The Transport Ministry has said the government is “fully behind” an order given by the Maldives Airports Company Limited (MACL) to India-based infrastructure giant GMR, that it pay the sum of US$8.2 million deducted from concession fees for the first quarter of 2012.
GMR took over the management of Ibrahim Nasir International Airport (INIA) – then called Male’ International Airport – from the government-owned Maldives Airports Company Limited (MACL) in September 2010.
Speaking to Minivan News today, Minister of Transport Dr Ahmed Shamheed said the government fully backed an MACL order for GMR to return the US$8.2 million it deducted from concession fees for the quarter.
According to a statement released by the MACL earlier this month, the company said it had only received US$525,355 out of an expected US$8.7 million in concession fees for the first quarter of 2012, after GMR deducted the Airport Development Charge (ADC) and insurance surcharge.
The ADC was intended to be a US$25 fee charged to outgoing passengers from January this year, as stipulated in the contract signed with GMR in 2010. The anticipated US$25 million the charge would raise was to go towards the cost of renovating INIA’s infrastructure.
The deductions were made after the Civil Court blocked the India-based company charging an Airport Development Charge (ADC) last year, on the grounds that it was a tax not approved by parliament. As the ADC was stipulated in the contract former President Mohamed Nasheed’s administration had signed with the airport operator, the government at the time agreed that GMR would deduct the charges from the concession fees due the government, pending appeal.
The Civil Court case had been filed against the airport by the former opposition Dhivehi Qaumee Party (DQP) – now part of President Mohamed Waheed Hassan’s coalition government.
Parliament’s Finance Committee has meanwhile revealed that the Maldives is facing a skyrocketing budget deficit of 27 percent for 2012, and a parallel 24 percent increase in expenditure.
Last week, GMR released a statement proposing a compromise to the government whereby Maldivian nationals would be excluded paying the ADC when departing the airport.
MACL Managing Director Mohamed Ibrahim told local media today that MACL’s agreement with GMR under the previous government to deduct the ADC payment was “null and void”. Ibrahim told reporters that the deal was no longer relevant as it had been agreed by a former MACL chairman, and that charges could therefore no longer be deducted from GMR’s concession payment.
“We had informed that the letter from the former Chairman of MACL was now invalid and hence must not be followed. In addition we had also informed that no deductions can be made from the concession fee,” he told local newspaper Haveeru.
Ibrahim was not responding at time of press.
The MACL order was announced the same day that President Mohamed Waheed reportedly assured Indian Prime Minister Manmohan Singh that the government would uphold its commitments to foreign investors.
“It is only recently that the Maldives began working with large foreign corporations, and hence the Maldives has not much experience in dealing with large companies. That’s why we are currently trying to iron out some of these issues through mutual dialogue,” President Waheed said.
Transport Minister Dr Shamheed however told Minivan News that the President’s pledge would not affect MACL’s decision to order GMR to pay the deducted US$8.2 million.
“As per the concessions agreement, a fee has to be paid to MACL. That is my understanding,” he said.