whether any project benefits the ordinary Maldivians. As long as the bid process is fair and open I don't see anything wrong in leasing the airport to the most eligible company. Why did not Qasim & Thasmeen bid for the airport if they like the airport to be managed by them. Stop politicizing everything!!
Who will blow the whistle??? Who will speak out and tell the truth that the bidder "Swiss Flughafen Zurich AG and GVK Airport Developers" submitted the most financially feasible bid and not the "GMR-KLIA" consortium. For one thing, the fuel trade revenue which GMR is promising to pay to Maldivian Government is simply "Fictitious" based on current fuel trade income Finance Ministry receives from Airports Company.
Talking about World Bank’s International Finance Corporation (IFC) involvement, it would be nice if Mr. Razee was also kind enough to mention that the IFC representatives were also frustrated when the government decided to go along with the highest upfront bidder rather than looking at the long term total revenue for the country. We have to look at the big picture. Kobaa thoa ekkala bodu manzaru??
I would like to believe minivannews has until now been an independent news and I would like to see it that way in future too. However on this topic topic, first public was persuaded on why it was important from a financial point of view. Now you are persuading the public from a Technical, Safety and National point of view. In this regard, a story on the cons on why this should not be done, interviewed from the people who are against this whole thing would be nice. Then the public can really judge.
I do not see any financial benefit by privatising the airport. According to our president we will be getting about US$40 mil per year. From the figures released by MAC, the airport made a net profit of $20 mil last year - 11% increase from last year.
If we assume the same growth over the next 35 years we would get approx. $37 mil / year (averaged over 35 years).
Considering the several millions that will go out of maldives as salary for indian employees and the unsecuriy of jobs for maldivians, I do not think this is a fair deal.
We should note that there are many maldivian students currently doing engineering degrees overseas. We do not have many places where these students can look for jobs.
Hi,
I just wanted to inform everyone who listened to the opposition coalitions press conference last night on Dhi-TV.
Yamin, claimed in his speech his in depth understanding about investment appraisal techniques (probably a last minute look on wiki). He says that the 'only' acceptable form of appraising an investment was through Net Present Value calculations. Being a professional Accountant myself I know that a single figure answer to an investment is a very very wrong approach to appraising such a large project.
NPV is subject to large number of assumptions and due the lack of financial statistics currently available in the Maldives it proves to be a fairly inaccurate measure. Besides if he was trying to impress the public he might have mentioned a few more methods such as IRR, MIRR, ARR amongst a few...
As the opposition suggested that night, that a Maldivian company should be the one to invest in the Airport, IMHO, this is absurd, to my knowledge there is no company in the Maldives capable to raising such finances.
Besides given the current fiscal deficit facing the economy, a upfront 78 or so million USD would alleviate our current dilemma quite a bit.
So its no wonder the finance minister gave it much weight in choosing the investor.
And Mr.Yamin, the present value of the initial investment is very signification in the net present value calculations, and I m quite sure that Finance Minister and his aides are competent enough to consider that this proposal will deliver a positive NPV before they consider awarding the project to GMR.
Or are you saying that your Sri-Lankan expat accountants are the only ones who can do investment appraisal? Us Maldivians can only listen and obey simpletons like you. Please stop insulting out intelligence.
And the guy from Addu, (nothing against Adduans, I am from Addu myself, I just have trouble remembering your name, cause you keep jumping around so much) where is the justifications for the numbers you stated in that conference.
IMHO, what I think is that those few entrepreneurs that we saw on TV wish to have control of the Privatized Company to be awarded to them or their cronies.
GMR is a capable company I have researched about them, they seem credible.
So please leave out the politics and your selfish agendas aside for once and think for the betterment of the people of the Maldives. While you and your families live in penthouses driving Benz most us live in shanties right next door to you.
Some figures:
1- Anni estimated: $40 million per annum.
2- Last year's financial report shows: $20 million profit.
3- The new tax of $25 per passenget: $38 million per year (assuming 1.5 million passengers).
?????
I hate it when Minivan News plays the mouthpiece for the government!
Every time the government wants to say something to the wider public, Minivan News will be at it, promoting the government's point of view. (Most recently this was done by publishing a long interview of Musthafa Luthfy, hoping it will help to save him from the doom that overhangs him -- the no confidence vote in the parliament.)
On the contrary, if there is any piece of news that can cause widespread uproar against the views of the government, Minivan News will completely ignore that news.
This is one reason why this government is making blunder after blunder.
If the government works knowing what the Maldivians want, they will have a smoother stage to walk on. But they think their advisers are superhumans who know better and so they need not know what the people want, but work as per the advisers' advice.
This style and strategy is causing problem after problem for the government. When are they going to learn?
Male' international airport needs to be developed.
No one is denying THAT!
But giving it to a private company to do it with a pathetically small profit for the Maldivians, is like ripping us off!
I personally feel that the government is selling our assets. Gayyoom did the same thing in giving out the resort islands. But I thought Gayyoom’s era and style of ruling is out now.
I thought we want to change things for the better. What is better if the new government is committing the same mistakes?
Sure, they are not selling resort islands, but in principle they are doing the same mistake!
In addition to this fact, I cannot trust an Indian company to do any construction work. Just look at IGMH – a hospital built by the Indians. It required serious repairs from day one. The patients are lucky if the falling ceilings do not hit them and kill them. It’s not just the ceiling that falls the concrete work is also so sloppy that the Maldivian government had to redo much of the work all over again. It became a liability to the government from the day the government received its keys.
The company that will build the airport may not be a bad one. But my question is why do we want a foreign company to rip us off?
Why don’t we do what we can and build it ourselves? We may not have that kind of money, but giving the airport to a foreign company is not a better solution especially when it is such a valued piece of treasure for us. This is the only international airport we have.
Why can’t we work to get the funds or try and create funds by other means?
Is there really no other way?
Are we so desperate?
UPGRADE, UPGRADE!
Who is stopping !
Just don't downgrade US in the process !
If you go ahead with this we will have to blacklist MDP in the local council elections!
why dont you guys just quit. MACL 100 or more % of profit / year, all the money going up on smoke? and i personally dont believe indians can develop an airport of our taste. Its time MACL's board to take the action. we dont care if you were appointed by Mr.president, just run the bloody company properly.
oooooh...is it only Indians who could upgrade our airport???? y cant our govt do that????.......where are the billion dollar aids our president get from foreign countries on every trip he make?????....we the Maldivians are ready to raise fund to upgrade our Airport...chase the GMR's away rite now!
75% of our population is against the stupid MDP Govt n its policy.....so i would kindly say MDP GET LOST........
anonymous aviation expert?? ha ha..what a bloody joke.
"“If people do not agree with the airport being privatised like this, they should come to the bargaining table with something better – there are many multi-millionaires in Male’ who could co-operate on this,” he said."
Well, here is my idea.
Start taking the $ 25 Airport Tax from today.
Here's why.
"Referring to Department of Immigration figures, the ministry [Tourism Ministry] said that 338,582 tourists visited Maldives from last January to May ... "
Quoted from Haveeru online of 21 June 2010
If we took $25 from each of these 338,582 tourists that came, we would have got an additional $ 8,464,550.00 from them. This was just for the first 5 months of this year. So the revenue generated per year will be much more.
For a start, to generate revenue, why not introduce the Airport Tax?
Secondly, we need to strengthen our legal system and make fool proof regulations BEFORE we can start privatizing our services.
It doesnt need an expert to know that MIA need urgent repairs.This is a given and nobody disputes this at all. We dont need experts either annonymous or open to know this basic fact.Privatisation of the MIA is not the issue here. The issue is the manner in which this is been done.The hastiness and the secrecy of the whole operation.We need to know what the results of the deal is going to be. The whole deal smacks of corruption.Evaluating such bids if a few days and hastily trying to sign the deal is suspicious to say the least. A privatisation bill is in the Majlis and the Govt. dead earnest in trying to seal the deal before it becomes law. Why the haste?No answer is forthcoming.
Levying taxes in the name of fees in the agreement is illgal. The matter should be put before the courts .
I am challenging this so called"expert" on this. There is nothing in ICAO that can blacklist Male' Airport now. All the Government needs to do is file a difference with ICAO to their Standards and Recommended Practices. This is nonsense.
It is true that when the aircraft is parked nose in, it encroaches the runway.
But the main problem is that Male' Airport requires slot coordination and MACL has not attended the IATA Slot Conference for years.
The Terminal Building needs to be upgraded and expanded but it can be done without shifting the Terminal to the East side. This plan by Halcrow is a disaster. Mr. Razee has never worked in an airport and is an aeronautical engineer. The current people in Airport are Air Traffic Control people and Electronics people. There is no one there who knows anything about Airport Operations or Flight Operations so these so called " experts" are not experts in Airport Operations.
Male' Airport makes enough to upgrade themselves without using Government money. All they need to is to put qualified and experienced people in charge instead of political appointees who knows nothing much airport operations.
The IFC would get involved because it was asked to do so. As someone who has seen the Halcrow plan, I can tell you that this is a bad plan and bad for the country and bad for the airport.
1- When Gasim was the President of MNCCI in the early 2000's he was saying all production of goods and services should be in the private sector. Operating an airport is surely a service.
2- When Gasim was the Finance Minister the airport had the same problems so with his knowledge of tourism needs why did he not get money to upgrade and overcome the security needs when he specially boasts that when he was the Finance Minister in 2006 the country registered 16% growth? Surely money would have been easier to get at that time for such infrastructure projects.
3- Gasim and Yameen were in the Majlis that rejected a paycut for the Majlis members when the country needed belt tightening. Would a 5% reduction have hit them too hard?
4- Ordinary people must wonder whether these nationalist patriots are really power hungry people trying to topple the regime or people working for the long time good of the nation.
5- Now 2 of the important issues are the one billion Rufiyaa advance and completion of the project as required.
If the one million is spent in one year by the Government there will be no more such a million coming the next year!
Someone has make sure that the project is implemented on time without short cuts. Otherwise there can be a local "BP" disaster.
5- Finally if some people in the Administarion have accepted bribes they should be dealt with in accordance with law. Otherwise we are not in CLEAN Maldives as promised by current President.
Gasim has been planning to develop his airport at Maamigili to provide parking and fueling for aircrafts that cannot be accommodated presently at the Male' International Airport.
Upgrading Male' International Airport would definitely going upset Gasim's development plan of Maamigili Airport.
He must be really upset; however, he cannot raise the airport issue in the Majis due to the conflict of interest.
First, I guess the days of anonymous sources are over.
Why can't the name appear to make it more credible. Here in Maldives, the person matters more than the issue as we are very small-minded people.
Second, what's "opposition"? Doesn't the tourism minister belong to Jumhoori party whose leader is this crazy man Gasim Ibrahim?
Third, the previous government tried to give large areas of Maldives to Dubai World. And this man Gasim, Yamin and the other two jokers were SUPPORTING it.
Fourth, if there are shady deals why wouldn't anyone take it to the Anti Corruption Commission?
Fifth, the government does not need the approval of the bunch of idiots in the Parliament who does not know which end of the broom to hold to sweep if they are to do a simple task of sweeping.
And what is the qualification that this man Yamin has to be the "Economist"?
We do not want another 4 million rufiya spend on the usual blabbering about who said what and when and where on the Majilis floor.
Have these people every recognized the positive side of anything that this government has done? No.
What they want to do is to block every step the government takes so that they can go on saying "Oh, Look people! the government hasn't delivered anything.... They are liars... blah blah blah."
Isn't that the chant that the DRPs and their affiliated voices sing since the day this government took over?
But I must say, I am personally very concerned about the airport going to the Indian company. They make a fast buck for themselves and do not care at all about the losses for someone else and they call it business.
We have to go with facts first. The European flights won’t be coming here if the standard level of the airport is up to IATA and ICAO standard. We should all know that all the major carriers are operating to Maldives and there are regular audits done by the major international bodies. And recently British Airways started operating to Maldives after declaring the airport was up to standard.
So Minivan news should check facts before writing something from the so called expert.
I have no qualms with privatization, its just that it was awarded for GMR-Klia. Rather than going for a upfront some its important that during the time the private company controls the airport the profit is shared with the highes margin, namely Swiss Flughafen Zurich AG and GVK Airport Developers would be the best choice.
Maldivians need to realize that Maldives is near bankrupt and cannot invest in upgrading the airport by itself, don't live in self denial.
The way things are going in this country, we would be waving the Indian flag in Muliaage in the next 2 years and very likely the government would flee with at least USD 1billion before they end their term.
I ask everyone to raise an Indian flag in every household. We are now part of India, a district of Kerala Province. (300,000 people does not qualify for an Indian Province)
Whenever something good happen remember always opposition will or try to kill that, that's how world gos civilized. Hope president give out more details and revel everything about this before it's too late. and we hope more experts to talk about this matter. even better if it comes from international level
Facts have to be analyzed and people involved have to be screened for their authenticity on both sides.
As a employee in Male International Airport I am very much surprised that the opposition fails to recognize the urgency to bring a change in airport infrastructure and logistics.
So what’s the situation in airport now? It’s all badly built toilets, dirty looking boarding gates, congested floor areas, leaking ceiling, bad pluming so on and on. It is just a disaster. Quiet often ceiling falls due to rain , floor areas get flooded. Bad architectural design. It’s rather embarrassing to work now these days in the Airport.
It’s worse dhen Yamins, Thasneems and Burma Gaims houses and resorts. Who ever built the current airport obviously have no vision.
So still the opposition is saying the airport is ok to our standards. Amazing don’t u think?
The reality is we have failed ourselves to do it. All those who are now talking against privatization are failed people. Who are they to come and bluff?
However I too don’t support this place going to an Indian company. Just because they are Indians and they are normally a disaster in what they do. And imagine us Maldivian working under their cast system. Disgusting and unimaginable. Can’t work under GM Rao’s family.
However we need to build a new terminal and install aero bridges urgently. If not it will be a disaster in the coming 2 years.
God bless the Parliament and those people who support these morons. President should immediately cut all these subsidies and all the harbours. He should just enjoy his tea, smoke a few cigarettes each day, cruise around in first class, invite high profile leaders to the Maldives, take pictures with them and lastly print money and give raise salaries of all your appointees....then we will soon be in aneh dhivehi raajje.
What a joke. Average Maldivians are idiots who will never vote for Anni - they are igonorant mullas..Anni should stop trying and just leave...Let Maumoon run it...let them do it all...and let the Maldivians rot in this place....So fed up
Is this what Minivan News calls investigative journalism? I am simply amazed at the amount of investigation done... from a single anonymous "aviation expert"!
So who is this so called expert? A guy who travels back and forth from Bangkok to Male' every few months??
No one here is denying that the airport needs upgrading, but stretching your imagination to blacklisting by ICAO??!! What a joke!
Its a good thing this "aviation expert" has remained anonymous, or he'll be laughed out of the town... lynched should be more appropriate.
And all those people still looking at Anni's "heyo verikan" through rose coloured glasses, do you think the guys who made this deal will stick around to see the fate of Maldivians after 25 years? No way! Open your eyes!
Btw, Minivan News should really change your name to "Mouth piece of the government".
Aisha u a correct. Anni better leave this country and give back leadership to Maumoon family. Dhunya Maumoon and rest of the chickens in the family can run this country. Vakin haasako Bangali soru vara moluvaane. like u say Maumoon have done a great job playing the poor maldivian minds.. the Maldivian idiots will belive if Thasneem or any DRP sluts says there is a bigger mountain dhen Everest in Addu now. Thasneem only have to show a pile of sad ..and maldivian idiots will belive its the biggest mountain in the world. What to do .... Bodu balaa ehy dhen meee...
Aisha u a correct. Anni better leave this country and give back leadership to Maumoon family. Dhunya Maumoon and rest of the chickens in the family can run this country. Vakin haasako Bangali soru vara moluvaane. like u say Maumoon have done a great job playing the poor maldivian minds.. the Maldivian idiots will belive if Thasneem or any DRP sluts says there is a bigger mountain dhen Everest in Addu now. Thasneem only have to show a pile of sand ..and maldivian idiots will belive its the biggest mountain in the world. What to do …. Bodu balaa ehy dhen meee
Wonderful! A GMR in country would mean raising Indian flag in Maldives. Could not be funnier. So what do the resorts do each time an English or Italian tourist turns in - starts singing God Save the Queen or gets in Azure colours. LOL, how stupid can the comments be.
No such thing as an ICAO blacklist....
ICAO President Roberto Kobeh Gonzalez last week rejected European Commission VP-Transport Antonio Tajani's call for a global "blacklist" banning airlines for safety reasons, Reuters reported. Tajnai outlined plans for a global list that would be similar to the EU's list of banned carriers following the Yemenia Yemen Airways A310-300 crash (ATWOnline, July 8). "I don't think [a blacklist] is the solution at the global level," Gonzalez said. "Discouraging passengers from going on particular aircraft or particular airlines on certain routes will not necessarily reduce accidents. At present, I cannot be in favor of a world blacklist because I don't have a mandate from the states of ICAO to do this, but I fully agree with Commissioner Tajani we have to work together" to improve safety.