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.”

“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 stated.

“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 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.”

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Fishermen’s Union says ‘No’ to private ownership

The Fishermen’s Union has rejected Male’ City Council’s proposal to privatise the fish market on the grounds that the change would eliminate competition and complicate boat routines.

“We have to keep our system,” said union chairman Ibrahim Umar. “Privatising will make the operation too big.”

Umar said that 50 vessels currently come to Male’ each day to deliver fish, and that space is tight. Under the proposed plan, said Umar, fishermen would have fewer responsibilities in Male’s fish market but would be expected to make more frequent trips in and out of Male’s harbor.

“There isn’t room for that kind of traffic in the harbor. And there isn’t storage capacity for the extra fish that would be coming in,” said Umar.

According to Umar, the fish market currently enjoys a healthy level of competition.

“Every day the fishing is good, there is enough money, and there is even demand from other atolls for fish from Male’. Privatising the fish market will kill the competition because fishermen will have to sell at the same private rate. Bringing in more fish will also keep the price down, and there’s nowhere to keep it on Male’. We need to run this through the union,” he said.

Male’ Mayor ‘Maizan’ Ali ‘Alibe’ Manik said the plan to privatise is an effort to comply with World Health Organisation (WHO) standards, Haveeru reports.

“When we hand over the fish market for management, the fishermen will just have to bring the fish to the market and hand it over to those in charge of management. That way it saves the fishermen time, allowing them to set off fishing faster,” he said.

For Umar, the advantages were unclear.

“How will fishermen get paid? It will take longer if they aren’t selling the fish themselves,” he observed.

Addressing the issue of facilities, however, Umar said that an earlier proposal to build a fish harbour in Hulhumale’ was being revisited by the Ministry of Fisheries and Agriculture, the Ministry of Transport and Hulhumale’ Development Corporation (HDC).

In 2009, plans to build a fish harbour on Hulhumale’ were sent to the National Planning Council. The harbour was intended to expand and expedite the fishing industry, and reduce the pressure on Male’s market.

When the National Planning Council rejected the plan, however, Umar said there was a breakdown in communication and trust. “They weren’t talking to us, I found out through the Fisheries Minister that they had rejected the plan. There was no communication with [the union] about the plan or the finances.”

Umar said the union was told there was a lack of funds, but claimed that the International Fund for Agricultural Development (IFAD) had set aside money for the harbour. “I don’t know what happened with that money, we never got an explanation.”

In 2006, IFAD approved a post-tsunami recovery program in agriculture and fisheries. IFAD currently classifies the program as ‘ongoing’.

Minister of Fisheries and Agriculture, Ibrahim Didi, said the earlier financial problems have been resolved and the ministry is currently working with HDC to construct a fish harbour.

Didi said expanding work space is integral to privatising the fish market, which is growing.

“There’s already plenty of demand for the fish,” said Didi. “Privatising it would bring significant benefits to fishermen. They will have more access to the harbors, necessities such as ice will arrive on time, and things will happen more quickly.”

Didi said development of Hulhumale’s fish harbour has priority, and plans for other fish harbours will be considered accordingly.

According to Didi, President Mohamed Nasheed’s plan will distribute fishing components such as ice, oil and parts to different interested parties. Didi said the approach would improve facilities.

“If the different components of the fishing industry are spread out among interested parties working with a commercial interest, then business will move very fast because there will be a real business interest.”

The City Council earlier told Haveeru that the goal of privatising the market was to improve selling procedures, not to increase profits. Representatives said the union’s response would affect planning.

Council representatives and officials familiar with the proposal had not responded to inquiries at time of press.

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Fuel sellers cheating customers, says Fuel Association

“Almost every” fuel seller in the Maldives is taking advantage of lax certification to cheat their customers by using inaccurate meters, the President of the Fuel Association of the Maldives has claimed.

Mohamed Rasheed accused the trade ministry of failing to certify petrol station meters and allowing the industry to take advantage of consumers for more than 30 years.

The trade ministry retaliated by saying it was impossible for them to check every fuel meter in the Maldives, and blamed the fuel suppliers for failing to inform the trade ministry the meters were uncertified.

Rasheed criticised the trade ministry for being “irresponsible”, claiming that the problem was a big drain on money for both consumers and the Maldivian government.

Chairman of Fisherman Union Ibrahim Umar said the organisations had received many complaint from fishermen that the fuel sellers are “cheating” them by showing them inaccurate measurements from uncertified meters.

Umar claimed that sometimes the fuel sellers “take half a barrel by showing the consumers the wrong meter.”

At a press confernce today, Rasheed called on the trade ministry to approve a law that every fuel station in the Maldives must be certified by the ministry.

Director of the Trade Ministry Solih Hussein said “if the fuel sellers inform us today [they have an uncertified meter] we will put on the seal by tomorrow morning.”

Furthermore, Solih accused the Fuel Association Of Maldives of contradicting its own rules and regulations by exposing its own members to accusations of impropriety by their consumers.

“The Fishermens’ Union can now file a lawsuit against the Fuel Association of Maldives, as they have been selling fuel without certifying their meters, while many of consumers remain unaware of this certification,’ Solih said.

He calls on every consumer in the Maldives not to buy anything measured using a uncertified meter “whether it’s fuel, rice or vegetables.”

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