MATATO expresses concern over airport outsourcing deal

The Maldives Association of Travel and Tourism Operators (MATATO) has expressed concern regarding rumours that a private Jet terminal and aeronautical services facilities at Malé International Airport will be outsourced exclusively to a foreign company.

“MATATO is very concerned that this will create an unhealthy market structure and put many local companies at risk,” read the statement.

Minivan News has learned that the cabinet’s economic council is currently discussing a deal with billionaire Thai businessman William Heinecke.

American-born Heinecke’s Minor International hospitality chain is reported by Forbes to consist of 1,500 restaurants, 100 hotels, and 250 retail outlets spanning 18 countries – including the Maldives’ Anantara resorts.

MATATO, which represents more than 50 local businesses, revealed that it had been approached by a number of concerned members whom it believed would suffer as a result of such a deal.

“Presently there are many local businesses that act as supervision agents, and ground handlers for the considerable corporate and private jets that visit Maldives year round. Many of these local companies depend solely on the income generated from this business,” read the statement.

The association requested that all stakeholders begin a dialogue that might consider alternative arrangements to an exclusivity deal which it suggests lacks market competition, leading to poor services and “consumer exploitation”.

“The absence of competitive pricing that benefits the consumer, allows companies with exclusivity rights to charge higher prices for services, and inconvenience buyers.”

Following the purchase of both the Maldives’ seaplane operators by US private equity group Blackstone last year, hospitality groups revealed a subsequent raising of prices and reduction of services, reporting a potentially negative impact on industry profitability.

MATATO today argued that the airport deal would “only lead to unnecessary outflow of foreign exchange, loss of job opportunities for locals, a significant amount of control of the local market to foreign bodies, among many other negative factors.”

Alternatives suggested by MATATO was for the current management of the airport – the state-owned Maldives Airports Company Ltd (MACL)  – to retain control and upgrade the facilities itself.

MACL took over management of Ibrahim Nasir International Airport (INIA) following the premature termination of the Indian company GMR’s 25-year concession agreement by the previous government.

Shortly after winning the presidency last year, President Abdulla Yameen pledged to redevelop the airport with new foreign investment, while the government would retain the overall management of the airport.

The expansion of INIA – to accommodate five million passengers per year – subsequently featured among the ‘mega-projects’ presented to international investors during a landmark investment forum held in Singapore in April.

Shortly after the Singapore forum, the Maldivian Democratic Party – in power when the original GMR deal was signed – called for GMR’s reinstatement, vowing to annul any new airport contracts should it return to the power.

GMR’s US$1.4 billion arbitration claim was also concluded in Singapore in April, though the court has yet to announce a verdict.

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