The Anti-Corruption Commission (ACC) has ruled out corruption in the awarding of a concession agreement in June 2010 to a consortium of Indian infrastructure giant GMR and Malaysia Airports Holdings Berhard (MAHB) to develop and manage the Ibrahim Nasir International Airport (INIA).
In a 61-page investigative report (Dhivehi) made public yesterday (June 17), the ACC concluded that the bidding process was conducted fairly by the World Bank’s International Finance Corporation (IFC) and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.
The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.
The amendments were published in the government gazette after the concession agreement was signed, the ACC noted.
The concession agreement was signed on June 28, 2010, while the amendments were gazetted on December 13, 2010, following a Supreme Court ruling. The amendments were voted through for a second time in August 2010 following a presidential veto.
On the previous administration’s decision to replace the board of directors at the 100 percent government-owned Maldives Airports Company Ltd (MACL) – after they refused to sign the concession agreement claiming insufficient information – the ACC observed that there was “no legal obstacle” for the move.
The ACC report also concluded that the government would benefit more from privatising the airport.
“Considering the situation (2008, 2009 and 2010) when the decision was made to privatise the Male’ International Airport,” the ACC’s calculations showed that MACL would make a profit of about US$254 million in 25 years if the airport was operated by the government-owned company.
Conversely, the government would receive about US$534 million in the same period from the GMR consortium if the airport was privatised, the ACC found.
The privatisation of the airport by the ousted Maldivian Democratic Party (MDP) government in June 2010 was strongly condemned by opposition parties on nationalistic grounds.
The Dhivehi Rayyithunge Party (DRP), Peoples Alliance (PA), Dhivehi Qaumee Party (DQP) and Jumhooree Party (JP) signed an agreement to work against the privatisation process and launched a media offensive alleging “massive corruption” in the awarding of the contract.
The ACC report this week meanwhile followed a special audit conducted by the Auditor General’s Office with the assistance of a British consultant concerning the airport privatisation deal.
The AG’s report stated that evidence to back allegations of “improper interference” during the technical bidding process “is not conclusive on this point” and deferred the matter to the ACC.
The AG’s report also noted that the IFC’s terms of reference involved “securing the best deal for the government in terms of the concession fee paid to the government and MACL, and did not consider impacts on the Maldivian economy.”
Government stance
In November 2012, the current government – made up of a coalition of parties opposed to the MDP government’s privatisation policy – declared the concession agreement with the GMR-led consortium “void ab initio” (invalid from the outset) and abruptly terminated the contract.
In April this year, the Attorney General’s Office confirmed that arbitration proceedings resulting from the contract cancellation would begin by mid-2014.
Responding to the ACC’s findings yesterday, the government insisted that the report would have no impact on its legal position to declare the GMR concession agreement void, contending that President Dr Mohamed Waheed’s decision had nothing to do with corruption allegations levelled by “some people”.
President’s Office Media Secretary Masood Imad told Minivan News that the contract was declared void from the beginning due to the negative impact on state finances in 2012.
“Back before the government took back control of the airport from GMR, the reason we gave was that the deal was bleeding the country’s economy. We were paying GMR to keep them here,” he explained.
Masood said that despite “speculation from some people” concerning corruption by the former administration in signing the deal, the present government was not responsible for filing a case with the ACC.
He added that the government’s concerns over the deal had been in relation to the imposition of a US$25 Airport Development Charge (ADC) by GMR that was blocked by the Civil Court in 2011 after the then-opposition DQP filed a case on the matter.
The DQP, now part of President Waheed’s coalition government, attempted to block payment of the charge on the grounds that it was effectively a tax not approved by parliament.
In response, the MDP government agreed to deduct the ADC from the concession fees payable, while GMR later offered to exempt Maldives nationals from paying the ADC as it moved to appeal the verdict.
However, former President Mohamed Nasheed resigned under controversial circumstances on February 7, 2012 amidst a violent mutiny by elements of the police and military before the Civil Court verdict was appealed at the High Court.
Consequently, in the first quarter of 2012, Dr Waheed’s government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.
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Where is Mody / Kuribee / Tsk Tsk now?
I said it then and I'll say it now. You are more stupid than a retarded donkey.
Reap what you sow f*ckwits.
now who is going to bay to GMR only we poor tex payers. where is gayoom and gasim
In later news, goat herding Mullahs have been jumping up and down promising hell fire to members of the ACC.
This is the nail in the coffin of the Mullahs, I'd say. There was never any doubt about corruption regarding the GMR deal. However, it was not a good deal for the country. Even now, MDP and Nasheed is touting the fact that GMR brought in more revenue.
They don't mention exactly how that extra revenue was coming. The ugly truth is that the extra revenue stream GMR generated was sourced from punitive taxation of the airlines (fuel and landing charges) as well passengers using the airport! These had long term negative consequences. Some long haul airlines cancelled direct flights to the Maldives as a result of these strong arm tactics by GMR.
In summary, there was no corruption, but the deal was a poison pill for the Maldives.
The whole point was to get control of the funds so corruption can take place. The bottom line never mattered because it doesn't reach the people.
To the multi millionaires the difference was 500 mil to the country or 200mil in their pocket.
No corruption involved... but illegal according to the constitution
@Anthu May be it was deemed illegal because there was no corruption involved.
Report just talks about two situations - when airport is run by Government agency and when it is run by GMR consortium. Where are the calculations when airport is run by some "prospected" Chinese firm and when it is run by Gayoom's family.
Prime example of a dog licking its own balls!
It was not the deal with GMR that was corrupt!
Sovereignty was being lost! Now the airport is in sovereign hands!
All flights to INIA can be routed to Maamigili and Gan!
Hulhule should grow imported grass to feed camels who can be left to eat and fart freely!
The elder ones can be slaughtered for the Mullahs while the young can be used to defend!
Camels, when their dalls are whacked with a mallet can send their scud missiles up anywhere!
CIC Waheed will give the orders and Mullas Imran, Ilyas, Shaheem and their likes will obediently execute!
This should be a better deal than the one had with GMR!
The fact of the matter is that it was not just finances which was holding the airport development back, it was that management expertise, lack of management expertise rather. Besides no institution was or will ever lend credit to a wholly owned government company of a country synonymous with corruption. Especially since the airport operator has consistently proven its incompetence over the decades.
For the detractors who are caught up in the zero sum calculations - please consider the added value and revenue generation potential of retail facilities, spas, restaurants and other services.
Millions of dollars of taxable revenue was possible with the swanky new facilities. Airlines which were dropping out due to increasing prices would be forced to return to where the superior facilities were, where the customers were.
The airport had the potential of serving more than the local and tourist needs, with over crowding in Mumbai or Delhi, Hyderabad, Male had the potential to ease congestion by serving as a connection hub between Mid East/Africa and East Asia/Australia. It is not far fetched, some of the bigger airports are GMR operated, would have been a win win for every body.
The only reason GMR was tossed out was to create the ad hoc "management" where the revenues flowed to public coffers only after the kleptocrats had their share.
GMRs only folly was to underestimate the determination of these crooks. Cannot blame them, their management thought rationally, little did they expect the government to make such an irrational decision.
What a complete disaster. Well done coup dictatorship and Waheed!!!
Anthu, your constitution legalizes child abuse and state-sponsored rape.
ACC needs to investigate corruption and deception that started religions.
For better or worse, people must know the truth. The wars are fought for money. Hunger and poverty can be reduced if people love each other as humans, and not religions.
@Patriot on Tue, 18th Jun 2013 11:05 PM
"All flights to INIA can be routed to Maamigili and Gan!"
Actually, you've got a very good point there. Leave Hulhule to Imran and other fake Mullahs to wage their wars over.
In the meantime, Maamigili and Gan will prosper as world class airports away from the headlines. A very good solution indeed. Gasim and Champa will share their wealth with the local population; well a bit of that wealth will treacle down to the masses. Hey, can we ask for more?
fcu
IT IS SHAMEFUL..THESE POLITICIANS FOR THEIR PERSONAL PROFITS...SELL THE ECONOMY OF A WHOLE COUNTRY..DIRECTLY OR INDIRECTY IT EFFECTS TO LOCAL PEOPLE..NOT TO THESE...GREEDY POLITICIANS....ALL THESE POLITICIANS IN MALDIVES WHO PRETEND TO BE MUSLIMS AND FOLLOWING ALL RULES OF ISLAM...THEY DON'T KNOW THE MENAING OF ISLAM..ISLAM NEVER TEACHES TO CHEAT PEOPLE..ON TOP OF IT THESE MALDIVIAN POLITICIANS GOING TO RESORT TO HAVE FUN AND ALCHOL..AND IN FRONT OF PUBLIC PRETEND TO BE VERY GOOD.
ACC's report is based on outdated data when all duty free shops were operated by cronies of Gayyoom. Now after the take-over, all duty free shops are operated by MACL which has nearly doubled its income. Now MACL should sell equity shares of upto 51% to the Resorts who can collect $25PP to back their equity share. As it is the Tourism Industry which will be effected with any changes in the traffic to INIA, it should be them who who should put up the equity funds required to develop INIA and they do not require the majlis approval to charge $25 from every tourist not as a tax but transfer surcharge or similar charge. Balance shares could be sold to expert airport operators like FRAPORT of Germany and 25% should be held by Airports authority so that policy decisions of INIA could be made only with their involvement. All airports managed by GMR in India ie Hyderabad and Delhi airport, the Indian airports authority hold 26% share for this reason
@Ahmed Bin Addu Bin Suvadheeb on Wed, 19th Jun 2013 5:44 AM
"Gasim and Champa will share their wealth with the local population; well a bit of that wealth will treacle down to the masses."
True, bits and pieces of that wealth will treacle down to the masses. But that would only for a selected mass who perhaps sign on to JP just to wet their beaks I guess!
As an Indian, it is pretty disheartening that the local people will have to suffer the consequences.
As far as I see it, you guys dont trust the system at all...institutions that are supposed to be neutral is bred with politics and distrust. Your media secretary told Indian media that ACC is biased and has a political agenda.
Unless you people can differentiate between politics and investment and not mix it all the time Maldives will never become an investor destination.
What we are not happy about is the lack of professionalism and trust on the part of the government when it kicked out GMR- Malaysia holdings. An international contract that was sealed and signed was torn apart without a second thought.
Until you understand the difference between a private company, its government, your government and domestic politics and not mix up everything will things proceed.
Nationalism is an Archaic concept. In todays day and age business, prosperity and welfare of the people should be considered over nationalistic pride. OPEN MARKET people! Let the most efficient firms run the business so the consumers can reap the benefits!
Yeah you can let an inefficient Maldivian firm run it at higher cost and be proud to call it "Maldivian" but who gets the short end of the stick? The people using the service.
Yes no corruption ? what a joke is this ?
ACC is saying that some of the people who had involved in the bid evaluation was saying that they can not remember how things had happened ? For ACC , the report concluded that the process went without any corruption when people involved were saying that they can not remember how things had gone during bidding process ?
GMR was disqualified in the first round and then they were asked from the back door to go and get someone who are qualified to join with them and that is why Malaysian company joined with GMR.
In the first round Malaysian company was not there and they appeared in the second pause ?
Still ACC can not find this truth ?
If ACC investigation is just based on just the feedback that they get while doing an interview without using the proper investigation techniques, then i doubt that they can find anything wrong doing here.
Who is going to tell or commit thier crimes just because someone asked whether they had committed or not ? No one will say yes just because ACC guys just questioned ?
Nasheed and his associates had taken huge bribes in the process to award the contract and GMR is still financing Nasheed .
ACC itself is being corrupted .
Nasheed says that he believes ACC and audit reports ?
What about the audit report where it has shown over 450 million s raffia corrupt deals that were mentioned in recent past reports ?
I guess those reports can not agreed since it is against Nasheed and his cronies .
As usual anything in favor of Nasheed is correct and credible and anything against Nasheed and cronies are illegal.
What a double standards these idiots have ?
Ha ha bloody ha ha.....this is a great result!!
I hope the GMR episode will be a salutory lesson for Indian companies to stay clear of the Maldives and not invest another rupee in this corrupt, politically unstable and very tiny country.
Hey, why don't you retards get your sunni mates in Pakistan to build your airports, schools, hospitals, roads and drug dens eh?
You guys have so much in common, you are like twins separated at birth.....the Pakis even share your fantasies of believing you are descendents of arabs which you clearly are not.
The Indian embassy should also close down the visa section in Male and hang a sign on the gate saying FOR MEDICAL AND STUDY VISAS PLEASE GO TO THE PAKISTAN EMBASSY.
Where indeed is that ponce Kuribee?
@MissIndia
Why don't you go and solve the flood problems in your own country area where half of it's population is under water, without food and transport instead of putting your head in to our problems!
The ACC itself has said the report will not affect the arbitration process concluding this will really affect Nasheed and his party into wining the elections! This shows how corrupt the whole of Maldives is with it's greedy politicians where the public just do not have a clue on who's telling the truth and who is lying!!The public is fed up of this!!What in the world is going on!
@Miss India,
Lol...And i hope you try to find a solution into those rape cases of children and tourists in your civilized country where the most successful movie stars are Muslims contributing to charity!