Additional reporting by Hassan Mohamed
The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.
At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.
“The previous development concept was only for the development of the terminal,” says Saeed.
“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”
After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.
“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.
Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.
The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.
The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.
Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.
In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.
The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.
The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.
Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.
Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.
Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.
In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.
A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).
The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.
However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.
The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.
Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.
However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.
“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.
“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”
However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.
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