After months of political wrangling and counter allegations, as the clock turned one minute past midnight this morning Indian infrastructure giant GMR took the reins of Male’ International Airport as part of an overhaul it claims will help “increase the brand value” of the Maldives.
In a consortium with Malaysia Airports Holdings Berhad (MAHB), GMR says it will kick start a 180 day programme to try and improve service, efficiency and profitability of the site ahead of an US$511m expansion project that includes the construction of a new airport terminal by 2014.
The airport consortium, which saw off competition from a number of rival bids to win a long-standing contract to privatise the running of the country’s central transport hub, made a point of trying to offset concerns about the intention of foreign ownership and its potential impact on Maldivian workers.
“The airport belongs to the people of the Maldives,” said Kiran Kumar Grandhi, Business Chairman of Airports for the GMR Group at a function to commemorate the new management structure. “This consortium hopes to bring the best of technology and architecture and service to the airport.”
A coalition of opposition political parties formed an alliance back in June designed to try and protest against the deal on the grounds of nationalistic interests that included mps from the Dhivehi Qaumee Party (DQP), Dhivehi Rayyithunge Party (DRP), Jumhooree Party (JP) and the People’s Alliance (PA).
However, speaking during today’s handover ceremony on Hulhule’ Island, Mahmood Razee, Minister of Economic Development and a Maldives Democratic Party (MDP) member, claimed that the privatisation of the airport is aimed to directly benefit Maldivians as well as foreign travellers.
“It [the airport] belongs to all of us, to all Maldivians,” he said.
Razee stressed that the government would therefore continue to work with the shareholders of the airport consortium even under “difficult circumstances” such as parliamentary debate and legal wrangling. The Minister of Economic Development added that he views privatisation across the nation’s transport networks and economy as vital for future development.
“We have worked with the private sector,” he added. “We will continue to work with the private sector.”
The comments were echoed by President Mohamed Nasheed who said that the levels of requirement investment required at the airport, which he claimed could be called “the Bucket International Airport”, were substantial.
According to figures given by the president, at least US$300m would have been needed for the development from a government budget that he said was already stretched spending Rf1 billion on existing loans.
As the urgent need to develop the airport was “an undisputed truth” accepted by all, President Nasheed continued, vowing that the government “will not let anyone obstruct the country’s development.”
Airport opposition
DRP Leader Ahmed Thasmeen Ali told Minivan News that a coalition of political parties formed in opposition to the GMR airport deal remained committed to a Memorandum of Understanding (MOU) focusing on legal recourse to try and prevent the privatisation agreement.
Despite the handover already having taken place this morning, the opposition leader said that the coalition of political parties hasn’t yet “exhausted legal avenues” related to their opposition of the privatisation.
“We simply believe the deal is not in our national or security interests,” Thasmeen said. “With the privatisation of other [existing or soon to be] international airports in the north and south of the country, the state will not have an airport under its control.”
From a stand-alone DRP position, Thasmeen said his party was not strictly against privatisation, but the party would judge any new business propositions put forward by government on a case-by-case basis.
Debate over the issue of privatisation has raged for many months for and against allowing privatisation since GMR and MAHB were first contracted to oversee the airport expansion project back in June.
Deputy Leader of the DRP, Umar Naseer, told Minivan News on June 28 that ” if [the operators] allowed it, an Israeli flight can come and stop over after bombing Arab countries.”
The government has alleged that opposition to the airport deal stems from the “vested interests” of certain MPs, several of whom it arrested following the resignation of cabinet on June 29 in protest against the “scorched earth politics” of the opposition-majority parliament.
Initial 180-day plan
Beyond possible ongoing political and legal discourse, Andrew Harrison, new CEO of GMR Malé International Airport, pointed to greater efficiency in the day-to-day service of the airport as a key focus for the first 180 days of management.
As part of this programme, Harrison announced that an expansion of capacity at the airport was immediately required to allow for more flights to be handled simultaneously. In addition to customer handling capacity, a number of new x-ray scanners and service counters are also set to be provided over the period to speed up waiting times during check in and departure, he claimed.
Beyond operational commitments, Harrison said that the 180 day programme also aims to make a number of changes to the look of the arrivals and departure plaza.
This cosmetic overhaul is expected to include a number of new eateries and retail outlets to be situated across the site and also alongside the waterfront in a bid to boost the “guest experience” and play up the local environment.
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An urgent revamp to the airport is indeed urgently critical to sustain the competitiveness of the Maldives tourism industry. However, as a proponent of privatisation, I doubt if this deal is done with the maximum benefit and the maximum return that people of the Maldives could garner in the long run. On the other hand, I don't fully agree with Thasneem's view point that government should involve in businesses. But I do agree that there are crucial issues such as security, economical impacts that needs to be considered, specially when leasing a valuable asset for such a long time.
Its not privatisation but the way in which it was done that raises questions. It was things like asking the previous Chairman of Airport company to sign the agreement while refusing to give him details of the deal; and replacing the chairman with First Lady's uncle and getting him to sign the deal the very day he took office. Anni would have cried foul at the top of his lungs over things like this if he was not the one doing it. We seem to have gone full circle and ended up with a GOLHABO AS LEADER ONCE AGAIN.
@Rinzy:
It's not that Nasheed has become another Golhaaboa. This is a very different case.
The privatisation programme was actually run in partnership with International Finance Corporation, an arm of the World Bank, which is highly respected all over the world.
As soon as the opposition realised that the Airport could actually be privatised, they woke up from their sleep and started their fight. President Nasheed had to speed up the process in case the opposition totally scuppered the whole thing.
Nasheed's political enemies were trying deperately to sink this deal, not because of their love for the country, but out of their own personal self interest!
This is NOT going back to Golhaaboa or anything of that sort!
GMR, you have my support and of many others. We are going through difficult times in Maldives so your successes in the first 180days would prove the opposition wrong.
I have seen airports that have been developed by GMR and I am very optimistic.
Good luck
yes...i do not think that we are going to end up with another golhabo!
When we talk of the airport deal we need to talk about income to the GOM from Corporate tax. Profitable PPP's result in additional revenue to the Country. Tax bill is very crucial.
corruption is rampant and this country will fail just like every nation in a very near future.
markets will collapse and the airports and all other resources will truely be of peoples and not corporations.
Why is Mr Nasheed still co-operating the same people who let down this airport to the current status.
Why did MACl board gave authority to buy 3 vehicles worth 500000 to these corrupt officials while the departments are struggling for there transport.If im not mistaken one of these vehicle is unable to get register from transport authority.
With the authorization from macl board these corrupt guys even cant make simple deal legally.
Any way.... Time will tell.
This is a shameful deal.
GMR said they will make Maldives proud with the GMR aiport!
How?
For 25 years we will have the same runway?
For 25 years we will have no proud moment to see an A380 aircraft land in Maldives?
Is this how they will make us proud?
The world's airliners are quickly renewing all their aircrafts to A380.
At the end of 25 year lease give us the skeletion of an exhausted wrecked airport.
I AM PROUD OF OUR HALFWITTED PRESIDENT!
I smell ganja!
NO Maldivian will ever be PROUD of Bohra merchants!
Only ANNI will be proud.
@Ahmed Bin Addu Bin Suvadheeb
I humbly request you to check your facts regarding the background of World Bank/IMF. I assume you will know it.But if you don't know it might help you to understand who controls these 2 institutions and whose interests are their main priority.
@heck
you are a descended from Bohra traders?
@Heck
Why are you so negative? Give chance to GMR guys. They have a good reputation. They dont have magic wand to turn everything goody-goody over-night. According to media, GMR is suppose to build and operate a modernized airport by 2014. Do listen to what opposition parties say but also use your mind.
What are u all shouting for? Indian Hospitals, Indian Doctors, Indian Nurses, and Indian Teachers have always been fine in Maldives. plus Indian women are fine to marry, which a lot of Maldivians have been doing. So whats wrong with GMR..??
Tell DRP and the opposition to stop yelling and to look closely and learn carefully.
And kasauti too is good for us.
US$511m is a huge amount. I can't think of a good reason why GMR wants to put up that much in Maldives (with so limited earning opportunities and so much political/local opposition to face). They could have easily utilised this amount in an Indian airport and made bigger margins.