The State Trading Organisation (STO) has been losing MVR12 million (US$ 780,000) per year since Fuvahmulah Airport opened in 2011, Managing Director Ahmed Azim told Haveeru.
“I requested the government to take over the airport because it has been causing that much damage to the company,” said Azim, noting that the state-owned company had lost in excess of MVR170 million (US$11 million) since the airport opened.
Speaking at the 50th anniversary of the STO last week, President Abdulla Yameen said that he does not believe the STO will ever earn profit from the airport.
“Even though STO had to suffer numerous losses and had to bleed because of it, it has constructed an airport at Fuvahmulah,” said President Yameen – who had previously served as Chairman of STO. “We have decided to take over the airport and re-compensate the company for its losses.”
Upon assuming the presidency in November 2013, Yameen declared the STO bankrupt before Azim announced a campaign to cut operational costs by MVR50 million (US$3,242,542) in 2014.
Last week Yameen warned that “managing directors of state owned companies will change if the companies cannot perform” to the required standard, shortly after the dismissal of Maldives Airports Company Ltd chairman Ibrahim ‘Bandhu’ Saleem.
Despite being constructed as part of the STO’s social responsibility, the airport was not economically viable, said Yameen, warning that the boardrooms of state owned companies should consider such investments more carefully in the future.
Yameen did, however, call upon the STO to widen its scope into international global markets. He spoke of diversifying the company into numerous fields such as shipping and oil tanker operation, while promising government support for such ventures.
Fuvahmulah Airport – which has a runway of 1200 km runway – was constructed and opened in 2011 by the STO during former President Mohamed Nasheed’s administration. It operates flights to Malé and Gan International Airport, to the south.
Nasheed tweeted today that the airport would yield profits if the originally envisioned tourism activity were to be developed. The single island atoll has no resorts, and only a single guest house registered with the tourism ministry.
During his presidential election campaign in 2013, Nasheed had pledged to transform the island via 70 separate development projects, as well as awarding it city status.
With 8,579 people, according to the 2014 census, Fuvahmulah has the fourth largest population of any island in the Maldives.
Related to this story
President Yameen urges STO to enter international markets
Nazim dismissed as defence minister, replaced by Moosa Ali Jaleel
State Trading Organisation bankrupt: President Yameen
(0)Dislikes
(0)