Indian infrastructure giant GMR has said it “categorically refutes” claims made by the government to international media today that it had agreed to vacate Ibrahim Nasir International Airport (INIA).
The government yesterday dismissed an injunction on GMR’s seven day eviction notice granted by the High Court of Singapore, and vowed that the airport would be run by the state-owned Maldives Airport Company Limited (MACL) by December 7.
A Finance Ministry official said on condition of anonymity that GMR had agreed to vacate following “informal communication.”
“It’s unofficial. They are even selling off their items at a cheaper price. They have given 40-60 percent discounts. They are selling off whatever they can sell off from here including iron bars, concrete, and cement. So I think there won’t be any confrontation or any such nature. All the department heads and senior staff will start working for the Maldives Airports Company Limited MACL from December 7,” the official claimed. “Even though they maintain in public they are not going to vacate, they are going to vacate.”
President’s Office Spokesperson Masood Imad meanwhile told reporters that “Whatever the financial implications on their investments, we have already filed a case in Singapore court for arbitration. We will pay the compensation, what we have to pay.”
However CEO of GMR Male International Airport Limited (GMIAL), Andrew Harrison, said that while GMR had met with a delegation from the government at 11:45am this morning, “we did not agree nor state our willingness to hand over Male’ airport.”
Harrison told Minivan News that he had been advised by a Maldives National Defence Force (MNDF) Colonel at 11:03am that Defence Minister and Acting Transport Minister Mohamed Nazim wished to meet him personally.
“The meeting was attended by the Acting Transport Minister, the Chairman of the Maldives Civil Aviation Authority, our lawyer in the Maldives and three members of the MNDF,” Harrison said, in an emailed account of the meeting.
“The meeting was cordial and the Acting Transport Minister outlined the following: that MACL would be operating the airport from Saturday morning in line with the Government of Maldives communication to GMR-MAHB; that the Minister would like a smooth transition as the airport operations should not be affected or suffer in any way; that passengers should not be inconvenienced and therefore all activities including Duty Free would be allowed to continue as is.”
According to Harrison, Nazim informed GMR that “According to their legal advisors the injunction issued by Singapore High Court does not prevent them from taking over the airport and the injunction cannot be applied to a sovereign state.”
Nazim had furthermore proposed offering “100 percent employment in MACL to all staff currently working for GMIAL and an announcement to that effect made tomorrow by the MACL Board .The offer includes both local and foreign staff at their existing terms and conditions including salary,” Harrison stated.
“Our position, which I communicated to them, remains crystal clear. The Singapore High Court has issued an injunction which clearly prevents MACL or the Government of Maldives or any of its agents from taking any action that interferes with GMIAL operating the airport. The injunction clearly prevents them from taking the action outlined in their notice issued to us stating that the airport would be taken over at the end of the seven day period. We remain resolute in our position and there is no question of an offer being made and certainly no question of any alleged offer being accepted as we will simply not agree to our rights nor the injunction being undermined in any way.”
GMR’s lawyer had advised that the injunction was to be was to be honoured “as their representatives and the Attorney General [Azima Shukoor] were party to those proceedings and were present during the proceedings in the Singapore High Court.”
“Further to this we have issued a communication to their lawyers to confirm that their client (MACL/GoM) will not ignore the injunction and outlining the consequences as well as the disturbing media reports that they will ignore the injunction and take over the airport as planned,” Harrison stated.
Nazim had explained that “as he was not a legal person” he would arrange for a legal team to meet GMR’s representatives tomorrow, and pledged to “maintain dialogue”, Harrison said.
“We will always maintain dialogue but our legal position is very clear and we will not compromise on our legal position which is clearly supported by the injunction.”
Moreover, “any version of the meeting being described any differently to my response is categorically untrue and we maintain that we have been granted the right to continue operating the airport in line with the injunction. There is and has never been any change in our position.”
Harrison added that Nazim had also said that “no force used to take over the airport” and that “media reports that the MNDF would take over the airport are untrue.”
Claims that the company was discounting were true – “in the duty free shop”.
“We have a 40 percent sale in duty free because we are trying to minimise our stock holding,” said Harrison. “It is delighting passengers. But I can categorically state we have no intention of going anywhere.”
Indian industry groups back GMR
The 400,000-member Associated Chambers of Commerce and Industry of India (ASSOCHAM) has meanwhile issued a statement today in support of GMR, warning that “the attitude of Male’ Government, despite the rulings of Singapore High Court, will shake the confidence of the investors and will jeopardise the spirit behind the cooperation of the SAARC nations.”
The industry group appealed to the government to respecting the Singapore judgement, and said it “conveys its displeasure against any unilateral termination of economic agreements, that will be determent to the growth of the nations and might even sow seeds of suspicion amongst the potential investors in all times to come.”
A second industry group, the Confederation of Indian Industry (CII), also issued a statement in support of GMR.
“It is extremely important for all the concerned parties to respect the sanctity of the concession agreement and abide by the provisions provided therein to resolve any dispute within the stipulated legal framework”, said the CII’s Director General, Chandrajit Banerjee.
The stock price of the Indian infrastructure giant operating Ibrahim Nasir International Airport (INIA) took a tumble on the Mumbai Stock Exchange following the ousting of former president Mohamed Nasheed last week, as images of the unfolding violence were beamed around the world.
GMR has made a US$511 million investment in the Maldives’ international airport. The price of shares in GMR Infrastructure, which was contracted to develop INIA by the previous government, dropped by almost five percent on February 7 following news that fierce clashes between security forces on the streets of capital Male’ had led to Nasheed’s resignation.
GMR’s share prices quickly recovered over the following few days, as Vice President Dr Mohamed Waheed Hassan Manik was sworn in, and rain tempered public demonstrations which on Wednesday turned violent after police attacked a march by members of Nasheed’s Maldivian Democratic Party (MDP).
Speaking on February 11 about foreign investments in the Maldives, Dr Waheed said that foreign investors should not be concerned about the political upheaval affecting their interests in the Maldives, but hinted that some investments may come under scrutiny.
“We will not target anybody for political reasons,” he said.
“If there are any reasons for concern over investment, of course any steps that need to be taken will be taken.”
Speaking specifically about the contract with GMR, Dr Waheed said he would not approach the deal “from a political perspective”, adding, “It is not our intention to harm GMR. Our objective will be to resolve concerns of the public [regarding the company].”
GMR’s stock price continues to teeter this week.
“Short term fluctuations”
Speaking to Minivan News, one of India’s leading political economists Paranjoy Guha Thakurta observed that the political situation in the Maldives has affected GMR to a certain degree but pointed out that “GMR is also politically influenced in the Indian state of Andhra Pradesh.”
Thakurta said that the fluctuations in GMR’s stock prices should be seen in a wider context.
“These are short term fluctuations,” he said: “By and large, the markets of the world have been in limbo for some time. India’s stock market has been politically prone in the past year. I wouldn’t read too much into it,” he said.
The multi-million dollar deal to operate and dramatically expand the Maldives’ international air hub has been the target of controversy from the political opposition, much of it flowing from the Dhivehi Qaumee Party (DQP), a member of which – Dr Mohamed Jameel – is now the country’s Home Minister.
Nasheed’s government offered GMR, in partnership with Malaysia Airports Holdings Berhad (MAHB), the 25-year contract in June 2010. Since that time, various opposition parties including Dhivehi Rayyithunge Party (DRP), Dhivehi Qaumee Party (DQP), Jumhooree Party (JP), and the People’s Alliance (PA) have questioned the contract’s legality while former airport employees have protested against what they have claimed is a foreign take-over of their business domain.
Opposition parties have accused MDP cabinet members of having “vested interests” in the deal. In late 2011 the DQP took their objections to press and produced a 24-page book claiming the deal would “enslave the nation”, while former DRP leader and current deputy leader of the Progressive Party of the Maldives (PPM) Umar Naseer said last year that his party would re-nationalise the airport if it came to power.
While Dr Waheed is not a member of PPM or DRP, Naseer’s recent actions indicate shared interests. On January 31, a delegation of the December 23 Coalition, including Naseer, declared its allegiance to Dr Waheed amidst protests against Nasheed’s government and called for all military and police forces to back Dr Waheed. Naseer also recently informed the public that he was instrumental in the events and discussions leading up to Nasheed’s resignation.
Speaking to press last week, Nasheed said he had been aware that his vice president was meeting with opposition leaders at his home.
Naseer also told Minivan News in June 2010 that “If [GMR] allowed it, an Israeli flight can come and stop over after bombing Arab countries”.
Nasheed’s government was criticised last year for entertaining a deal with Israeli airline El Al. Following demonstrations in defense of Islam on December 23, in which opposition party and religious NGO leaders spoke against relations with Israel, the National Security Committee advised against the deal.
Past events have shown that GMR is sensitive to political fluctuations in the Maldives. GMR’s price on the stock market saw a 7 percent fall in December, when the Civil Court blocked GMR from deducting an Airport Development Charge of US$25 (Rf385.5) from passengers departing on international flights, according to India’s Economic Times.
Thakurta said, “If they re-open the contract, it wouldn’t hurt them [GMR]. GMR is really big, they’re the company behind Delhi’s new airport, which is India’s biggest airport.
“As in the case of what happened in Mauritius, GMR has had some issues over the charging of airport development fees for passengers, and the same story is being replicated in the Maldives,” he concluded.
GMR unphased
Declining to comment on the stock market fluctuations, GMR CEO of Maldives operations Andrew Harrison said GMR expects the existing INIA deal to be upheld, despite the change of administration in the Maldives.
Speaking to Minivan News, Harrison stressed that the Indian company is “politically neutral” and added that it respects whichever party is in control of the government of the Maldives.
“We’ve always been politically neutral in that our remit is solely about developing and operating the airport,” he said.
“We respect whichever party holds the seat of government in the Maldives. The government change is a change we respect and we remain politically neutral. We’ve got a concession agreement and we are sure that any government in power will respect that agreement. We’ve not heard anything that would make us believe otherwise.”
Several foreign staff working in Male’ as GMR contractors were temporarily relocated to India after both they and their employers expressed concerns over their safety. The political situation in Male’ remains volatile.
Harrison said, “Our only concern is for the welfare of GMR staff, so we have advised them to avoid hotspots where it appears that riots and trouble is breaking out.”
He added that tourists traveling through INIA should not be too concerned about the events in Male’, as the airport and resorts are separated from the capital city.
Harrison said, “The resorts and the airport island are geographically separated from Male’, and we’re also fortunate in the fact that the Maldivian culture is both welcoming and friendly towards foreigners. We’ve seen demonstrations of great hospitality both at the airport and at the resorts, both during and prior to this situation.
“People visiting the Maldives are being made to feel very welcome in the Maldives, despite what’s going on in Male’. The Maldivians have a very warm and nurturing culture and a willingness to welcome visitors – and this won’t be affected by the political situation,” he added.
There have been no political protests at INIA or any of the resorts to date. As such, the majority of current travel advice issued by foreign embassies recommends that tourists specifically avoid visiting the island of Male’, but they are not issuing a blanket travel warning against visiting the Maldives, apart from the Ministry of Foreign Affairs of the Ukraine which advises it citizens to avoid the country as a whole.
Ibrahim Nasir International Airport (INIA) welcomed the maiden flights of Etihad Airways and Hainan Airlines yesterday, making Male’ Etihad’s 67th destination.
Etihad flight EY278 from Abu Dhabi touched down at approximately 2:17 pm and was welcomed with a water cannon salute, bodu-beru dancers, coconuts and a ribbon-cutting ceremony. The Hainan flight from Beijing that touched down approximately 20 minutes later was similarly received.
Passengers who disembarked from both flights appeared curious, surprised, exhausted and delighted at the festivities. Etihad Executive Vice President Halid Al Marhedi was invited to cut a golden ribbon with GMR CEO Andrew Harrison and Maldives Marketing and PR Corporation (MMPRC) Managing Director, Simon Hawkins.
The new partnerships reflect the travel and tourism industry’s changing patterns.
While Etihad, the official airline of the United Arab Emirates, is projected to expand arrivals to the Maldives significantly, Hainan signifies China’s growing demand.
“It’s a good sign that these two airlines are having their maiden voyages today,” said Mahika Chandrasena, GMR Head of Corporate Communications. “Etihad shows that we are interested in expanding and working with these larger, well-known airlines. Hainan shows that we are interested in working with the Chinese market, which is growing dramatically.”
Hainan is the third Chinese airline to open operations in the Maldives.
Etihad is making the rounds in the region: today, it makes its maiden voyage to the Republic of Seychelles. Although Etihad will celebrate its 8th anniversary in the next few days, as one of the youngest premier airlines it has seen astonishing growth.
“Forward booking indicates that the Maldives has become one of the most popular destinations for leisure travelers and honeymooners,” said al Marhedi at a reception held at Naladhu resort last evening. Al Marhedi said Etihad was “very pleased to invest in the Maldives and support its economic growth.”
Speaking at the ceremony, Hawkins said the Maldives tourism industry could only benefit from the higher connectivity offered by Etihad. “It’s interesting to learn why people don’t come to the Maldives,” he said. “The number one reason is, people simply don’t know where we are. So when a major airline like Etihad opens services here, we know we can expect better connectivity to new markets and a fundamental boost to the country’s economy.”
Hawkins concluded that team work between airlines, travel agents, resorts and other sectors were essential to the growth and maintenance of the national economy.
Etihad has taken steps to offer customers a complete travel experience. Special travel packages are tailored to a range of budgets and travel purposes; airline guest members who book early and fly in the next 30 days will have their mileage points doubled.
INIA currently receives approximately two million arrivals each year from 29 different airlines. GMR aims to raise that to three million in the next year, and to 5.2 million by 2014, Chandrasena said.
“Alitalia will be joining us in December, bringing our airline numbers to 30,” she added. “We don’t want to say ‘no’ to anyone.”
Plaza Premium Lounge Executive Director Linda Song described the newly-opened Koimala Executive Lounge at Ibrahim Nasir International Airport (INIA) as “everyone’s apartment” during today’s inaugural event, which included a ribbon-cutting ceremony, speeches and a reception.
The lounge, which includes three sitting rooms, two verandas, a kitchen and a presidential sitting room, is part of GMR Infrastructure Ltd.’s project to expand and upgrade INIA by June 2014. GMR shares the venture with Malaysian Airports Holdings Berhad in a 77 to 33 percent relationship.
The Presidential Lounge offers privacy to government officials.
During a tour of the facility, Mrs Song commented on the facility of working with GMR. “I think its international experience has shaped GMR as a very flexible, open-minded company,” she said.
Tourism Minister Dr Mariyam Zulfa made a similar observation during the opening ceremony, reinforcing her praise of GMR from the earlier opening of INIA’s Plaza Premium Lounge.
“GMR is a company that listens to the stakeholders in the tourism industry, and that pleases the government to no end. I’m always delighted to come to the airport with stakeholders from the industry to open the dialogue for tourism,” she said.
Noting that Plaza Premium was invited to undertake the project only four months ago and with the caveat that the area is due for demolition in two years’ time, Zulfa said the lounge was an impressive and valuable accomplishment.
“Everything to do with the socioeconomic development of the Maldives should center arround tourism,” she said. “Because tourism, of course, is our number one industry, and everything we do should center around making the product even more perfect than it is today.”
The common area features television, wi-fi, and a variety of seating areas.
For a reservation of US$150, VVIP lounge guests are relieved of their luggage at a private security screening while their flights are monitored and their schedules arranged by the lounge concierge. Meanwhile, guests can enjoy an open kitchen and cafe, wi-fi, plasma screen televisions, and spacious seating arrangements.
Plaza Premium Lounge Management Ltd currently services 17 international airports and 60 locations with infrastructural development. The Hong Kong-based company is the world’s first ‘pay-in’ lounge.
Several people noted that the lounge’s opening was well-timed with the SAARC summit, which will bring heads of state from across the region to the Maldives.
Plaza Premium Founder and Chief Executive Officer, Song Hoi See said he did not agree with the project’s constraints but appreciated the challenge.
“Airports and tourism don’t always work together. But the Maldives is a special place, and the airport is the first and last place to impress the tourists,” he said, adding that he anticipated the new airport’s design.
Mrs Song attributed the success to Plaza Premium’s high level of preparation to overcome constraints of the Maldives’ industry. “We are well planned, and we shipped most interior design materials here pre-made. There aren’t many resources here for interior design development, so it would have been difficult otherwise.”
Designer Kinney Chan said the project was enjoyable in spite of the short notice. “It’s great to do something for comfort here, to blend with the resort feel, without getting too heavy.”
GMR CEO Andrew Harrison noted that the design had improved a formerly low-ceiling, dark room by bringing in natural light and creating “a home feel, supported by the excellent service that staff provides.”
“It’s a beautiful country full of beautiful people, and now we’ve delivered a beautiful lounge to match that,” Harrison concluded.
The Maldives’ first private airport opened today in Alif Dhaal atoll Maamigili with Maamigili MP Gasim Ibrahim’s own ‘Flyme’ airline beginning operations from Male.
The first commercial ‘Flyme’ flight left Male this morning with 16 tourists, Gasim, his family, and senior Villa officials on board, Haveeru reports. The airline has two aircraft with a capacity of 46 passengers each.
Maldives Association of Tourism Industries (MATI) is said to have provided support for the airport’s construction. Gasim said the airport includes private jet parking, and there are plans to use more aircraft to service Gaaf Dhaal atoll Kaadehdhoo and Seenu atoll Gan.
CEO of Ibrahim Nasir International Airport, Andrew Harrison, has expressed support for the airline.
Flyme airlines scheduled 10 flights for its opening day, however it did not disclose ticket prices.
The Plaza Premium lounge was inaugurated today at Ibrahim Nasir International Airport (INIA), a step in GMR’s wide-scale renovation of the airport terminal.
The renovation, which began approximately 10 weeks ago, was designed by Hong Kong-based Premium Port Lounge Management Company Private Ltd. A message from company founder and CEO, Song Hoi See, indicated that the company was eager to design the project and “add more flights to Male.”
The Plaza Premium lounge was opened with a ribbon-cutting ceremony and a reading from the Qur’an. Among the officials who cut the ribbon were Tourism Minister Maryam Zulfa and GMR CEO Andrew Harrison.
“This is a proud moment,” said Zulfa. “It is sad that some of the resorts and institutions in the Maldives do not measure up to the standards of our premium customers. I am happy that GMR is setting an example for the Maldives as it moves forward.”
Zulfa, who arrived today from an international flight, described some fellow passengers who called a baggage delay “typical.”
“I said, ‘No, this is not typical. This is atypical. Because GMR is now taking care of us.’ It was a relief to know that a negative experience was not typical of how our airport works.”
Tourism Minister Maryam Zulfa surveys the Plaza Premium Lounge with GMR CEO Andrew Harrison
Baggage beltways were recently expanded, while eight check-in counters and two security lanes are being added. “We are de-bottlenecking departures, and things are running smoothly,” said GMR Chief Commerical Officer Prasad Gopalan.
Gopalan said the airport had seen an even higher increase in traffic this year than expected. “There is more traffic from Asia, and we are expecting Russian traffic to increase as well.”
Harrison said the renovation process had informed GMR of the higher standards that travelers now hold. He noted that washrooms and check-in counters were being refurbished “to make it a more ‘Maldives’ welcome for travelers,” and added that former staff had been re-trained to meet premium standards.
The lounge is open to first and business class passengers, and to economy class passengers for an undetermined fee. Services include a buffet and a la carte menu, computer and internet access, television, and spa-style foot rubs.
Harrison told Minivan News that “the quality of this lounge is a commitment to the quality of airport that the Maldives and its visitors can expect to see in the future. Even though this lounge is an asset with a short shelf life, it is appropriate that we demonstrate what the new terminal should be like.”
The new terminal at INIA is expected to be completed over the next three years, and will have a capacity of 5 million.
The renovation’s estimated cost is US$1 million. More renovations will be completed before the tourism peak season of November and December.
The CEO of Male’ International Airport, which is currently operated by Indian infrastructure group GMR, has said that although the company had made certain mistakes in terms of its finance policy of late, management was confident of learning from them to deliver significant changes to the site over the next three months.
Andrew Harrison, who took the CEO position at Male’ international Airport when GMR took control of the site in November, told media today that despite significant work already underway on overhauling behind-the-scenes operations, he was still learning how to deal with stakeholders like airlines and exporters at the site.
The week has threatened to be potentially difficult for GMR, with reports emerging in the press of the company’s alleged plans to increase land lease rent at the airport by 50 percent – the first such price change enacted in a decade. News of the announcement had led some local airlines and a number of import companies raising concerns at the reported increases and the possible impacts on their operations.
Harrison nonetheless claimed that he hoped the public, as well companies working with the airport operator, would soon see more of the changes resulting from its investment in the form of operational and aesthetic improvements at the existing terminal.
“People are expecting to see a lot of change immediately, the change does take a little time, but actually there is a lot of work going on behind the scenes. What we will now see over the next three months is rapid progress where the changes will be more visible to the public,” he said.
“We had, through our concession agreement, been given a mandate to improve levels of service in the existing terminal areas, so this was focused on baggage processing time and baggage delivery time and the checking of passengers. What we are recognising is that people have much greater expectations, so we are spending more money than we are required to in terms of the concession agreement to actually make [the terminal] a much nicer environment.”
The pledge comes as newspaper Haveeru this week reported that airlines such as Island Aviation and seaplane group Trans Maldivian Airlines were concerned at how the implementation of future rent raises could impact on their operations.
Some importers working for the tourist trade have also told Minivan News that they have faced a sudden “100 percent increase” in charges for containers that they need to hire at the airport for their stock.
One importer and supplier of alcohol to a number of tourist properties in the Maldives, who wished to remain anonymous, told Minivan News that a number of the company’s business peers had looked to form a committee over concerns at rate hikes they claim have been deemed “non-negotiable” by GMR.
According to the supplier, the airport operator had acted “unprofessionally” in suddenly announcing that the monthly rates for 70 feet containers at the site were being doubled, meaning certain companies potentially face an additional bill of up to US$45,000 a year to work from the site.
Although the supplier said that they were being given a month to rewrite terms and conditions within new contracts that they were unhappy with, the container rent was seen as a “non-negotiable issue.”
In today addressing the issue of lease rent specifically for local airlines, Harrison denied that any official price had been set, adding that negotiations were now being held with key lease holders like Island Aviation and the company’s sea plane operators over cost amendments that he said remained fully open to negotiation.
Amidst press reports about certain concerns by some lease holders over the potential rise in airport rent and the possible impacts on their operations, Harrison stressed that in future, the company would aim to learn lessons and consult stakeholders “much in advance of any envisaged changes”.
However, the Male’ International Airport CEO claimed the company would still aim to push ahead with adjusted charges in areas such as land lease rent to ensure changes could continue to be funded at the airport. Harrison claimed that this rate increment would remain one of a “few” financial changes expected to be needed at the airport at present.
Though he did not confirm when the decision to potentially amend rent rates had been decided, Harrison claimed that GMR was working from a long-term development and cost plan set out in its original concession agreement.
“I want the airport to be profitable, but I want it to be responsibly profitable, because with those profits we are able to do many things including the development of the airport ongoing. [By] November 15 2011, most of this work will be done, but actually we will continue, it won’t end. There will continuous improvements all the time,” he added. “These improvements have a cost to them, so we need to have a business model that is responsibly profitable and trying to be responsibly profitable means that when you have different ways of doing things, you must engage your stakeholders in dialogue. We didn’t fix a [rent] price.”
According to Harrison, the potential increase in land rates from US$6 per square metre to US$9 for the same area were primarily expected to impact the operations of Island Aviation and the airport’s two seaplane operators with discussions already underway with them in addressing the issues.
A spokesperson for island Aviation confirmed to Minivan News that the company was currently in a “dialogue” with GMR though no out come had as yet been reached.
In trying to allay fears of further cost rises for stakeholders, Harrison claimed that he hoped to try and address the airport’s partners and customers like suppliers and service operators differently over future notices of change.
“I think one of the lessons that we are also learning is that people would like to have this dialogue much in advance of any envisaged changes. So what we are saying is that, ‘right, we have done a range of changes, let’s stop there now,’” he said. “Anything we want to do let’s have a discussion well in advance to understand the impact of changes we well make.”
Harrison took the example of requirements for new VIP and other lounges at the airport that had been requested by airlines to bring them up to the standards expected from “premium passengers”. The airport CEO said that he expected about US$500,000 to be spent on the project in total to try and meet the demands of airline companies.
“In this business model, what we’re trying to see is how much has to be spent and how which will be recovered in the time available. Don’t forget, this terminal has a life of about two and a half years before we move over to the new terminal and on the basis of that can we stay within the existing costs,” he said. “On the basis of that, can we stay within the existing costs? If we can’t what will be the difference [in charges]? Let’s discuss this with the airlines first before we announce, publish or indicate anything.”
In future, Harrison claimed that the company would try and change its current system of issuing communication about proposed changes before starting dialogue with the companies involved, claiming he would look for “better ways” to do things.
Alongside the issues of rent, Harrison conceded that he was not entirely happy with the manner that the company had reacted to a decision by the Maldivian government last week to amend an longstanding set US dollar exchange rate of Rf12.85 to within 20 percent above or below the figure to attempt to alleviate shortages of the currency.
“We’re human beings and sometimes we don’t always get it right. One example of where we didn’t get it right was that as soon as the announcement came from the Maldivian Monetary Autjority (MMA) about floating the exchange rate, we issued a communication announcing an exchange rate of Rf15.42 [to the US dollar],” he said. “That was incorrect of us to do so quickly. We didn’t need to do it. We could have waited to find out what financial institutions such as the banks were going to do before we did that. I have issued a further communication indicating that we will take the best available rate made by the three banks here in the Maldives.”
An interview Minivan News conducted with airport CEO Andrew Harrison last month about his experiences in the Maldives and plans for the airport can be read here.
Rising prices for aviation fuel and increased ground handling charges made by GMR, the Indian infrastructure giant that is now managing and developing Male’ International Airport, are in line with international prices, the airport’s CEO Andrew Harrison has told Minivan News.
The price of fuel at the airport has increased 35.39 percent at the airport and 35.67 percent internationally, Harrison said, in an update on progress at the airport during an initial 180 day strategy period following the company taking the reins.
“We are not even passing over the full increase in prices of fuel – we’re sensitive to airline customers and what the price of fuel means to them,” Harrison said. “The escalating price is affecting the whole global economy, and affects airlines directly not just here but at all other locations.”
Harrison sought to head off concerns aired recently that the cost of fuel at Male’ International Airport was impacting airlines’ willingness to fly to the destination.
“No airline has come forward and said they are unhappy with our pricing, but they are concerned about the global price of fuel,” he said. “With all the volatility there are challenges there.”
“We are working on some strategies to reduce the cost of providing fuel to them. We’ve spent the last six weeks meeting airlines – some want credit terms, others a set supply criteria – we are trying to meet the need of the majority.”
“The pricing of fuel is not something we compare one place to another, because there are many variables including the method of delivery and the volume you’re buying. The size of the berth we have limits the size of vessel we can charter, and these factors affect the price we can buy and supply fuel at.”
GMR had signed a US$140 million contract with the State Trading Organisation (STO) to supply fuel, he added, switching the contract over from Dubai-based Galana Petroleum.
“Our sense was it was better to use a company right here with us that would share in the risk and opportunity and try to get us the best possible price – for instance, the STO has its own vessel, and may not need to charter one. They made an extremely competitive bid.”
Many airlines, he explained, used a middleman reseller who bought fuel and sold it by offering components such as credit terms.
“Resellers may be in a better position to do that, as we are not a company in the business of providing credit terms to airlines. But what we are saying is that because the airline is our direct customer we prefer a direct relationship with them.”
This had led, Harrison said, “to a number of airlines leaving intermediaries and coming to us directly. They have a choice – but they are coming to us.”
Ground handling spikes
GMR has significantly increased ground-handling charges to bring the price in line with other international airports, Harrison said.
The ground-handling charge for a B777, used by many airlines flying to Male’, was recently raised from US$1990 to US$2985 ( at daytime) and US$3585 ( at night) – an increase of over 50 percent.
“It’s not necessarily unreasonable or overpriced – it may seem like a jump but there’s been no increase in 12 years, and we are still more competitive than a number of international markets,” he claimed, noting that the comparable cost in an Australian airport was US$4286 and US$4388 in Europe.
Most other services, such as the provision of ground power, were either cheaper than comparable rates in India or included – airports such as Hyderbad charge airlines for services such as the provision of wheelchairs, or use of a scissor-lift for people unable to climb the stairs to the plane.
Free storage of airline baggage containers had actually resulted in the airport being inundated, “but instead of charging we are asking airlines to reduce them to realistic levels.”
Ground-handling charges were less that four percent of an airline’s operating cost, he noted, “but that doesn’t mean we want the issue to escalate.”
Corruption allegations
Despite persistent allegations from opposition parties that there was corruption in the airport bidding process, including several cases forwarded to the Anti-Corruption Commission which vowed to investigate, “we have not been approached by the ACC,” Harrison said.
“There has been no formal communication [with the ACC], and we are extremely confident of standing up to any scrutiny because of the way the bid was scrutinised by the World Bank’s International Finance Corporation (IFC).
“They been here recently as part of their due-diligence process, meeting members of the public, ministers and stakeholders, and holding a community meeting in Hulhumale’ about the impact of the development. They wouldn’t be here doing that if they felt they were part of something that had not been done properly. We are confident that irrespective of what is being discussed in the media that we followed a legal and due process that was transparent and respected.”
There were, he acknowledged, “people who believe in what we doing, people who feel they haven’t seen sufficient evidence of what we’re doing, and people who will never be convinced no matter what we do.”
Cultural construction
The first 180 days, Harrison explained, had been spent merging the cultures of the three organisations now operated under GMR Male’ International Airport – the former Maldives Airport Company Limited (MACL), Island Aviation’s passenger check-in and passenger handing operation, MIC’s interior cleaning, “as well as GMR’s culture.”
The company’s organisational structure had been unveiled with an emphasis on staff training, involvement in decision making and addressing issues such as a noticeable gender imbalance.
“We found a gender imbalance in the workplace – there were not many ladies operating at levels where they had significant levels of responsibility,” Harrison observed. “So we tried to address this – the new Head of IT Operations is a very qualified lady who is very good at her job, but she was many levels below and wasn’t being allowed to operate at a level that matched her potential.”
GMR was making an effort to communicate in both Dhivehi and English, he said, launching Dhivehi language classes for non-Maldivians and producing documents in both languages.
Staff suggestions and involvement had led to the creation of a non-punitive safety system, encouraging reporting rather than punishment, upgrade of the airport’s sea rescue capabilities and the replacement of 350 unbranded assembled computers with a consistent Dell IT infrastructure – and paid software licences.
Glitches in communication emerged as well – GMR took a dim view at the beginning of March when security staff began conducting pat down searches of every passenger trying to enter the terminal.
“A pat-down check is more efficient when people are experienced, but not when you introduce it on a peak morning with queues all the way down to the seaplane check in area, with no notification to the airlines or us,” Harrison said. “As a result of that we had unprecedented delays – nearly every flight that morning was delayed. Security took a line that nothing new was introduced, but after an emergency meeting the pat downs were stopped and the queues disappeared.”
He was, he said, happy to look at industry best practice and whatever technology was required, “but [I] am not prepared to introduce something not in line with international standards. Heathrow and Gatwick search 25 percent of those who don’t set off the alarm. Here we were searching 100 percent.”
CEO Andrew Harrison (left) at the airport handover
Physical infrastructure
Harrison was very conscious of public expectations regarding the airport upgrade – following the release of artist impressions of the airport, GMR has kept a low profile while introducing its organisational structure and attempting to win over staff to its nearly US$400 million vision for the airport.
Managing such expectations had been one of the key challenges, he said: “A lot of people felt there would be changes to the terminal the day we took over – but there have been many considerations, such as impact of work in peak periods, and understanding what work we want to do.”
Many physical improvements were scheduled to begin as the Maldives leaves peak travel season: “We weren’t in a position to remove even a single baggage carousel,” Harrison said.
GMR has a lot of work ahead of it if it plans to meet its target of upgrading the existing terminal by October. The refurbishment is “essentially throw-away” considering it will have less than a three year lifespan until the new terminal is completed in 2014.
During a tour of the present airport terminal Harrison provided a running commentary of planned improvements – including a food court (selling, among other foodstuffs, Turkish kebabs – a Male’ first) and raising the ceiling of the arrivals area so tourists could see the sea from the gate.
Harrison admitted that the scale of investment in the upgrade made it tempting to just bring forward the date of the new terminal, however he acknowledged the local appetite to see quick improvements.
“People will see changes in the coming months. For example, we’re about to start work on the domestic terminal, increasing the space available by 50 percent. This falls outside the concession agreement, which mostly concerns international travellers – but a lot of domestic passengers are Maldivian and deserve to benefit from the improvements as well.”
Other improvements will include redesigned and standardised tourist counters that are branded individually by resorts, a left luggage service, baggage wrapping service (“this is popular for a number of destinations, especially Eastern Europe”), porter service (“people particularly from the Middle East want the services of paid porters”), ‘fast-track’ immigration and customs as well as the potential for a ‘premium’ jetty.
There will also soon be a spa in the departure area offering 20 minute shoulder and foot massages, and possibly a nap and shower facility. Moreover, ‘soft skills’ trainers loaned from Singapore Airlines, “some of the best in the world”, had been invited to help train front-of-house staff at the airport.
Following construction of the new terminal, Harrison said the goal was to turn Male’ into one of the top five airports in the 1-5 million passenger category (the airport presently sees 2.4 million visitors through its gates a year).
“Look at the kind of experience a tourist coming to the Maldives goes through,” he said. “The natural beauty of the resort environment, and then the airport experience they go through at the end – it’s not right, standing in extensive queues, with a level of service so far apart from that of the resorts.”
Economy and marketing
Asked whether GMR had concerns about operating in the Maldives given the state of the country’s economy, Harrison said he believed the improved airport itself was part of the solution.
“An airport is an economic engine for a country,” he explained, “allowing trade, travel – both passenger and cargo – and employment. If the processes are made efficient, it has positive impact on the economy.”
Moreover, GMR’s involvement provided resources and expertise in opening up new tourism markets for the Maldives, Harrison explained, particularly undeveloped markets such as the United States.
“We want to talk to resorts, the Ministry of Tourism and the airlines about possibly marketing the Maldives in the US,” Harrison said.
“The US is the most underrepresented market in terms of direct tourism, however 14 percent – the highest single percentage – of tourists arriving coming into Delhi hold US passports. If they are willing to fly to India it’s only a short hop to the Maldives – I think it’s a matter of awareness and understanding connectivity and flight options, and most importantly, what’s here at end of the journey.”
The Maldives, he said, represented a “more interesting prospect” than traditional nearby island destinations visited by US tourists, such as the Bahamas and the Caribbean, adding that GMR was keen to explore this untapped market.
“We didn’t go to ITB [the recent travel industry trade show held in Berlin] this year because we didn’t think we had anything to say and I didn’t really want it to just be a jolly,” Harrison said. “But next year we’ll have a stand showcasing what we are doing here.”
Indian infrastructure giant GMR and Malaysia Airports Holdings Berhad (MAHB) have formally taken over the reins of Male’ International Airport, the beginning of an expansion project that includes the construction of a new airport terminal by 2014 and the refurbishment of the existing terminal in just 180 days.
Minivan News speaks to the CEO of GMR Male’ International Airport, Andrew Harrison, the man now in charge of making it happen.
JJ Robinson: What stage does the airport currently stand at following the official handover on November 25?
Andrew Harrison: The focus so far has been on engagement with employees, and bringing together various stakeholders. An airport is like a community, with customs, immigration, Maldives National Defence Force (MNDF), ground handling and all the other services involved. We want to ensure people work together as a community and recognise that each depends on the other to make sure the experience for the passenger best it can be.
The development aspect involves hard construction, but it is very important to look at development of the people – the greatest asset we have. If we develop our people they will look after our business.
JJ: How is the situation different now compared with when GMR first arrived?
AH: An initial challenge was that we had a ground handling company, MACL, and another company that did cleaning and inflight catering. We were not taking the catering but we were taking the cleaning. So you have three different companies with three different organisational cultures that now need to merge into one, and add the culture of GMR Airports.
People ask what apprehensions I had – I wondered how we were going to merge these organisational cultures together. That was the real challenge. Having said that, people responded very well. There were lots of issues where there were differences between those companies, so we had to work to iron out those differences,
JJ: What were an example of some of those differences?
AH: The amount of leave people received in the three companies was different, so we standardise that so one isn’t perceived as having more than another. There are obviously differences in pay scales as well, but that has to be addressed over a longer period of time.employees. to integrate and look at aspects skills, performance and reviews of 1513 employees takes a period of time.
JJ: You had a high success rate retaining employees to the new airport company?
Airport CEO Andrew Harrison at the handover ceremony (left)
AH: It was 100 percent. [Initially] we had a few people overseas on training and it took a bit longer to get the documentation to them. We had a process with the government of the Maldives and MACL. In the conditions for handover we had to demonstrate the implementation and success of the plan, and we had a daily report on how many people on the list passed to us accepted our offer and conditions. I’m pleased to say it was 100 percent.
In terms of people development we are now looking at training programmes. We are just about to send 25 fire and rescue staff to Malaysia for three and a half months of training.
I was interested in that training being not just an assignment, but something people will value and recognise and help to advance themselves. So I said we will invite the parents by surprise to go to the passing out parade of the two best students – best improvement and best overall student – so they can watch their sons be recognised for the distinction they have demonstrated in their learning. I think that is a way we are showing that we are going the extra mile.
In terms of development, the new terminal will be completed in late summer of 2014, and will be really designed to reflect the beauty of Maldives. The terminal will have large glass facades, and natural materials people are used to seeing in resorts, skylights to allow natural light in, and natural water bodies and water features surrounding terminal so you always have that feeling of being close to water. That’s one of the reasons people come to the Maldives.
As for the refurbishment of the existing terminal, we [have launched] a 180 day terminal improvement programme. In the concession agreement we are given one year to complete it, but we have decided to do it in six months.
In those six months we will look at improvements in processing capacity, such as baggage reclaim, capacity of the check-in counters, and centralised security screening – there are two at the moment. This will give passengers greater time in retail area and reduce queuing.
JJ: The GMR bid was particularly generous on the fuel revenue sharing with the government (27 percent from 2015), and less so with the sharing of airport revenue (10 percent from 2015). How will GMR justify such a low margin on fuel?
AH: Today in global airport development there is a balance between aeronautical revenue and non-aeronautical revenue. Aeronautical revenue includes typical revenue from aircraft landing and parking, direct charges to airlines and passenger fees.
But in these challenging times there is continuing pressure to reduce the burden of aeronautical charges. The development of the last few years has been an emphasis on non-aeronautical revenue, as the burden of fuel costs, and engineering costs has increased significantly.
We look at the non-aeronautical development as being part of the commercial arrangement, including the the utilisation adjacent land, conference facilities, hotels, things that actually compliment our services. Our strategy in the long term is a greater focus on these.
At same time, we will focus on the development of the economy as a whole. Because the airport is literally a gateway, an economic engine. It facilitates trade, travel and employment. Generations of Maldivians have worked at this airport and we see this as continuing.
We see ourselves as having a much wider remit – for example, today there is the resurgence of Sri Lanka. 10-12 years ago people booked a 14-day holiday, with 10 days in Sri Lanka, four days in Maldives. They would spend five days in Sri Lanka, come over to the Maldives for four days and go back for five.
When the Liberation Tigers of Tamil Eelam (LTTE) problems arose in Sri Lanka, people came to the Maldives because of the perception of increased security and reduced risk.
Now Sri Lanka has put the LTTE difficulties behind them, we now have the difficulty of the resurgence of Sri Lanka. Now we run the risk people going back to Sri Lanka because it cheaper – and you can do many things there that you can do in the Maldives. In my opinion it’s not as beautiful, and it’s not as exclusive, but not everyone wants to pay that [higher] price in the Maldives.
We are also looking at developing much better traffic between the Maldives and the United States. Today it is the most under-represented nationality in terms of visitors to the Maldives. We have airlines like Qatar Airways and Emirates so we know we have flight connectivity which will allow seamless transfer.
JJ: How do you convince a country like the US to fly to the Maldives instead of closer and more developed destinations such as the Caribbean and Bahamas?
AH: They will be other destinations the Maldives competes with – Hawaii for the US and the Canary Islands for the UK. Fiji to a much lesser extent, which serves Australia and New Zealand.
There is competition with Mauritius to far lower extent, because even though it is a far bigger island it doesn’t attract the number of visitors that the Maldives does.
Curiously, one of the reasons I discovered for this is because the temperature of the water is cooler so divers have to spend less time diving compared to here where our average water temperature is 26 degrees.
JJ: The fuel trade has historically been a key component of the airport’s income, will that continue?
AH: With the fuel trade today we have means of procuring and supplying fuel to the airlines. The airlines also have some of their own arrangements, because they take advantage of global purchasing deals, and companies that supply them in other countries also supply them here.
What we are doing is looking at the existing contracts, and simply reviewing how we can enhance consumer gets. Some airlines like greater term of credit, other airlines a term of time – we have to match various needs and at the same time remain a competitor in the region.
JJ: There have been concerns that such a high fuel share with will compress your own fuel revenue, which could involve passing on the cost and potentially make it more expensive for the airline.
AH: No, I think the strategy we recognise is that we have experience introducing efficiencies. MAHB has 39 airports, GMR has three airports. Between two of us we can leverage what we know and bring that advantage here, and that will make us more efficient.
Because what drives the price of fuel is the cost. If we become more efficient providing fuel we can manage the implications going forward. We have studied that very carefully so that it represents a very good deal for the people of the Maldives and us as business, and also the consumer, be they a passenger or airline.
JJ: How big a part of the airport’s revenue do you expect the fuel trade to be?
AH: It’s not an issue for us, to be honest. We have so many advantages through being able to help the government to influence amount traffic coming in, and in the airport. That doesn’t just mean duty free but food and beverage, transfer services – there are so many needs passengers have here because of the uniqueness of the way people arrive and depart from the Maldives.
The seaplane operation, for example, is an example of how we collaborate. In our original design for the terminal the arrivals section sat on top of the seaplane operation. We are now adjusting that because we recognise how important the seaplane operation is to the Maldives – 60 percent of arrivals are transferring to seaplanes.
What I’d like is that once you come out of arrivals after clearing customs, you have three choices: seaplane transfer, boat transfers to resorts, and passenger transfer to Male’. It is very straightforward and more importantly it is very efficient.
We see many opportunities with the non-aeronautical developments once we complete the terminal development. We have proposals in terms of developing the land area [around the airport],and that is where we see the opportunities.
The concourse of the new terminal
JJ: What is your own background, and what do you bring to the operation?
AH: I have worked for GMR for five years and before that the TBI group in the UK, which ran 26 airports.I have worked 13 airports around the world.
I guess what I bring is an understanding of how an airport can be developed efficiently within a stakeholder environment, looking at needs of a country as a whole, where we are a facilitator of the economy while ensuring the development of leadership qualities in people so they can take over managing the airport.
In a period of five years, we would like this airport to be managed entirely by Maldivians. And some of those Maldivians will move onto our other projects. My real role is to mentor and lead our team here and develop them to go onto bigger and better things.
JJ: An airport is a complex operation – has it been hard to find skills such as qualified engineers?
AH: It has not been a challenge because Maldivians are very talent and very dynamic. They are very self-sufficient. I have guys here in engineering who are able to do virtually anything. It’s amazing, it’s a new skill, and I think to myself, ‘Wow, if we’d had people like this working in India those projects could have been done in half the time.’
We have a lot to learn from Maldivians here, but at the same time we have a lot to share with them.
We recognise that a lot of people have gained their skills through time spent in that department – that doesn’t mean they are in touch with current trends, products and processes that have changed over time to make things more efficient. We are also going to send people to other airports in our group, to give them exposure.
It’s not a matter of finding technological capacity – what we recognise is that we can enhance skills greatly with training and exposure to other airports.
JJ: What have been some of the key challenges here?
AH: There have been a few. I think one of the challenges has been perhaps the misunderstanding people have had – and that’s really changed – about what we are here to do.
There was an earlier misconception that we were going to put a thousand Indians on a boat and set sail for the Maldives and replace everybody here with Indians because it was cheaper labour and would be our preference. But clearly it is not. We are not doing that. Our manage structure at the leadership level is a combination of Maldivians and non-Maldivians. We will learn from them, and share what we have learned. Our challenge is to transfer knowledge to them and harness what they have learned so we can use them in our other airports.
Then the next time we bid for an island airport I’ll know exactly who to call on to take leadership roles in that airport, because I know guys who run a great island airport here.
The second misconception has been that we have come in here to increase all the rates.
JJ: Former Deputy Leader of the opposition Umar Naseer famously stated that the airport deal “will allow Israeli flights to stop over after bombing Arab countries.” How do you respond to such rhetoric?
AH: We look at it, and the information in the media at moment. I find here that people are intelligent and forward thinking, and they able to determine what is fact and fiction. We have full confidence in general public’s ability to discern that.
I think a challenge we faced was the notion that we were coming in and increasing charges. The CEO of the International Air Transport Association (IATA) has said their members prepared to pay increased charges, provided they see improvement in the airport in terms level or service and the development of airport. Clearly they will see that [in the Maldives].
Our mandate is to review the cost of providing services, determine what every stakeholder wants, and determine at what cost we can provide that.
We have airlines who have come to us and told us that the lounge is not what they expect, and that they would like to build their own lounge – three airlines have come forward to build their own lounge – but cant have everyone building their own lounge because we don’t have enough space for that. But what we can say is, ‘What do you require?’
For instance, only one airline currently has a first class service into Male’. All the rest have a business class and economy service, and sometimes premium economy. But the airlines are telling us that some of the passengers arriving on business class are in fact first class passengers, who have flown from London to their hub in first class, but then in business as a downgrade. To all intents they are a first class passenger with first class expectations, and as a result of that the kind of lounge the expect is not the kind they get.
We are working to determine that. But the person on the street may decide ‘You’ve come in here and built a new lounge and now you’re charging more money for it.’ But what they don’t see is the airlines requirement to actually have that facility, because the facility that is there does not meet the standards they expect it to.
These are some of the areas there are misconceptions that are not clear to the public and may be misconstrued.
Exterior of the new terminal, at night
JJ: On the subject of fact and fiction, I’m sure you’re following Maldivian politics with great interest – one of the current issues involves bribery allegations concerning GMR, denied by the Speaker of Parliament Abdulla Shahid and Leader of the Opposition Ahmed Thasmeen Ali, involving them travelling to Delhi on tickets purchased by GMR. Once and for all – has GMR had any contact with the Speaker of Parliament or the Leader of the Opposition?
AH: I think for the interests of clarity, we are extremely privileged to have this opportunity to manage the airport, and the GMR Group will at all times want to confine itself to that responsibility – and nothing else. Because that’s what we’re good at – we are no good at politics. And so we try to stay away from issues such as those.
What I can tell you is that any of the meetings and discussions that we have with anyone in government today have been open, well-known and available to the public. We go to public meetings, and we have other stakeholders present in these meetings. So for us, there is no question of anything occurring that would be shrouded in secrecy, or not known to the public.
Certainly I can tell you I have no knowledge of anything like that taking place. This seems to be something going on between people outside of GMR, although somehow we have appeared in the frame.
Those parties allegedly involved will be able to determine between themselves what is fact and what is fiction.
JJ: Former Deputy Opposition Leader Umar Naseer has claimed he has a letter from Sri Lankan Airlines confirming the authenticity of tickets purchased by a travel bookings company used by GMR, FCM Travel Solutions [shows ticket]. Has GMR flown these two individuals to Delhi?
AH: We don’t have a travel company, we use different travel service providers – we don’t use a defined company. I can’t comment on what Sri Lankan is saying because that information is privy to the airline that made the booking. Certainly anything we do is in the public domain. So if that were the case, it would be something publicly known and something people would be aware of.
This is something between the parties, the airline, and those who allegedly have been involved in purchasing whatever, and who are making the allegations. We honestly wouldn’t be able to comment on that. Because we have no knowledge of this, to be quite honest.
JJ: Have GMR made any efforts to determine the the source of the opposition to the airport, or the concerns of the coalition of parties opposed to it?
AH: No, because we have decided very clearly that our remit is to manage the airport, and we feel it is important to confine ourselves to this remit.
Otherwise it becomes very easy to confuse our mandate here and what people may perceive we are here to do. All of our attention is focused on the airport and demonstrating that we are an airport operator that will be responsible and respectful of the society and culture, and the laws of the Maldives.
As a result of that, I don’t think you would find us doing anything that goes beyond the boundaries of this airport, other than the relationships with those involved who have anything to do with the development of the airport.
JJ: This opposition coalition group have previously said they may take back the airport if elected, suggesting this could potentially become a campaign issue. Are you worried that a change of government could precede nationalisation spree?
AH: No, it’s not really a concern for us. Because quite frankly we are very pleased with the transparent process in which the bid was managed and assessed and awarded, and supervised by an independent body.
I think once people see the new airport, nobody is going to want to undo what has happened to it. We have staff who are motivated and engaged and telling us that this is an environment very different to the one in which they were working before, and they are very excited by these changes. And we have stakeholders who have welcomed the changes we have made until today.
Passengers coming through this airport haven’t been telling us that there is something they don’t like about how the airport is being managed. So our job is to manage the expectations of consumers and stakeholders to transform the airport into a much better experience. I think by doing that, we will address any concerns people outside the airport community have about us being suitable people to run the airport.
I would like to say that this airport belongs to the people of the Maldives, and nothing is going to change that. We may have financial responsibility for the airport, but physical ownership of the airport will always remain with the people of the Maldives.
What we are doing is continuing the evolution of the development off this airport from the volunteers who in the 1960s came to build it through sweat and toil into what it is today. This evolution continue, as will growth in tourism and trade. We are simply a guardian, a custodian of this national economic asset.
JJ: No concerns about sea level rise?
AH: No. When we became involved in the bid process we engaged three leading companies who are at the forefront of analysing geophysical activity, climate change and the impact rising sea levels.
What we can tell you today is that the risk of rising sea levels coming above the land is so low that it’s not even considered in the insurance premiums for the Maldives.
Insurers are notorious for considering even unimaginable risks, so I can tell you that if no insurance company considers this in any of their policies for the Maldives, we think that the risk is pretty low.
We are the largest single investor now in the history of the Maldives, and to make this kind of investment we would have had to had confidence that this investment would survive not just the term, but leave a lasting legacy. Beyond 25 years we want people to remember what happened while GMR was here. So it is not in our interest to invest in something that may not be here for the full term – and that term goes beyond the concession period.
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