DRP will not honour “shady deals” made over Male’ International Airport

Vice President and Spokesman for the opposition Dhivehi Rayyithunge Party (DRP) Ibrahim Shareef has said the DRP will not honour “shady deals made according to vested interests” if the party comes to power in 2013, referring to the government’s privatising of the country’s airports.

The government has shortlisted three parties to run Male’ International airport and will select one over the next 3-4 days.

The parties include Aéroports de Paris Management Company of France (ADP) and Turkish company TAV Airports Holding Company, Indian company GVK Airport Developers in partnership with Swiss Flughafen Zurich AG, and GMR-KLIA.

Shareef expressed concern that the government’s efforts to privatise state assets, such as the airport, were not occurring with parliament approval.

“Parliament is in the process of amending a public finance bill that will stipulate the government has to put these decisions before parliament,” he said.

“If the governing party will not accept this, then the new [DRP] government will not honour this type of shady deal. We will not honour shady deals – only lawful deals according to parliament.”

Shareef said the airport was currently “making the government money”, and the asking price it had set “is so low. [The deal] is riddled with corruption,” he alleged. “If the government has nothing to hide, it has nothing to lose from asking parliament.”

Minister for Civil Aviation and Chairman of the Privatisation Committee Mahmoud Razee told Minivan News that “as far as I understand we are proceeding according to the public finance act which is currently in force. Parliament legislates but actual delivery is up to the executive.”

It is the opposition’s “prerogative to say what they wish,  but the reason why experienced and reliable companies are involved in this bid is because they believe that this is a viable project.”

The Male’ airport privatisation deal would be for 25 years, extendable by another 10 years, and would require a minimum level of investment towards upgrading the airport in the first three years to meet a certain level of service.

“A certain percentage of the service charge will to go to the government, and in addition [the operator] will also prescribe a percentage of the revenue,” Razee said.

Within three years, the government would expect a new terminal on the eastern side of the airport islands, up to international standards, and the completion of aero bridges (passenger walkways), effectively doubling the annual capacity of the airport from 1.6 million passengers to 3 million passengers.

The intention was to enable fast growth of the country’s tourism market, he explained.

“It’s bound to grow – particularly the Chinese and Indian markets,” Razee said. “We’ve already received applications from Air Asia and several Chinese carriers.”

Meanwhile, the government yesterday signed an agreement with Dubai-based company Supreme Fuel Trading to manage Gan airport for 30 years, in an agreement intended to hasten development of the southern region of the Maldives by allowing 747 class aircraft to land.

“At the moment the largest aircraft that can land [in Gan] is the 767 and the Dash 100-200,” Razee said.

The government has also received a proposal from GMR to upgrade Hanimadhoo airport and increase tourist traffic to the northern atolls.

For a country dependent on international tourist arrivals, the airports are the ventricles of the Maldives economy. Addressing concerns that privatising them would loosen the government’s control over these critical assets, Razee observed that all the interested parties being considered “have experience running many international airports”.

“Security will continue to be overseen by the Maldives National Defence Force (MNDF), and the airport will be certified by civil aviation authorities irrespective of who is running the airport,” he explained.

Tourism in the Maldives is showing signs of steady growth, with an increase of 20 percent in the first five months of 2010 compared to last year.

Arrivals for first five months of this year were seven percent higher than for the same period during the boom year of 2008.

Meanwhile, the 91 resorts in country had a steady occupancy rate of 82.3 percent.