INIA capacity will increase threefold with new runway and terminal, says economic council

Additional reporting by Hassan Mohamed

The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.

At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.

“The previous development concept was only for the development of the terminal,” says Saeed.

“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”

After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.

“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.

Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.

The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.

The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.

Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.

In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.

The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.

The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.

Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.

Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.

Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.

GMR Compensation

In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.

A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).

The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.

However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.

The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.

Chinese arrivals

Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.

However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.

“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.

Related to this story

Government seeks US$600 million from China and Japan for airport development

Tourist arrivals decline in January as Chinese arrivals slow down

GMR wins arbitration case, tribunal deems airport deal was “valid and binding”

Police arrest former President Mohamed Nasheed ahead of terrorism trial


4 thoughts on “INIA capacity will increase threefold with new runway and terminal, says economic council”

  1. The timing of this speech of the lucrative fine details of major airport developments in just two years (not forgetting the bridge and the youth city) is questionable. Too good, too sweet to be good.

    We in businesses that pay a major role in our economy know more than what the hon.minister read from his well written speech.

    1)We have maybe another three to five year max, before we loose the chinese market. If you need proof, ask those who invested during the Russian influx. Shopping and sightseeing are two key features to drive the chinese crazy, but Maldives will never achieve that status unless UAE drowns under sand.

    2)Emerging markets in Asia and Africa have lured middle class tourists. Seychelles didn't have a dollar in its revenue just ten years back, but now tourism, fishing and manufacturing industries are booming. Ask Universal Enterprises, Champa and other rich Maldivians who have invested millions in hotel industry. Actually, Maldivians own more than 60% of tourism in Seychelles.

    3)We call them names, evil, thieves, because they are white or jews and mostly christians or believe in freedom of worship. We find commonweaith a useless body as much as we look down on IMF and world bank.
    The same white christian/jewish whatever are the people who built our tourism, the people who come and spend millions in Maldives, yet we tarnish our relationships hoping for what? Chinese tourists for next twenty years?, Even if the chinese come more, the expenditure doesn't change much and a poor maldivian doesn't benefit

    4) Loans? we haven't addressed the loans either Gayoom, Nasheed or Waheed created. Neither have we woken up to the worst international court case on GMR. GMR is Indian and the Indian government will never let go their penny..sooner or later they will squeeze our balls till they pop out of out teeth less mouth.
    Europeans and Americans still control fin ace in the world and you bet, they will make us another Putin and our little fish will have no where to sell

    5)Unrealistic time frame of 2017. If we had 5 billion dollars we may achieve maybe one or two projects but not what the minister detailed. We can't build the airport, youth city, the bridge, the runway, SEZ islands, in just two years!!!

    I am neutral when it comes to economics and facts about our daily bread. Please, the government as well as opposition should stop playing mind game to these poor souls who are left to spend more time believing that one day God will provide. It has nothing to do with religion. You don't pay your bills, stelco, mwsc, dhirragu, mesco will disconnect services instantly!
    Gayoom, Gasim, Nasheed, Yamin, are filthy rich people with enough money to live anywhere in the world now or in the next 50 years. MPs are busy making money with families migrating to Malaysia, Singapore or Australia. Religious clerics are well taken care of by our brothers in the Kingdom and oil rich deserts. What was to be the voice of the people MAJLIS is for personal goals and revenge.

    It leaves us with 90% of the population who MUST borrow to survive, MUST lie to make a buck and thus the corruption we find in every aspect of life in Maldives today. These 90% of simple minded people will one day go HUNGRY to an extent that rage will gradually build and violence and disobedience will be the rule of the day as we see it in Africa and some Asian countries.

    27th February 2015 may as well be the beginning to a horrible future or an establishment of true facts affecting everyone and not a few political figures. I am scared to death, not for my life but for the thousands of sweet little kids you see at mid day coming from school…so cute so sweet little do they know their future is bleak and Europeans or Americans won't blink an eye when the time comes.

    No politician in this country deserves to be called a politician.

  2. @ Facts

    What nonsense man.

    If Maldivains own more than 60% of tourism in Seychelles, its already a colony.

  3. i agree most part of "FACT comments this time. except about seychelles .

    Maldivian only have 3 hotels in total there and one is owned by Universal and 2 is owned by Afeef. If this contributes to 60% of the country tourism then i don't know how, when there are 60 Hotel in the country.

    Seychelles fisheries industry is being sold to a Spanish company for 100 years and there is not benefit that will bring to the country for next 70 years. That was similar corrupt deal like GMR deal by Nasheed.

    There are no manufacturing industry at all in Seychelles ,

    However i agree that 10 year before there we no dollars in their reserve and country was virtually bankrupted and they got into this mess by listening to some corrupt institution like the people who played with us during GMR deals.

    They came out from the shit after studying how Maldives managed the economy and our tourism industry.

    Today tourism industry in seychelles is booming and that is why the country economy is growing and nothing else is there.


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