GMR – Page 17 – Minivan News

MACL chairman case sent to Civil Court

A case concerning the decision to allow the company developing Ibrahim Nasir International Airport (INIA) to deduct an Airport Development Concession (ADC) from government fees has been forwarded to the country’s Civil Court.

The Anti Corruption Commission (ACC) has alleged that former Maldives Airport Company Ltd (MACL) Chairman ‘Bandhu’ Ibrahim Saleem agreed to deduct the ADC without approval from the company’s board, according to local media. As all three stakeholders had not signed the changes to the agreement, it could not be considered legally binding, the ACC reportedly claimed in the Haveeru newspaper.

The Airport Development Charge (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 ADC charge was deemed an additional tax last year after the then-opposition Dhivehi Qaumee Party (DQP) filed a case with the Civil Court. The court went on to rule against the charging of the ADC.

GMR subsequently deducted $8.1million, the money it would have received from the ADC, from its first quarter concessionary payments to the government.

Likes

(0)Dislikes

(0)

GMR announces dollar payments to employees as ruling parties continue call for nationalisation

Additional reporting by JJ Robinson

Despite recent government assurances that Indian investments in the Maldives would be protected, parties in the now ruling coalition have renewed calls for the airport to be nationalised.

Indian infrastructure company GMR has meanwhile informed staff that it will pay 50 percent of employee salaries in US dollars from July onwards, as part of the new employee benefits scheme. Further benefits announced include the payment of Ramadan bonuses in US dollars, and a profit-sharing scheme awarding employees a one percent share of the company’s profits from 2011.

The decision follows a week in which former opposition parties – now in a coalition government following the controversial transfer of power of February 7 – sent replies to President Mohamed Waheed Hassan’s request for opinions on the airport, the development and management of which was taken over by GMR in 2010 in a 25 year concession agreement signed with the now-opposition government.

The pro-government parties – including the Dhivehi Rayithunge Party (DRP), Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – advised Waheed that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised – the ‘Joint Statement by political parties opposing government’s efforts to hand over the Male’ International Airport to a foreign party’.

The agreement endorsed six main points which included taking legal action to prevent the government’s decision to award the contract to GMR.

GMR’s contract is currently under scrutiny by a committee appointed by President Waheed, which includes the Attorney General, the Finance Minister and the CEO of Maldives Airports Company Ltd (MACL).

A delegation from the International Finance Corporation (IFC) – a member of the World Bank group and the largest global institution focused on private sector in developing countries, which brokered the deal between GMR and the government of Maldives – recently addressed the government’s concerns over the concession agreement in a meeting with senior government officials.

The DQP – a small but extremely vocal party which has consistently opposed the airport deal and filed court cases against it – today accused the IFC of mishandling the bid evaluation report of the airport privatisation agreement. A 24-page book released by the DQP while it was in opposition presents the government’s lease of Ibrahim Nasir International Airport (INIA) to developer GMR as a threat to local industry that will “enslave the nation and its economy”.

“IFC is a company associated with GMR in many other projects. It is clear that IFC had issued loans to GMR on other projects. We believe that the government selected IFC to facilitate GMR for the airport project,” an anonymous party source told newspaper Haveeru.

President’s Office Spokesman Abbas Adil Riza said the airport contract is “an important national issue” which “must be dealt with after discussions with coalition partners.”

However, speaking at the ceremony to mark the 100th day of his administration, President Waheed said he did not wish to involve “political disputes” in reviewing the GMR contract and that foreign investments must be handled as business dealings.

“I do not believe bringing in our political quarrels into the GMR issue will be good for our future and our economy,” said the President.

During President Waheed’s recent trip to India, he also assured Indian Prime Minister Manmohan Singh that the Maldives government would adhere to all agreements between Indian and Maldivian businesses and expressed the Maldives’ desire for further Indian investment in the country.

“My government is a continuation of the previous government under then President Nasheed, and hence there should be no doubt on this score,” he was quoted as telling Manmohan Singh in the Daily News.

In addition, during the India trip, Maldives Foreign Minister Dr Abdul Samad Abdulla assured his Indian counterpart that all existing investment agreements would be honoured despite the change of government on February 7.

According to Indian newspaper The Hindu, Samad assured Indian External Affairs Minister S.M. Krishna that the government’s policy was unchanged, after his counterpart expressed the desire that the Maldives remained friendly to outside investors.

Hostile politics

Despite these assurances, the revelation that major political parties now in government continue their endorsement of airport nationalisation, and challenging of the IFC’s competency, could increase tensions between the government and GMR and weaken investor confidence in the Maldives – at nearly US$500 million, the airport concession agreement is the country’s single largest foreign investment.

Declining to comment on the official standing of Dhivehi Rayyithunge Party (DRP) on the GMR deal, the party’s Deputy Leader Dr Abdulla Mausoom said the DRP was against privatising “assets of national importance”.

Jumhoree Party (JP) Spokeman Moosa Rameez said the party had written to the President stating their wish to adhere to the agreement signed between the then opposition parties.

Although the parties in the government had expressed several concerns including “threats to national security” in “giving away the airport to foreigners”, the government’s current concerns are focused on the disputed concession fees in the agreement.

Under the concession agreement in the GMR contract, a US$25 charge was to be levied as an airport development charge (ADC) on all outgoing passengers to part-fund the infrastructure project.

However, while in opposition, the DQP – which today forms part of Waheed’s national unity government – filed a successful case in the Civil Court in December 2011 to block the payment of the charge, on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government had agreed to deduct the ADC from the concession fees payable by GMR while it sought to appeal to verdict. As a result, Dr Waheed’s government received only US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting.

In April, Finance Minister Abdulla Jihad declared that the Maldives Airport Company Limited (MACL) would be unable to continuing paying the ADC without risking bankruptcy.

The Transport Ministry has since ordered GMR to pay the shortfall in concession fees. In response, GMR in early May “expressed a desire to exempt Maldivian citizens from the ADC”, as “the majority of Maldivians travel abroad for the purposes for healthcare and education.”

“The ADC was conceptualised and incorporated into the concession agreement by the government to yield a maximum return to the Maldives while ensuring development of the airport and a reasonable return to the successful bidder,” GMR said, in a statement at the time.

“We are sensitive to the apprehensions expressed regarding ADC; and would like to assure all concerned that the management of GMR Male International Airport is doing everything possible by offering viable options to reduce the impact on the Maldivians, thereby helping the government for the ADC implementation.”

GMR has expressed confidence in the strength of its contract, which has a facility for dispute arbitration in Singapore, as well as an option for the government to buy out the agreement – a cost likely to reach several hundred million dollars.

However the country is already facing a crippling budget deficit of 27 percent, a plunge in expected revenue of 23 percent and an increase in spending of almost 24 percent, a time when investor confidence has been impacted by repeated challenges to the government’s legitimacy by the MDP.

Earlier this week the government refused to comment on claims made in local media by JP Gasim Ibrahim that the Maldives was now bankrupt and already unable to pay some civil servants.

Likes

(0)Dislikes

(0)

ACC wades into airport development charge debate

The Anti-Corruption Commission (ACC) has issued a statement in support of the government’s bid to obtain concession fees lost due to the legal debacle surrounding the levying of an airport development charge (ADC) by airport developer GMR.

A Civil Court case filed by the then opposition Dhivehi Qaumee Party (DQP) late last year ruled against the charging of an ADC, as stipulated in GMR’s contract with the government-owned Maldives Airports Company Limited (MACL).

The court decision compelled the then-ruling Maldivian Democratic Party (MDP) to deduct the ADC charges from the concession fees due the government, which was pending appeal prior to the change of government under controversial circumstances on February 7.

However as a result of the DQP’s successful court case while it was in opposition, the government only received US$525,355 out of an expected US$8.7 million in concession fees for the first quarter of 2012.

The Transport Ministry has maintained that the former government’s decision to deduct the fee was illegitimate, initially claiming the authorisation letter was invalid as the new government had reappointed the MACL board, and insisted GMR pay the concession fees due. GMR has maintained that the ADC is chargeable under the terms of its concession agreement, and offered to exempt Maldivian nationals from paying the fee.

In its statement last week, the ACC claimed that according to article 9 of the Public Finance Act, the Finance Minister was not authorised to forgo revenue to the state without submitting the figures to the President under guidelines set by the Auditor General.

The ACC statement alleged that former MACL Chairman ‘Bandhu’ Ibrahim Saleem agreed to deduct the ADC and insurance surcharge without approval from the company’s board. As all three stakeholders had not signed the changes to the agreement, it could not be considered legally binding, the ACC claimed.

The ACC contended that the clauses in the concession agreement (18.2 and 18.3) that allow changes to the contract under certain political circumstances could not be activated as the Civil Court ruling was not a political decision, despite the case being filed by a political party.

That case was filed by DQP in a long-standing campaign against Nasheed’s government awarding the airport redevelopment to GMR. DQP leader Dr Hassan Saeed is now President Mohamed Waheed Hassan’s special advisor, while DQP Vice-President Dr Mohamed Jameel is the new Home Minister.

A 24-page book released by the DQP while it was in opposition presents the government’s lease of Ibrahim Nasir International Airport (INIA) to developer GMR as a threat to local industry that will “enslave the nation and its economy”.

Former President’s Office Press Secretary Mohamed Zuhair at the time of the pamphlet’s publication said that he felt the title’s wording was “very strong”, and drew a faulty comparison between international cooperation for mutual benefit and foreign occupation of a people and market for selfish purposes.

“The purpose of all this is to make Maldivians mistakenly feel like they are under occupation and the country is being sold out,” claimed Zuhair at the time.

Likes

(0)Dislikes

(0)

Transport Minister backs MACL, orders GMR to pay US$8.2 million

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 stance

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.

Likes

(0)Dislikes

(0)

GMR offers to exempt Maldivian nationals from airport development charge

GMR has offered to exempt Maldivian nationals from paying the contentious Airport Development Charge (ADC), in a bid to end a legal and contractual stalemate that threatens to bankrupt the Maldives Airport Company Limited (MACL) and deprive the government of the majority of all airport revenue.

The Indian infrastructure giant signed a 25 year concession agreement with former President Mohamed Nasheed’s government to upgrade and manage Ibrahim Nasir International Airport (INIA). Under the concession agreement, a US$25 charge was to be levied on all outgoing passengers to part-fund the US$400 million upgrade.

However while in opposition the Dhivehi Qaumee Party (DQP), led by Dr Hassan Saeed, now President Dr Mohamed Waheed’s special advisor, filed a successful case in the Civil Court in December 2011 to block the payment of the charge, on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government had agreed to deduct the ADC from the concession fees payable by GMR while it sought to appeal to verdict. As a result, Dr Waheed’s government received only US$525,355 from the airport for the quarter, compared to the US$8.7 million it was expecting.

In a statement today, GMR said the government had “expressed a desire to exempt Maldivian citizens from the ADC”, as “the majority of Maldivians travel abroad for the purposes for healthcare and education.”

GMR presented the government with two options:

Option 1: No Maldivian passport holder will have to pay ADC. Every departing foreign passenger will pay an ADC of US$28.00; or
Option 2: Maldivians travelling to SAARC countries will not have to pay any ADC. Every Maldivian Passport holder departing to countries other than SAARC and every foreign passenger will pay an ADC of US$27.00.

No fee would be charged to either Maldivians or foreigners using the domestic terminal, the company noted.

In the statement, GMR noted that the government received US$33 million in 2011 from airport concession fees, “three times the money the government ever made in a year [from the airport] before privatisation.”

Following construction of the new terminal in 2015 – including “a state-of-the-art 600,000 square foot integrated Passenger Terminal and a 20,000 square foot VIP terminal, and various other airside and landside developments,” expected revenue from the airport to the government was expected to reach US$50 million per year, GMR observed, and almost US$100 million from 2021 as passenger numbers increased.

“In effect, GMIAL’s contribution to the government would be over US$2 billion over the concession period of 25 years, which will make a very significant contribution to the economy of the Maldives.”

President’s Office Spokesperson Abbas Adil Riza said the government had not yet officially received details of the offer, but said that such an offer would be evaluated by the Attorney General’s office “to see whether it is in line with the Financial Regulation Act.”

Attorney General Azima Shakoor was yesterday reported as expressing concern that settling the issue would be “quite difficult”, but vowed that “the government would settle the issue for the benefit of the country.”

On May 2 President Dr Mohamed Waheed told media at the inauguration of the Civil Air Navigation Services Organisation (CANSO): “I do not believe [the ADC] can be charged in the current situation because of the court’s decision.”

Likes

(0)Dislikes

(0)

Waheed opposes GMR’s concession fee deduction, seeking a “solution”

President Dr Mohamed Waheed Hassan has said that the government is seeking a “solution” to the deduction of US$8.1 million from concession fees paid by GMR, the Indian infrastructure giant which has been developing and operating Ibrahim Nasir International Airport (INIA) since it was awarded the concession by former President Mohamed Nasheed’s administration in November 2010.

The government received only 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) chargeable under its contract but which was thrown out after a Civil Court case on the matter was filed by the opposition during Nasheed’s tenure.

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 Civil Court blocked the fee on the grounds that it was essentially the same as a pre-existing Airport Services Charge (ASC), and that any new fees would constitute a new tax and was subsequently required to go through the People’s Majlis.

The case was filed by then-opposition Dhivehi Qaumee Party (DQP) – which had opposed the handing of the airport to GMR.

“I do not believe [the ADC] can be charged in the current situation because of the court’s decision,” Dr Waheed stated while speaking to the media at the inauguration of the Civil Air Navigation Services Organisation (CANSO) Asia-Pacific Conference held today in the Kurumba Maldives Resort.

According to the President, GMR can only take the Airport Development Charge following the “completion of all necessary legal procedures”.

“We are now having discussions with GMR. The government has now formed a team. As they are proceeding with the discussions, I believe a solution will be found without further delay,” President Waheed noted.

“Some of the things related to [the ADC] must be coordinated with the parliament. Therefore, when parliament convenes after the recess, we will submit the matter. So the work will proceed with parliament’s decision,” he said.

Parliament is now in recess until early June.

Managing Director of the Airports Company Mohamed Ibrahim was recently quoted in the local media as saying that the current administration does not support the decision of former President Mohamed Nasheed’s government to allow GMR to deduct the ADC from the concession fees.

GMR has been asked to reimburse the deducted amount, Ibrahim said.

GMR has not commented recently on the subject, however it noted following the civil court ruling that the payment of a development fee was “a common concept in many airports globally”.

“The reason for the inclusion of ADC in many global concession agreements is to address the funding needs to meet the investment model required to upgrade and develop new airport facilities at significant costs,” GMR stated.

The company further stated that the charge was included in the concession fee proposed between GMR and the government in 2010.

Speaking at the groundbreaking ceremony for INIA’s new terminal on December 19, then-President Nasheed said he wished to assure GMR that the government was “200 percent behind your contract, and every single other contract the government has signed with any other foreign party in this country. Not just contracts signed by our government, but also contracts that any ruler of the Maldives has signed with any party. We will honour it.”

Likes

(0)Dislikes

(0)

GMR deducts US$8.1 million from concession fees for 2012 first quarter

Indian infrastructure giant GMR, appointed by former President Mohamed Nasheed’s administration to manage and develop of the Ibrahim Nasir International Airport (INIA), has deducted US$8.1 million from concession fees paid to the government for the first quarter of 2012.

GMR took over the management of INIA from the government-owned company Maldives Airports Company Limited (MACL) in September 2010. According to a statement from the MACL, the company 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 payment for airport development fees and insurance surcharge.

However the then-opposition Dhivehi Qaumee Party (DQP), which had ardently opposed the handing of the airport to GMR, won a case in the Civil Court last year blocking GMR from charging the ADC.

The Civil Court blocked the fee on the grounds that it was essentially the same as a pre-existing Airport Services Charge (ASC), and that any new fees would constitute a new tax and was subsequently required to go through the People’s Majlis.

Following the court ruling former President Nasheed’s administration agreed that the ADC would have to be deducted from GMR’s concession fee paid to the MACL.

Managing Director of MACL Mohamed Ibrahim told Minivan News the company would not comment on the matter.

GMR paid MACL US$ 7.79 million in variable annual concession and fuel concession fees for the fourth quarter of 2011, after deducting US$ 100,000 as payment for insurance surcharge.

New Finance Minister Abdulla Jihad has previously said the ADC issue will bankrupt the MACL.

“I don’t believe that GMR can deduct that amount from the payment owed to the government. The estimated US$30 million for this year must be paid. If the payment is not received it would be difficult to run the Airports Company,” Jihad said.

“The Civil Court ruled against that charge. Hence that amount must not be deducted from the payment to the government which would reduce its income,” Jihad argued. ”The Airports Company might face losses if that happens,” he said.

Meanwhile, new Foreign Minister Dr Abdul Samad Abdulla assured his Indian counterpart that all existing investment agreements would be honoured despite the change of government on February 7.

Longstanding opposition

The contentious Civil Court case was filed by DQP in a longstanding campaign against Nasheed’s government awarding the airport redevelopment to GMR. DQP leader Dr Hassan Saeed is now President Mohamed Waheed Hassan’s special advisor, while DQP Vice-President Dr Mohamed Jameel is the new Home Minister.

Former President’s Office Press Secretary Mohamed Zuhair at the time of the pamphlet’s publication said that he felt the title’s wording was “very strong”, and drew a faulty comparison between international cooperation for mutual benefit and foreign occupation of a people and market for selfish purposes.

“The purpose of all this is to make Maldivians mistakenly feel like they are under occupation and the country is being sold out,” said Zuhair, who pointed out that the government “wouldn’t have gone out for an international bid [on the airport project] if there was a way to borrow money and do it internally.”

He explained that the airport now yields “a bulk” of the national revenue, in dollars: “If foreign visitors increase, income increases. It’s simple math.”

GMR has also drawn the ire of local company MVK Maldives Pvt Ltd after INIA, backed by a civil court ruling, refused to renew MVK’s lease and ordered the MVK to vacate the Alpha MVKB Duty Free shop and hand the premises to GMR.

Consequently, DQP MP Riyaz Rasheed submitted a resolution to the Majlis to prevent GMR from taking over the management of duty free shops and bonded warehouses from local businesses. However, Rasheed withdrew the resolution on April 2.

The decision to finalise a deal to develop Ibrahim Nasir International Airport (INIA) was agreed under the administration of former President Mohamed Nasheed in 2010. GMR emerged victorious in the bidding process, amid political opposition on largely nationalistic grounds.

Confidence in GMR’s $511 million dollar INIA project appeared to take a hit after the resignation of President Nasheed in February was accompanied by a five percent drop in GMR’s share prices before bouncing back shortly after.

Likes

(0)Dislikes

(0)

MPs ban Israel flights, but withdraw resolutions against Pillay, GMR, SAARC monuments

MPs passed a resolution on Wednesday preventing Israeli national airline El Al from operating scheduled flights to the Maldives until Majlis’ National Security Committee completes further investigation into the matter.

El Al had applied to the Ministry of Civil Aviation in May 2011 requesting permission to fly to the Maldives starting in December 2011.

The demand to ban Israeli flights was a key issue that united opposition parties and was used to spark protests against Nasheed’s administration in the last weeks of his presidency. Nasheed resigned from office on February 7, but later claimed he had been deposed through a coup d’état.

The opposition also called for the eviction of Indian infrastructure giant GMR, granted a contract by Nasheed’s administration to manage and develop Ibrahim Nasir International Airport (INIA). Further demands included a call to condemn UN Human Rights Commissioner Navi Pillay for her suggestion that flogging be abolished in the Maldives as a punishment for extra-marital sex, and the removal of “idolatrous” SAARC monuments from Addu City

However Progressive Party of the Maldives (PPM) MP Abdul Azeez Jamal Abu Bakr on Wednesday withdrew the Majlis petition against Pillay.

On April 2, Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed also withdrew a resolution calling on the Majlis to prevent GMR from taking over the management of duty free shops and bonded warehouse from local businesses.

Riyaz also withdrew a resolution calling on the government to remove SAARC monuments from Addu City on the same day. Addu City Council had removed the monuments in January after a public furor.

Ousted Maldivian Democratic Party (MDP) spokesperson and MP Hamid Abdul Gafoor said he was “at a total loss” since then-opposition “had picked such a fight with us over these matters.”

“They made these issues out to be a threat to national security, and now these issues have disappeared without a trace. This is just cheap and dirty politics,” Ghafoor said.

December 23 demands

Speaking to MDP supporters at a rally on Wednesday evening, Nasheed observed that the then-opposition’s rallying cries had died once they took power.

“I will always remember, at the last moment of the coup, a police man was shouting out, ‘My father built that airport at Hulhule,’ [complaining] that I had sold that airport to outsiders, that the police were there [protesting] to retake that airport,” he said.

Nasheed said his policies had been for the benefit of the ordinary citizen and “no one can take the airport away, whether it’s GMR or India or another country.”

“I want to tell that policeman and other police officers who brought about the coup, when the current administration eventually decides to allow Israel flights to land at the airport, it is for the benefit of the economy. Even though they polluted your hearts for political gain, you are now seeing all of their poems turning to mere lullabies,” he said.

The PPM, DQP, Dhivehi Rayyithunge Party (DRP), Jumhooree Party (JP) and Madhanee Ithihad (Civil Society Coalition) organised a well attended ‘Defend Islam’ rally on December 23 demanding that Nasheed prevent Israeli airlines from operating flights into the Maldives, remove “idolatrous” SAARC monuments and apologise for Pillay’s comments.

The ‘December 23 coalition’ accused Nasjeed of being “non- Islamic”, and said the decision to handover airport to GMR undermined Maldives’ sovereignty.

When Nasheed arrested Criminal Court Judge Abdulla Mohamed in January 2012, the coalition called on the police and military not to obey Nasheed’s orders and pledged allegiance to Nasheed’s VP Dr Mohamed Waheed Hassan.

On February 7, Nasheed publicly resigned from office after elements of the police and military staged a mutiny, and Waheed was sworn in as president on the same day.

Likes

(0)Dislikes

(0)

ADC issue will bankrupt Maldives Airports Company: Finance Minister Jihad

Finance Minister Abdulla Jihad has declared that the Maldives Airport Company Limited (MACL) is unable to pay the disputed airport development tax (ADC) without risking bankruptcy.

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 Indian infrastructure giant GMR in 2010. The anticipated US$25 million the charge would raise was to go towards the cost of renovating INIA’s infrastructure.

The ADC was to be charged after midnight on January 1, 2012, however the Civil Court blocked the fee on the grounds that it was essentially the same as a pre-existing Airport Services Charge (ASC). Following the court ruling the Nasheed government agreed that the ADC be deducted from its concession fee paid to the government-owned company in charge of the airport, Maldives Airport Company Limited (MACL).

On Monday however, new Finance Minister Abdulla Jihad told local newspaper Haveeru that MACL should not and could not cover the development costs.

“The Civil Court ruled against that charge. Hence that amount must not be deducted from the payment to the government which would reduce its income,” Jihad argued. “The Airports Company might face losses if that happens,” he said.

Speaking to Minivan News, Jihad said the next step was to ask GMR to resolve the issue after the board of MACL was reappointed.

“The new board will write to GMR… It is not for the Finance Ministry to interfere with the running of the [airport] company,” said Jihad.

He also claimed that he did not feel there were any specific provisions in the original deal detailing the collection of the ADC.

In a statement following the court decision, GMR stated that it “has been permitted to collect ADC and Insurance charge under the Concession Agreement signed between GMR-MAHB, Maldives Airport Company Limited (MACL) and The Republic of Maldives (acting by and through its Ministry of Finance and Treasury), and as such has set up processes for ADC collection from 1st January 2012 supported by an information campaign to ensure adequate awareness.”

CEO of INIA Andrew Harrison said that the company was unwilling to comment on the “sensitive” issue at this point.

Meanwhile, Foreign Minister Dr Abdul Samad Abdulla in assured his Indian counterpart that all existing investment agreements would be honoured.

According to the Indian newspaper, the Hindu, Samad assured Indian External Affairs Minister S.M. Krishna that the government’s policy was unchanged, after his counterpart expressed the desire that the Maldives remained friendly to outside investors.

Longstanding opposition

The contentious Civil Court case was filed by the then-opposition Dhivehi Qaumee Party (DQP), now part of the ruling coalition, in a longstanding campaign against Nasheed’s government awarding the airport redevelopment to GMR. DQP leader Dr Hassan Saeed is now President Mohamed Waheed Hassan’s special advisor, while DQP Vice-President Dr Mohamed Jameel is the new Home Minister.

Umar Naseer, now the deputy leader of the ruling coalition party the Progressive Party of Maldives (PPM), previously announced his intention to re-nationalise the airport should his party come to power. Naseer also contended that the airport deal would allow “Israeli flights to come and stop over [in the Maldives] after bombing Arab countries”.

The DQP campaigned vigorously against the deal, producing a pamphlet last December titled “Handing the airport to GMR: The beginning of slavery”, in which it criticised the arrangement with GMR.

In the document, the party argued that deal would allow the Indian company to “colonise” the local economy to the detriment of Maldivians. The DQP also questioned the legality of the deal, taking the issue of the ADC to the civil courts.

The document further alleged that the deal did not make adequate provision for replacing the runway, the condition of which has come under increasing criticism.

Head of the DQP Dr Hassan Saeed today said he was unable to comment on recent developments regarding GMR and the ADC.

The ADC was ruled by the court to be a new tax and was subsequently required to go through the People’s Majlis.

In light of this decision, GMR agreed with the Nasheed government in January that it would deduct the $25 per passenger fee from the concessionary charge paid each quarter to MACL. At the time the government acknowledged the compromise to be a temporary whilt maintaining its commitment to ADC in some form.

Confidence in GMR’s $511 million dollar INIA project appeared to take a hit after the the resignation of President Nasheed in February was accompanied by a five percent drop in GMR’s share prices before bouncing back shortly after.

Dr Waheed has reassured foreign investors that no businesses would be targetted for political reasons, although he did not rule out re-examining “certain deals”.

Attorney General Azima Shukoor announced that she had forwarded some of the previous government’s deals to the Auditor General but said no decision had yet been made on GMR. The government announced the suspension of any new Public Private Partnership schemes last month.

Spokesman for the Maldivian Democratic Party (MDP) Hamid Abdul Ghafoor argued that the new figures in the government were not doing enough to protect foreign investment.

“If they were going to protect the economy, they would be more proactive, rather than simply saying we can’t do it,” said Hamed. “This will seriously impact the the development of the airport. In the meantime, investors lose confidence.”

Likes

(0)Dislikes

(0)