Tag: GMR

“Yonder lies the greener pastures”: President Yameen inaugurates investor forum in Singapore

President Abdulla Yameen inaugurated the Maldives Investment Forum at Singapore’s Marina Bay Sands today with assurances to potential investors of the government’s commitment to fostering a business-friendly environment.

In his keynote address at the event, President Yameen said his administration was “cognisant of the needs of our investors and the requirements to strengthen and redefine the legal and regulatory environment governing foreign investments.”

“To address investment climate and to facilitate mega investments with attractive incentive packages, a Special Economic Zone Bill will be tabled in the parliament soon. Additionally, the Foreign Investment Act and Companies Act are being revised to cater the ever increasing needs of the modern foreign investors,” he said.

“Investment registration and facilitation has also been strengthened recently, with structuring of Invest Maldives as a one-stop shop for investment promotion, registration and facilitation.”

Over 160 companies and close to 200 representatives from 16 countries were present at the first overseas investor forum organised by the Maldives, Yameen noted, expressing gratitude for the “overwhelming support received for this forum.”

The new government has “embarked on an ambitious economic agenda to transform the economy” with the goal of becoming “a resilient, diversified high income economy in the next decade,” the president said.

He added that the government was committed to exploring “openings for increasing foreign investment flows to non-traditional sectors to lift Maldives beyond the image of a picturesque postcard.”

Yameen suggested that the success of the tourism industry over the past 40 years was due to “ingenuity, private enterprise and a liberal policy environment for foreign investments”.

Mega-projects

The projects for which the government was seeking investors were “designed to position Maldives to take advantage of its strategic location as a hub and gateway for commerce, innovation and creativity, linking rest of the globe with South Asia,” he explained.

Briefing participants on the five mega-projects envisioned by the government, Yameen said that the Ihavandhippolhu Integrated Development Project or iHavan “provides immense potential to capture substantive share of the trade and commercial opportunities in the South Indian Ocean and capture the trade flows crossing the seven degree channel.”

The government hoped to “engage private investors in the delivery of key pieces of infrastructure,” he said.

The other mega-projects or infrastructure development plans were concentrated in the Greater Male’ region, Yameen noted, which included the Hulhumale’ Youth City with further land reclamation and a maritime seaport project.

“With these investments, we foresee the region surrounding the Male’ City emerging as a vibrant commercial hub in the region,” he said.

The other mega-projects include the expansion of the Ibrahim Nasir International Airport (INIA), relocation and expansion of the central port to Thilafushi, and exploration for oil and gas.

Concluding his remarks, Yameen thanked foreign investors and senior businessmen from the Maldives for their “support and presence” at the forum, which gave the government “comfort and confidence” in its economic and trade policies.

Yameen said he hoped the forum would serve as “an avenue for enhancing understanding of the investment environment and opportunities in Maldives.”

He went on to congratulate Economic Minister Mohamed Saeed and his team for organising the forum and expressed gratitude to the key sponsors.

“Yonder lies the greener pastures,” he concluded by saying.

Yameen’s remarks were followed by presentations on the five mega-projects, a question and answer session with government ministers and speeches by Stephen Ho, President of Starwood Asia Pacific, Akhil Gupta, Chairman of Blackstone India, and William Ellwood Heinecke, CEO of Minor International.

President Yameen also launched the new Invest Maldives website at the forum this morning.

In his speech at the inauguration ceremony, Economic Development Minister Saeed revealed that the government was planning to hold a second investor forum in Shanghai, “the commercial capital of China.”

Moreover, at a press conference held at the forum, Tourism Minister Ahmed Adeeb reportedly revealed that the government has decided to lease islands for resort development for 99 years instead of the 50-year lease period at present.

Legislation will be submitted to parliament to authorise the extension, he said, which was intended to gain investor confidence.

Meanwhile, prior to departing for Singapore yesterday, President Yameen told the press that the government was certain it would have to compensate Indian infrastructure giant GMR for the premature termination of the concession agreement to develop and manage INIA.

Earlier this month, Yameen had said that the out-of-court settlement sought by GMR was too high, and that he would now await the outcome of arbitration proceedings in Singapore, which could take up to another two months.

The US$511 million contract awarded by the administration of former President Mohamed Nasheed was the single largest foreign direct investment in the Maldives’ history.

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Yameen concedes that GMR is owed some compensation

With additional reporting by Ahmed Rilwan

President Abdulla Yameen has today said the government was sure it would have to pay some compensation for cancelling the agreement made with the Indian infrastructure giant GMR to lease Ibrahim Nasir International Airport (INIA).

“The truth we should accept is that a government with all its sovereignty has given permission to a foreign party under an agreement,” said the president.

“So we believe some sort of financial compensation must be paid to them. A compensation must be given for taking the airport [from them]. What we are trying to make sure this compensation is not big but average.”

Yameen was speaking to the press before leaving for Singapore to take part in the Maldives Investment Forum – an event he described as “the first step taken towards a fresh start for the Maldives in today’s world economy”.

In November 2012, President Dr Mohamed Waheed’s cabinet declared the GMR agreement void ab initio – invalid from the outset – and ordered the developer to leave, just two years into its 25 year concession agreement.

President Yameen explained to the press today that his advisors believed that, if the arbitration panel could be persuaded that the deal had been anulled due to the airport’s national importance, the compensation would be small.

GMR had initially claimed US$1.4 billion – a figure greater than the Maldives’ annual state budget.

Yameen’s Progressive Party of Maldives (PPM) formed part of the Waheed coalition government, though it’s leader – former President Maumoon Abdul Gayoom – has since accuse Waheed of going against his party’s advice by failing to reach an amicable agreement with GMR and the Indian government.

During his first official state visit to Indian in January, Prime Minister Dr Manmohan Singh requested President Yameen to “amicably” settle the GMR airport issue.

Earlier this month, Yameen had said that the out-of-court amount sought by the infrastructure company was too great, and that he would now await the outcome of proceedings, which could take up to another two months.

The US$511 million concession agreement to manage and upgrade the airport – awarded under the former government of Mohamed Nasheed – was the single largest foreign investment in the Maldives’ history.

President Yameen will tomorrow give the keynote speak at the landmark investment forum, as he seeks to generate interest from foreign investors for five ‘mega-projects’ – one of which is the further development of Ibrahim Nasir International Airport (INIA).

As part of the president’s attempts to lure foreign investors back to the country, he has promised special economic zones which hopes will be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

Senior management of Singapore’s Changi International Airport visited the Maldives earlier this month, with Yameen explaining the purpose of the visit to press this afternoon.

“Changi’s management will be our final consultant with the terminal [project] and other consultancies required for the airport,” he explained. “We want to seek technical expertise and information on how to do things from Singapore Changi.”

“The project has progressed far now, Changi has expressed interest. So we believe all the supervisory and consultancy work of this terminal will be carried out by Changi.”

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Week in review: April 13 – 19

The disposal of around 120 animals confiscated from people’s homes stole the headlines this week, amid confusion as to why the decision to destroy the animals was made, and by which institution.

As part of a joint operation conducted on Saturday (April 12), relevant government authorities instructed police to confiscate all pets suspected of having been illegally imported.

These animals were promptly destroyed by the MNDF, while the fate of the slow loris – endangered in more ways than one – remained unclear as interested adoptees continued to face financial and bureaucratic obstacles.

Bureaucratic obstacles continued to hinder President Abdulla Yameen’s attempts to place his nephew in the role of Prosecutor General as the Majlis failed to return enough votes to approve Maumoon Hameed’s nomination.

Home Minister Umar Naseer this week lamented the ‘oversized democracy‘ inherited by the government, suggesting bureaucracy was thwarting his anti-drug camaign.

The government’s attempts to centralise control of the nation’s mosques through amendments to the Religious Unity Act met with greater successful as the president ratified the changes shortly before departing to Japan on an official state visit.

Prior to boarding the plane to Tokyo, Yameen told the press that he had been unable – and unwilling – to meet the demands of Indian company GMR for an out-of-court settlement regarding the terminated airport development deal.

It was revealed that the government will now await the outcome of the arbitration proceedings, expected within the next two months after hearings concluded this week.

Yameen’s trip to east Asia saw the Japanese government thanked for its generous history of developmental assistance in the Maldives as well an open invitation for private investors to continue the tradition.

Back on the home front, President Yameen acknowledged that the distribution of government positions among coalition partners had generated some tension, after rumblings of discontent from coalition leader Gasim Ibrahim.

No such discontent was found in a survey conducted by the Tourism Ministry this month which found 98 percent of tourists would recommend the Maldives as a holiday destination.

Eighty percent of those surveyed reported having holidayed within an hour of the capital Malé, a trend Addu City Council hopes to change with the establishment of a guest house promotion board in the country’s southernmost atoll.

The heavy concentration of tourists in Kaafu atoll brought the opposite response from Malé City Council, who passed a resolution opposing the development of Kuda Bandos – the only local picnic island available to the overcrowded capital’s residents.

Meanwhile, the Department of Heritage hopes to draw the attention of visitors to the Maldives’ cultural treasures, organising an exhibition of the country’s coral mosques as attempts to make UNESCO’s world heritage list continue.

The Ministry of Environment maintained that the country’s natural heritage can still be preserved if the world commits to a 1.5°C cap on global temperature rise, with Minister Thoriq Ibrahim pledging to increase renewable energy to 30% in the next 5 years.

Elsewhere, the High Court is now considering over a dozen election-related complaints following last month’s Majlis poll – though the arguments posited by Kaashidhoo MP Abdulla Jabir received short shrift from the Elections Commission’s lawyer.

Jabir’s Maldivian Democratic Party announced it would hold an event to mark Labour Day next month while taxi drivers failed to present a united front in protests against new regulations due to be implemented this week.

DhiFM remained steadfast in its defiance of the Maldives Broadcasting Commission – responding to criticism for posting upside down pictures by posting a similar image of the commission’s chair.

Corruption charges were pressed this week against controversial Supreme Court Judge Ali Hameed, while the Anti Corruption Commission asked the state to pursue charges against a former state minister for undue expenditure on sports activities.

Minivan News also took time this week to talk discuss the future of hydroponics in the country’s agriculture as well as interviewing the Maldives’ first female DJ.

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GMR arbitration verdict to take up to two months

The government has confirmed that arbitration proceedings regarding the terminated GMR contract – expected to be concluded this week – may take up to two months to reach a verdict.

President Abdulla Yameen had recently stated that the government had failed to reach an out of court settlement with the Indian infrastructure giant, which is seeking US$1.4billion in compensation after the premature annulment of its 25-year concession agreement.

“But the thing is, the GMR is seeking a huge amount as compensation. This government, however, does not believe that we can – or indeed that we need to – pay such a large amount as compensation,” Yameen stated prior to his departure to Japan earlier this week.

“So their [GMR’s] decision now is to wait until the arbitration case is concluded. So we will carry on after the arbitration case is completed,” he continued.

Yameen revealed his intention to seek further foreign investment in the development of Ibrahim Nasir International Airport (INIA), with Japanese, Singaporean, and Middle Eastern investors all being courted.

The president confirmed that the arbitration case had commenced and that both Minister of Defence and National Security Mohamed Nazim and former Attorney General Azima Shakoor had attended the hearing as witnesses from the state.

“Those from our government who were handling the matter at the time have attended the first session’s hearing and provided the necessary information,” Yameen said.

New facilities

“We are not seeking just one single investor for the airport. This is because development of the airport will be a huge project,” Yameen told the media on before his departure on Sunday (April 13).

“What we are speaking about is a new airport. We want it to be an iconic building with additional runway, an additional terminal and new terminal facilities.”

The Maldives Airport Company Limited (MACL) has today confirmed that a second runway will form a crucial part of any new development – the need for which has come to the fore again this week as the state of the airport’s runway partly to blame for the bursting of landing aircraft’s tire in December 2011.

United Arab Emirates’ General Civil Aviation Authority found that the burst tire of a landing Emirates flight was partly caused by the accumulation of standing water on the runway.

The reports advised the Maldives Civil Aviation Authority to “ensure that Operators utilising Male’ airport are fully aware of the runway condition until the runway enhancements are finalised”.

Demands for a second runway – not included in the initial agreement – were among the criticisms levelled at the US$500million GMR concession agreement, before the deal was declared void ab initio (‘invalid from the outset’) by the Dr Mohamed Waheed government.

With speculation about excessive foreign influence accompanying the anti-GMR campaign prior to the contract’s termination, President Yameen has assured that overall  management of the airport will stay in the hands of MACL.

New investors

“We are also thinking about making the airport into one that can carry over 5 million passengers. We want the airport to be one that can cater to tourism growth within the next 50 years,” Yameen explained this week.

“Therefore, this is a project worth at least 600 to 800 million dollars. Of the various components of the airport, we are approaching Japan to invest in terminal facilities and a terminal building. So this trip [to Japan] is not one where we are seeking a single party to develop the whole airport.”

He further stated that Vice President Dr Mohamed Jameel Ahmed had held positive discussions with Kuwait over airport development assistance while he had personally met with Saudi Arabia’s infrastructure giant Bin Laden Group, who also expressed interest in the project.

While the Minister of Economic Development Mohamed Saeed and Minister of Tourism Ahmed Adeeb are working on a concept design of the airport, the senior management of Singapore’s Changi airport were being mooted as consultants for the development.

Yameen will travel to Singapore later this month to inaugurate the Maldives Investment Forum, a government initiative to showcase ‘high level’ investment opportunities in the country, including the development of INIA.

The president has previously assured foreign investors that future investments will in the Maldives are safe, and will soon be protected by enhanced legislation.

“We are going to open up the Maldives in a huge way to foreign investors. Our thirst cannot be quenched. The opportunity to foreign investors is going to be enormous,” he told potential developers earlier this month.

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Amount proposed by GMR for out-of-court settlement too big, says president

President Abdulla Yameen has said that the compensation proposed by GMR for an out-of-court settlement is too big and the government does not believe that it has to be paid.

“GMR is seeking a very big compensation. We, the government, do not believe that we can pay such an amount, or that it is necessary to pay it. So now we are facing [the issue of] unmatching numbers,” Yameen was quoted as saying in local media.

Yameen suggested that the large compensation being sought is the reason the parties have failed to reach an out-of-court settlement.

Both sides are now awaiting the conclusion of the arbitration, revealed Yameen, and further discussions will continue afterwards if it is necessary. He did not reveal the amount proposed for an early settlement.

Proceedings of the arbitration case, in which GMR is seeking US$1.4 billion as compensation for the abrupt termination of the Ibrahim Nasir International Airport (INIA) contract, has already begun in Singapore.

Last week the government appointed sitting Supreme Court Judge Abdulla Saeed as a legal expert in the arbitration case, with the Saeed promptly travelling to Singapore.

According to the Judges Act, however, any judge leaving the country to take part in a judiciary or law-related event should first obtain special permission from the independent Judicial Service Commission (JSC).

Judicial Service Commission (JSC) member Sheikh Shuaib Abdurahman – one of the two members legally required to give consent for such a trip – has said said he was unaware of Judge Abdulla Saeed’s departure, though the Attorney General’s office has told local media that all necessary permissions were acquired.

The Maldives’ legal team includes Attorney General (AG) Mohamed Anil,  Deputy AG Ahmed Usham, and a team of experts from Singapore and the UK.

Haveeru has reported that GMR hired former Sri Lankan Attorney General Mohamed Shibly Aziz, former Maldivian Deputy Solicitor General Ibrahim Riffath, and Maldivian lawyer Fayaz Ismail to assist them in matters related to the Maldivian legal system.

The AG’s Office is now looking into Riffath’s involvement in the case, stating that he could have accessed privileged information when working at the office during the cancellation of the GMR agreement and several other GMR related cases before that.

The office has noted that information obtained through holding such a position cannot be utilised in such circumstances.

The AG’s Office earlier stated that the Maldives would be represented by Singapore National University Professor M. Sonaraja, while former Chief Justice of the UK Lord Nicholas Addison Phillips were to represent GMR.

The arbitrator – mutually agreed upon by both GMR and the Government of Maldives – is retired senior UK Judge Lord Leonard Hubert Hoffman.

Legal experts are expected to present their opinions to the arbitration panel today, local media has reported, while the process is expected to continue until Wednesday.

Airport development plans

The government owned Maldives Airports Company Limited which took over the airport’s management from GMR after the cancellation of the agreement, is now planning further development.

A US$5 million work project to develop ground handling at INIA was announced in January, with more plans to be announced in the near future based on a revised version of the previously compiled Scott Wilson airport development master plan.

Since assuming office President Yameen has made repeated assurances that the country is safe for foreign investors, calling for new developers from the Arab-Muslim countries in particular.

“The thrust of the government is to welcome foreign investment, ‎and to assure all investors that your investment – your money – is safe ‎with us, and your stay here in Maldives is going to be conducive ‎for you”, Yameen said earlier this month at a housing project inauguration in Hulhumalé.

The president yesterday shared the government’s INIA development plans with a delegation of Singapore’s Changi Airport Group and Changi Airport International in a meeting at the President’s Office, although a subsequent press release did not specify the exact reasons for the visit.

President Yameen will also travel to Singapore later this month to inaugurate the Maldives Investment Forum, a government initiative to showcase ‘high level’ investment opportunities in the country.

During the forum, the government’s development plans and projects will be revealed to international corporate and individual investors. One of the key five projects being scheduled for presentation is the the development of INIA.

Earlier this month Maldives Tourism Development Corporation Plc – 45 percent of whose shares are held by the government –  sold Herethera Island Resort in Addu City for US$33 million to Singapore’s Canaries Private Ltd.

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Arbitration proceedings in GMR case to begin within the week

Proceedings in the US$1.4 billion GMR arbitration case will begin this Thursday, local media has reported today.

Officials at the Attorney General’s Office told Minivan News that, while they could not confirm the precise dates, representatives of the office working on the case are currently in Singapore.

Citing sources within the government, media has reported that both the government of Maldives and the state-owned Maldives Airports Company Limited (MACL) will be represented at the hearings which they have said will begin on Thursday (April 10) for six days.

The case was filed following the premature termination of the a 25-year concession agreement to develop Malé’s Ibrahim Nasir International Airport (INIA) by the government of President Dr Mohamed Waheed in December 2012.

The Attorney General’s office has earlier stated that the Maldives will be represented by Singapore National University Professor M. Sonaraja, while former Chief Justice of the UK Lord Nicholas Addison Phillips will represent GMR.

The arbitrator – mutually agreed upon by both GMR and the Government of Maldives – is retired senior UK Judge Lord Leonard Hubert Hoffman. Both GMR and the government have earlier stated that arbitration proceedings will be concluded around May this year.

In 2010, GMR Male International Airport Pvt Ltd, owned by GMR-MAHB consortium, was awarded a concession contract to manage INIA in an investment worth US$511 million – the largest in the Maldives history.

In December 2013 President Waheed’s government prematurely terminated the concession agreement claiming that it was ‘void ab initio’, or invalid from the outset.

The management of INIA was returned to the state-owned MACL which at the time was still responsible for some aspects of airport operations.

After an injunction blocking the Maldivian government from voiding the agreement was overturned by the Supreme Court in Singapore in June 2013, GMR initiated the arbitration process claiming US$1.4 billion in compensation for “wrongful termination”.

During the second round of procedural hearings in August 2013, the tribunal acceded to GMR-MAHB’s request to split the proceedings in two – firstly determining liability, before quantifying the amount of compensation to be paid separately.

The proceedings will consider GMR’s claim is for compensation as per the termination clause of its concession agreement, a parallel claim for loss of profits over the lifespan of the agreement due to its termination, and the Maldives government’s counter-claim for restitution should the tribunal decide in its favour.

Indo-Maldivian relations appeared to have be strained following the termination of GMR contract, although bilateral relations have improved with the election of President Abdulla Yameen.

Indian Prime Minister Dr Manmohan Singh has since requested President  Yameen to “amicably” settle the GMR airport issue.

Speaking to local media, Attorney General Mohamed Anil has earlier suggested the government had a strong case in the arbitration proceedings.

In separate Singapore-based arbitration proceedings, one of the project’s lenders, Axis Bank, was said to have sought payment of US$160 million for a loan guaranteed by the Maldivian Finance Ministry. These reports were subsequently denied by the government.

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Indian visa restrictions lifted

Indian High Commissioner Rajeev Shahare has announced that all visa restrictions on Maldivians travelling to India have been lifted.

Local media reported Shahare as saying that Maldivians could now get a 90-day visa for medical visits to India.

“This is a very very privileged aspect of visa, we have not granted to any other country. Other nationals are required to have a cooling-off period of two months. Maldivians will not have, because this is a very privileged, special relationship that we have between India and Maldives,” he said.

Coming at the end of a week-long celebration of Indian-Maldivian ties, the move represents a further thawing of relations that had become strained under the previous administration.

Visa regulations were tightened just weeks after the premature termination of a US$500 million airport development deal with Indian infrastructure giant GMR. Indian authorities at the time claimed the decision to have been intended to draw attention to the Maldives’ treatment of expatriate workers.

In an interview with Haveeru yesterday, Attorney General Mohamed Anil suggested the government had a strong case in the arbitration proceedings that have followed GMR’s expulsion.

Following an official state visit to Indian earlier this month, President Abdulla Yameen and Indian leaders were reported to have discussed the potential of reaching an out of court settlement.

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Former Finance Minister, MACL Chairman facing corruption charges

The Anti-Corruption Commission (ACC) has asked the Prosecutor General’s (PG) office to press corruption charges against former Finance Minister Ahmed Inaz, former Maldives Airports Company Ltd (MACL) Chairman ‘Bandhu’ Ibrahim Saleem, and former members of the company’s board of directors.

The senior officials of the Maldivian Democratic Party (MDP) government are accused of incurring financial losses to the state by amending the concession agreement with Indian infrastructure giant GMR to develop and manage the Ibrahim Nasir International Airport (INIA), the ACC said in a statement today.

The agreement was changed upon request by the Finance Ministry to reduce the concession fee on jet fuel sales from 15 percent of revenue to one percent, resulting in a shortfall of MVR53.8 million (US$3.5 million).

The ACC investigation found that the finance ministry disregarded professional advice over changing the clauses.

In addition to two counts of corruption charges, the ACC also asked the PG office to seek damages from the former minister, chairman, and board members as the alteration was approved with unanimous consent of the MACL board.

Along with Inaz and Saleem, former board members Mohamed Ibrahim of H. Noomuthy, Mohamed Waheed of Ma. Fehiali, Ahmed Murad of Ma. Bluegrass, Mohamed Shaz Waleed, Mohamed Shafeeq Mahmood of G. Meadow, and Adam Rasheed Ahmed of G. Thalvaaruge are also facing prosecution.

Concession agreement

GMR, in a consortium with Malaysia Airports Holding Berhad (MAHB), narrowly won the International Finance Corporation (IFC)-managed bid for the airport in 2010, and signed a 25-year agreement with MACL under the government of former President Mohamed Nasheed.

The then-opposition, including the Progressive Party of the Maldives, Jumhooree Party, Dhivehi Rayyithunge Party and Adhaalath Party, opposed the agreement primarily on nationalistic grounds, and alleged corruption in the bidding process.

Following the controversial transfer of presidential power in February 2012, after which opposition parties assumed control of the government, the administration of President Dr Mohamed Waheed declared the concession agreement ‘void ab initio’ (invalid from the outset), and gave GMR seven days’ notice to leave the country.

Meanwhile, in December 2012, the ACC sought corruption charges against former Finance Minister Mohamed Shihab and the MACL chairman over the decision to allow GMR to deduct a US$25 Airport Development Charge (ADC), stipulated in the contract, from concession fees owed to the state.

A report by the Auditor General found that concession revenue due the government had plummeted fourfold as a result of a Civil Court ruling that blocked the developer’s charging of of the US$25 ADC, on the grounds it was a tax and therefore required parliamentary approval.

According to the report, net concession revenue to the government had fallen to just US$6,058,848 in 2012, compared to US$25,424,877 in 2011.

Rather than appeal the Civil Court verdict obstructing the ADC, “The new government took the view that it would not be proper for it to intervene in the legal process for the benefit of a private concern,” the report noted, and instead, on April 19, 2012, informed the developer it was “retracting the previous agreement [to offset the ADC] on the grounds that the then Chairman of MACL did not have the approval of the MACL board to make the agreement.”

The government received US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting.

In the second quarter GMR presented MACL with a bill for US$1.5 million, and in the third quarter, US$2.2 million.

The Auditor General’s report acknowledged allegations of corruption in the deal, but finding the evidence “not conclusive on this point”, deferred to the judgement of the ACC.

On June 17, 2013, the ACC released a 61-page investigative report that concluded that the bidding process was conducted fairly by the IFC, and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.

The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.

Furthermore,  “Considering the situation (2008, 2009 and 2010) when the decision was made to privatise the Male’ International Airport,” the ACC’s calculations showed that MACL would make a profit of about US$254 million in 25 years if the airport was operated by the government-owned company.

In June 2013, GMR filed a claim for US$1.4 billion in compensation at a Singapore arbitration court for “wrongful termination” of the US$511 million concession agreement.

Upon his return from an official visit to India this month, President Abdulla Yameen said that the government was seeking an out of court settlement with GMR before the arbitration process begins.

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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.

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