Infrastructure major GMR’s foray into the Maldives to manage the premier airport there is facing unexpected hurdles. Opposition is mounting over some contentious parts of the deal with the island nation’s government.
Trouble began last week when a local website leaked the agreement between the Ministry of Finance and Treasury, the Maldives Airports Company Ltd and the consortium of GMR and Malaysia Airports Holdings Berhad.
In one of the provisions in the deal, the Maldives government committed there would be no more than three international airports — Male, Gan and Hanimaadhoo — in the island.
Those opposing the privatisation say the provision will help GMR and other private airport developers, assuring them of steady revenues and profits. The Maldives has four airports now.
In an email response to Business Standard, a GMR Infrastructure spokesperson agreed such a provision existed in the deal. “Male is a running profit-making airport, with traffic of about 2.7 million passengers and revenue of around $140 million a year,” he said.
The deal with GMR is already an issue in the Maldives, with the Opposition — Dhivehi Rayyithunge Party, Dhivehi Qaumee Party, People’s Alliance and Jumhooree Party — jointly filing a lawsuit early last month in a civil court against GMR’s plan to levy an airport development fee from passengers.
The suit has challenged the imposition of such a fee without the enactment of a taxation law. The Maldives’ Parliament is yet to approve the law. Though the court dismissed the suit on the ground that the case did not state whether the government violated any right stipulated by the Constitution, the Opposition planned to appeal against the decision in a higher court, local news reports said.
GMR would charge $25 as airport development fee from January 1, 2012, said reports, quoting the leaked agreement.
In June, after floating an international tender, the Maldives government leased Male International Airport to GMR for 25 years. GMR and its consortium partner Malaysia Airports Holdings Berhad have formed a joint venture company — GMR Male International Airport Private Ltd — to manage the facility and will invest $400 million for its modernisation and expansion. GMR said the company was trying an early takeover of the airport. Two days ago, the partners paid $78 million upfront to take over the airport and submitted a master development plan to the National Planning Council. It has to submit a final master plan before April next year.
GMR, which manages the Delhi airport, was pulled up recently by the Airport Economic Regulatory Authority for levying special fees on cargo agents and airlines without its approval.
