Fees paid “in full and complete compliance with the concession agreement”: GMR

GMR Male International Airport (GMIAL) today sought to clarify the payment of the airport service charges, fuel re-export royalty and concession fees to the government, following reports in newspaper Haveeru that it was undergoing a tax audit due to “inconsistencies”.

Commissioner General of Taxation Yazeed Mohamed was reported in Haveeru as saying that the Maldives Inland Revenue Authority (MIRA) was conducting an audit of the payments as “we looked into the speculations and found that there are some issues with the amounts paid.”

Yesterday, Haveeru reported the Managing Director of the Maldives Airports Company Limited (MACL) Mohamed Ibrahim as saying that the concession fee GMR had paid was US$2.6 million less than predicted.

“The payment was made in the first week of this month. We have informed the company that the amount does not match our estimations. The Finance Ministry has also informed the company that the actual amount would be more than that,” Ibrahim was reported as saying.

GMIAL issued a statement today claiming that concession fees up until March 31 had been paid “in full and complete compliance with the concession agreement.”

“MACL had certain observations to which GMIAL responded on April 11. MACL has not approached GMIAL with any further comments on the issue,” the statement read.

GMIAL further claimed the airport service charge was collected from airlines on behalf of the government until March 31 and paid to the MIRA on April 24, while the fuel re-export royalty was paid to MIRA on April 24 “as per the terms of the fuel re-export agreement.”

“GMIAL has not received any official communication from MIRA, other than acknowledgement of receipt, in relation to the above,” the statement concluded.

Speaking to Minivan News today, MIRA’s Director of Assessment and Audit Aiman Ibrahim said that the audit was “routine, as conducted for all tax types” and that the only inconsistency was that the airport service charge payment “was lower than our forecast.”

“Our forecast for the first three months, based on arrival and departures and factored into our 2011 budget, was that the airport service charge revenue would be US$4 million. The payment for November 25 to March 31 was US$3.9 million, so either there has been an underpayment or our forecasts were optimistic,” Ibrahim said.

The confusion was complicated, he said, “by an administration failure on behalf of the government. The Ministry of Finance was not aware it was supposed to be receiving the money. There is also conflict in the concession agreement: the agreement itself states that the [airport service charge] is to be paid monthly, but an annex in the agreement says payments are to be made on a quarterly basis. GMR had been keeping the money in a separate bank account.”

MIRA had not formally notified GMIAL that it was being audited, he said, as it was a routine audit and no notification was required unless further documentation from GMIAL was required.

GMR had met with MIRA today, Rasheed added, “and were very cooperative. They were concerned about the negative publicity.”

Indian infrastructure giant GMR, in consortium with Malaysia Airports Holdings Berhad (MAHB), last year won a bid to develop and manage Male’ International Airport under a 25 year concession agreement which includes a spend of almost US$400 million on a new terminal.

Under the agreement the consortium paid the government US$78 million upfront, and will pay one percent of its profits and 15 percent of fuel trade revenue until 2014. From 2015 it will pay the government 10 percent of airport profits and 27 percent of the fuel trade until 2035.

The agreement has been a major point of contention with the political opposition in the Maldives, which opposed it on nationalistic grounds.


14 thoughts on “Fees paid “in full and complete compliance with the concession agreement”: GMR”

  1. What is the news value of this write up. If this is news,
    when resorts pay land rent, why is it not made a news item? The only conclusion is that GMR has paid Minivan for this.

    What has the world come to?

  2. Wait a minute, who gave the concession and who you agreed to give this concessions, this is not a property of G, Kenareege, Muhammad Nasheed, he was hired to to do a job by the people to run this country not to sell things in open market with concessions.

  3. This is the best thing President Nasheed has done since becoming President. We have taken more loans to develop the airport than any other sector, besides we have subsidized the Universal, Villa, Champa ,Deen, Sun Travel and Tasmeen by continuing to borrow money and increasing the debt to keep the airport the gateway to the country open. Anni must spend sometime to bring the National Shipping Line moving. This is how Universal made money and Gayoom got protected by Koli Ali Maniku. We can do this again and employ thousands if we develop this sector again.

  4. They waited without paying the fuel surcharge and export royalty for five months due to an "administrative problem". They have increased the charges for the services four or five folds and yet there has been no improvement in the services. Price for domestic flights have been increased five times in a couple of months, directly affecting the locals. These people arent here to invest but to suck our blood.

  5. GMR first ivaded payments claiming that it was not included in the contract. When this issue was brought up, they have paid some amount...but not in full! Now MINIVAN goes on damage control on behalf of GMR. Now let me tell you something. The days are gone when you can whitewash such corrupt happenings in this country.

  6. @Ekaloa

    According to agrement they will upgrade our Airport and agreed to invest US$ 400 Million in it. Do we have this amount. Any company who agrees to invest such a huge amount will demand some concessions. GMR is a reputed company. They dont have magic wand by which they can convert Male airport to Dubai airport. We should give them some time.

  7. @Zeenath


  8. We all can see what is happening. GMR has reduced the security area space and has given that space to their fellow Indians, Air India. They have moved all the Airline’s offices to next floor except Air India.
    The Level of service at the airport has gone down tremendously. Corruption at a record high level now. Airlines like Mega Maldives gets its slots approved from Presidents office and they are virtually untouchable while local airline, Maldivian, face high fuel and aircraft hangar space costs.
    Almost 6 months now but nothing to show for it. All costs, fees and rents at airport rocketed up and service the level going down at the same speed.

  9. This is indeed a corrupt deal by corrupt officials in the Maldivian government with a corrupt management at GMR. Just like @Aharen said, they first tried to show excuses saying they had to 'review' the agreement and so on. Looking at the billion dollar corruption scandals in Indian courts now, we can see how these "reputed" companies operate.

    Now since the Indian Supreme Court has ruled that Airport Development Charge cannot be taken from the passengers departing Mumbai Airport, we would see more increases in charges and fees at Hulhule Airport. We will see more excuses coming up in the future. More evasions and more bribery allegations.

    We are awake GMR! and we will not let u do these things!

  10. First of all a country that is dependent on all countries cannot speak like this.

    You guys do not have a single money to spend for the country or have money but do not want to spend.

    And someone comes to your country for making such a big investment then you make a hue and cry

    I think once people stop coming to this location, you locals who have resorts and are ripping & snatching money will realise and all resorts so high a water bottle 2$

    You guys can rip off and some one who is taking money and developing u want to critisise

    I think now all countries should stop funding this country and ask there money then you will know when you have to pay some billions

    Just keep quiet

  11. @ Ramany: wherever you are from, you cannot tell us when to keep quiet. We won't. We may be a small country. Yes we are dependent on the aid of countries like India and we are grateful to their governments and people. All the countries in the world are interdependent.
    But as human beings we cannot tolerate corruption and some business giant coming here and breaking our laws. If GMR is to do business here, do it right, respect our laws, and be considerate about local businesses and companies. And invest in the airport before increasing prices and charges by 400%!

    This has nothing to do with india. We are only saying the deal with GMR (which happens to be an Indian company) is suspicious and involves many unanswered questions.

  12. In case you are a foreigner and have not been following local news, there was huge opposition against awarding the contract to GMR even before the contract was signed. The contract was signed in spite of all this. So the cry continues. . .

  13. Yeah Ramnay, we cannot tolerate corruption as long as it is one of our patrons who is corrupt, then we shall pretend it didn't happen and point out something unrelated. Any suspicion or allegation which favour our pre-defined and prejudiced views we shall lap-up as irrefutable evidence and willfully ignore anything to the contrary. We hang on to every bigoted word our patrons spew with sycophantic awe but an equal measure of impertinence and scorn we shall dish out toward their opponents. We are strong, we are brave and we are smart. We shall never allow anything like good judgment, or rationality cloud our decision making capability.

    Our good sense sense of justice and morality for the more equal among us is unquestionable, as is our xenophobia toward the less than wealthy.

    So you may eff off Ramanay.


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