MACL can sue former chairman over GMR airport charge decision, says Civil Court

The Civil Court has ruled the Maldives Airports Company (MACL) can sue its former chairman for allowing the disputed Airport Development Charge (ADC) to be deducted from Indian infrastructure giant GMR’s concession payments during it’s ill-fated agreement.

MACL alleges ‘Kuda Bandhey’ Ibrahim Saleem’s decision to be an act of ‘Ultra Vires’ – meaning that Saleem had acted beyond his permitted authority.

The ruling came following a procedural issue taken by Saleem said he was being wrongfully charged claiming the lawsuit was filed in violation to Article 18 (c) of the Contract Act and Article 74 Company Act.

The Contract Act states a clause requiring a party to refer to arbitration any dispute arising from the contract shall be valid, while the Company Act says the court has a right to issue orders holding personally liable the directors of the company to commit an offense in the name of the company.

But the Civil Court ruling stated that the Company Act does not prohibit the company chairman from being sued personally.

The airports company sued Saleem after he signed a letter sent to GMR on January 5 2012 stating that the ADC and the insurance surcharge fee had been deducted from GMR’s concession payments.

In late 2011, the then-opposition Dhivehi Qaumee Party (DQP) had filed a successful Civil Court case blocking GMR from charging US$25 charge for outgoing passengers – stipulated in its agreement with the government – on the grounds that it was a tax not authorised by parliament.

Former President Mohamed Nasheed’s administration subsequently chose to honour the original contract, instructing GMR to deduct the ADC revenues from the concession fees due to the state-owned MACL while it sought to appeal the Civil Court ruling.

However, with the Nasheed’s controversial resignation coming just one month later, the opposition soon inherited the contractual problem.

Dr Mohamed Waheed’s government then received a succession of bills from the airport developer throughout 2012, despite its insistence that the January 5 letter from MACL outlining the new arrangement was no longer valid.

In December 2012, the Anti-Corruption Commission (ACC) filed a case with the Prosecutor General’s Office over Saleem’s decision to allow GMR to deduct the ADC from concession fees owed to the state.

As part of the filed case (Dhivehi), the ACC was seeking reimbursement of MVR 353.8 million (US$22.9 million) from Saleem and former Finance Minister Mohamed Shihab over the alleged misuse of authority it claimed had led to significant financial loses for the state.

These losses were used as justification for the contract’s eventual termination in December 2012, for which GMR is currently seeking compensation via a Singapore court of arbitration.

According to the case filed by the ACC, former Finance Minister Shihab stands accused of misusing his ministerial authority to benefit a third party by allowing GMR to deduct the charges between October 2011 and September 2012.

The ACC has also accused Saleem violating the company’s rules. According to the ACC’s case, normal procedure for MACL would be to have the company’s board of directors pass a resolution allowing for consent to be given to deduct the ADC.


Airport development begins, with “no chance” of GMR returning to project

The Maldives Airports Company Limited (MACL) has begun a program to further develop the airport, to be done in multiple phases.

Launching a program worth US$5 million to develop Ibrahim Nasir International Airport’s (INIA) ground handling on Thursday, MACL Managing Director ‘Bandhu’ Ibrahim Saleem revealed that various plans had been set in place for the development of INIA.

President Abdulla Yameen has today been quoted in Indian media as stating that any future management of the airport will not be carried out by foreign companies – with the Maldives government itself the preferred overseer.

Saleem told local media that, in addition to the introduction of new baggage tractors – launched during Thursday’s event – the company will also be introducing four new passenger carrier buses, heavy load vehicles for baggage carrying, a new baggage staircase and a mechanism to assist with boarding and unboarding patients with medical conditions within a period of 60 days.

He added that the projects are being conducted under the government’s 100 day policy implementation plans.

The record US$511 million development of the airport under Indian infrastructure giant GMR was prematurely terminated under the previous administration, prompting the filing of a US$1.4 billion arbitration case in Singapore.

Saleem explained that the ground handling equipment currently in use is old and damaged, which causes unnecessary delays in operations, assuring that the introduction of new equipment will allow passengers to observe a “remarkable improvement” in the speed of service.

“We are spending company money on these programs. We have not been able to purchase any such equipment since 2007,” he was quoted as saying.

Many projects underway

According to Saleem, the program is one among many development plans the company is undertaking.

Stating that the biggest challenge faced by the airport today is the issue of flight trafficking, he said that a permanent solution to overcrowding in the airport can only be found through the building of a second runway. He did, however, note that such a project would take a “tremendous amount of time”.

Adding that a review of the previously compiled Scottwilson development master plan of the airport would commence in the next two weeks, Saleem said that compiling such a plan anew would take around one year. He stated that global experts will be arriving within two weeks to assist in reviewing and updating the plans.

While the government is deliberating on undertaking such a project, said Saleem, reclaiming land and building a new runway would itself take at least two years to reach completion.

“Flyme is bringing in a new plane. Maldivian is also bringing in another new plane. So we need a runway upgrade at the airport as soon as possible. Nevertheless, it is not an easy thing to do,” he said.

The managing director added that, while these projects are pending, the airport is currently implementing smaller development projects immediately. As an example, he revealed that the construction of a new 35,000 square meter flight apron will be contracted to an external party in the next two weeks.

“We cannot do airport development in bits and pieces separately. It must be done all together. Once the Stockwilson plan is reviewed, we can begin the main work,” he said.

Saleem added that in 2014 itself, the airport traffic will increase immensely, and that the government will be focusing on reviewing the Stockwilson plan with a focus on connecting the airport to Malé.

GMR welcome to engage in other projects, not airport development: president

Meanwhile, President Abdulla Yameen has told Indian media that the Maldivian government is not even considering resuming the airport development contract with Indian infrastructure giant GMR.

While he repeated that the government is seeking an out of court settlement regarding the arbitration case concerning the cancellation of the GMR contract in the Waheed administration, Yameen said that the Maldives “had nothing against the GMR itself”.

“I am not saying we are saying no to GMR. What I am saying is total management of the airport is far too important for the Maldivian government (to hand over). We have nothing against GMR of any Indian company. It is just that the international airport is far too important for us, commercially and from a security point of view,” Yameen is quoted as saying to Indian publication The Hindu.

“The total operation of our airport will probably not go to any foreign party. Probably not even go to a Maldivian company. It will be undertaken by the MACL, a 100 percent government company,” he stated.

Yameen affirmed that deliberations of settling the GMR issue out of court has already begun, adding that the company is welcome to pursue other projects in the country.


Flight delays as airport ground handling staff call in sick en masse

Ground handling staff at Maldives’ Ibrahim Nasir International Airport (INIA) have called in sick en masse in protest over pay grievances, leading to flight departure delays today.

The Maldives Airports Corporation Ltd (MACL) has downplayed the matter and said “operations at the airport are normal.”

A ground handling staff member who wished to remain anonymous told Minivan News that staff called in sick starting at 11:00 pm on Wednesday. Only eight of the 16 scheduled staff turned up for the night shift, while only four of the 16 scheduled staff reported for the morning and afternoon shifts, the source said.

MACL’s HR Manager Ali Huzaim confirmed that “some ground handling staff have called in sick,” but said the reduced man power had not affected flight departures.

“Labour laws guarantee employees 30 days of sick leave in a year. This is a right they have. There are some who have called in sick in the ground-handling department. However, there have been no flight delays because of reduced manpower,” Huzaim said.

CEO of MACL, Ibrahim ‘Bandu’ Saleem said 10-12 percent of the company’s employees were on leave at any given point and that today was no different.

“Operations are normal at the airport,” Saleem said.

Despite Huzaim’s claim there were no delays in flight departures, ground handling staff told Minivan News that Condor Flight DE 3327, Air India Flight AI 264, Hainan Airline Flight HU 7952, Singapore Airline Flight SQ 461, and British Airways Flight BA 2042 faced between 30-45 minutes delay in departure.

Minivan News confirmed the reports independently. Flights arriving in the Maldives meanwhile experienced only minor delays today.

“MACL has not carried out work appraisals for two years now, which means we do not get any promotions. The company regulations stipulate that a percentage of profits be distributed among the company’s staff. However, that has not happened. Further, we still continue to turn up to work in GMR’s uniforms,” they said.

GMR-MAHB won a concession agreement to manage and upgrade Ibrahim Nasir International Airport (INIA) under the Maldivian Democratic Party (MDP) administration, which was ousted from power on 7 February 2012 amid protests and a police mutiny.

The new government, comprising a coalition of former opposition parties under current President Mohamed Waheed, declared in late 2012 that GMR-MAHB’s agreement was ‘void ab initio’ (invalid from the outset) and gave the developer seven days’ notice to leave the country.

“We have had several meetings with [MACL management] about our grievances, but we have had no response from them,” the source added.

Meanwhile, Air Traffic Controllers (ATC) who started calling in sick en masse on Sunday, Monday, Tuesday and Wednesday have resumed work following a Wednesday night meeting with Saleem, an air traffic controller who wished to remain anonymous told Minivan News.

The ATCs are demanding the reinstatement of a professional grading system, adherence to International Civil Aviation Organisation (ICAO), and the holding of the presidential run-off election that remains suspended by the Supreme Court.

On Wednesday, MACL denied the delays from the ATCs calling in sick; however, pilots and Trans Maldivian Airways confirmed some delays due to the protest.

Ahmed Fazeel, Business Development Manager at Trans Maldivian said although seaplanes were operating without any delays today, the company had experienced delays on Wednesday because of “something to do with the air traffic controllers.”

Staff at Maldives Customs Services also stopped work today in protest over corruption and unequal treatment of employees.

The Tourism Employees Association of the Maldives (TEAM) and Maldives Ports Workers Union (MPWU) last week threatened prolonged strikes over the Supreme Court’s order to delay elections in an ongoing case filed by Jumhooree Party to annul the first round of presidential elections held on September 7.

The two organisations have told Minivan News they are waiting on the Supreme Court verdict to decide how to proceed.