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A terminal, two runways and some resorts

Source : BUSINESS_STANDARD
Last Updated: Mon, Dec 10, 2012 03:55 hrs

pIn the 1960s Maldives was not the tourist hotspot it is today Fishing was the main occupation Every week a Ceylonese as Sri Lankans were then termed carrier operated a flight to and from Colombo with dried fish export from the islands One day old timers said Sri Lanka stopped this service citing poor landing conditions in the aerodrome a British-era relic with a runway of steel platesppThe move hurt President Ibrahim Nasir and the Maldivians deeply and they took it as a challenge &ldquoIt is legendary&rdquo says Moosa Latheef editor of Haveeru the most circulated newspaper in the archipelago&rsquos capital here &ldquoThe president called the people to come together to build the airport People not only contributed money from whatever little they earned they took boulders from the sea with bare hands They brought sand on dhonis boats&rdquohe adds describing the birth of the airport on Hulhule island a 10-minute ferry ride from hereppMany Maldivians opposed to the agreement with GMR assert this history and emotional attachment are not the primary reasons they oppose the deal &ldquoThe agreement had many flaws&rdquo said Abdullah Humaid a leader of the Adhaalat Party perceived to be a radical right-wing party Adhaalat&rsquos chief Sheikh Imran has been spearheading the &ldquoGo home GMR&rdquo campaign in the neatly-laid and narrow magus roads of MaleppSpeaking to Business Standard hours after the Maldives Airport Company MACL officially took over the operations of the airport Humaid said &ldquoThe bidding process was questionable We had knowledge that GMR was not initially qualified but was later included Any business deal has to be profitable to both parties In this agreement Maldives was at the losing end The airport is our biggest asset No Maldivian could imagine a situation where we have to pay foreign companies to run our airport&rdquoppApart from the now much-repeated skewed financial terms of the GMR agreement the development model of Hulhule itself was contentious say officialsThe original master plan for airport development had proposed a second runway on the western end of the island However under the revised plan for which an agreement was signed with GMR this plan was dropped and the proposed new terminal was to come in its place On the eastern end of the island where the present terminal stands GMR proposed to build a business centre-cum-shopping and entertainment areappThis was a double whammy for the locals say Maldivians Development at the eastern side of Hulhule on the scale planned by GMR would wean away shoppers and tourists from Male while the second runway plan which would have enabled more tourist traffic and economic growth was shelvedppTourism Minister Ahmed Adheeb says the GMR plan did not take into account several local realities &ldquoThe Dubai or Changi model would not work here People don&rsquot come here to shop They come to Maldives to relax They want to land as early as possible and check out as late as possible&rdquoppAdheeb said this kind of traffic called for more efficient services rather than huge infrastructure such as the proposed new terminal Adheeb says the new management will focus on improving passenger services in the airportpp&ldquoWe don&rsquot need a Taj Mahal&rdquo said Mohammed Ibrahim managing director and chief executive officer MACL &ldquoOur traffic is a million passengers a year Why do we need capacity for five million now We will develop gradually as and when the need arises That is how we have come this farpp&ldquoWe have run it for 40 years We can run it now&rdquoppIbrahim Faisal chief of the Maldivian civil aviation authority the regulator said he did not foresee any operational issues due to the transition &ldquoAll the staff were with MACL before Only the management has changed Nothing changes operationally&rdquoppFaisal however said the second airstrip should be an immediate priority &ldquoAt present there is no provision for any emergency&rdquoppA concern that has arisen over recent days is how the government would manage to fund the airstrip&rsquos development especially when the damages that GMR may claim for the termination loom large On if the government had enough funds to meet the damages that some estimates put up to 700 million for this termination Uza Aishath Azima Shakooru attorney general of Maldives shot back &ldquoWho is floating these numbers We have filed for arbitration Normally these proceedings can take two to three years Who knows at the end of it GMR might have to pay damages to us&rdquo She shut off further queries saying she would &ldquoreserve her legal arguments for the actual proceedings&rdquoppHumaid of the Adhaalat Party says these exorbitant numbers are floated by ex-president Mohammed Nasheed &ldquoWhatever development has happened so far is only cosmetic We are hopeful that it compensation would not be the big number Nasheed has been floating&rdquoppAmir Ali a GMR official here said the company invested up to 11 million in the interim arrangements made at the airport This is in addition to the 78 mn upfront fee paid to the government &ldquoFurther we have also reclaimed land on the western sidewhere the new terminal was proposed to come up Considerable dredging and reclamation has been done and the foundation has been laid&rdquo he saidppMost Maldivians who have followed the events over two years say the deal was doomed from Day One Latheef recalls how at the ceremony of the inking of the original agreement between GMR and the Maldives government lawyers and officials from both sides were still reading and trying to understand the papers &ldquoThere was hardly anything ceremonial People were tense Many of them simply had not had enough time to go through the document and appreciate the various issues It was all done in great hurry&rdquoppThe holes in the agreement were soon exposed as the provision to levy an Airport Development Charge was stuck down by a civil court in January 2012 G M Rao who was in Male for the ground-breaking ceremony for the new terminal told local media &ldquoThe government should settle the ADC problem&rdquoppCiting a Cabinet investigation report Lateef described the controversial sequence of events On January 5 2012 GMR asked MACL to allow it to deduct the loss on account of non-levy of ADC from the revenue share payable by GMR The same day MACL sent a letter to the finance minister asking if the GMR request should be heeded The finance ministry sent a letter to the then attorney general for opinion The AG gave an opinion that the civil court verdict appeared &ldquopolitically motivated&rdquoppThis Latheef says gave a window of opportunity for the government as the GMR agreement had a clause that the government would compensate GMR for losses caused due to &ldquopolitical disturbances&rdquo The report also described how the same lawyer drafted both the application by the company and the finance minister&rsquos letter sanctioning the requestppNasheed who had to step down soon after was unreachable A spokesperson of Nasheed&rsquos MDP party did not respond to email queriesppNasheed supporters say there are big resort business interests behind all these patriotic calls to save the airport and other economic reasoning Shafiq a 30-something professional said at least two local businessman have stakes in a smaller airport and they see the development of a mega airport as a threat to their own prospectsppInterestingly even as the GMR issue was simmering the government extended the lease of Villa Shipping and Trading Company over Mamigili Airport for 99 years The company is owned by the president of the Jumhoory Party Gasim Ibrahim He is said to own a number of resorts in and around Mamigili and operates sea plane services under the name Trans Maldives Aviation TMAppGasim&rsquos partner in TMA and Maldives&rsquo leading tour operator &lsquoChampa&rsquo Afeef is also said to have bought a 30 per cent stake in Addu International Airport through his Kasa Holdings Locals says Vaddu atoll province which is near this airport has numerous islands with great tourism potential once the airport gets fully developed Proximity to the airport has a multiplier effect as tourists find speed boats and other transport modes too expensive A 45-minute speed-boat ride can set one back a whopping 100 double for return Most resorts charge for transport from the airport separatelyppIn a country where tourism is everything owning and operating airports and airline services seem to be logical forward integration for tour operatorsppGMR was eyeing a pie of the tourism sector by proposing to develop the eastern shore of Hulhule Now local players who will soon have &ldquoexperience&rdquo in developing airports can be roped in for development of Male airport itselfppThe game is larger than technical irregularities and corruption said Shafiq He also doesn&rsquot have kind words for the radicals &ldquoThey get their ideas from Pakistan where they spend some 10-15 years So they are pouncing on India They do not have any business interests But they seem to have a lot of money I wonder where they get it from&rdquoppEven the Maldivians who are happy to see the back of GMR are not keen to antagonise India &ldquoWe are dependent on India for medical facilities lifesaving drugs and even everyday items such as vegetables and rice Similarly other investments in Maldives such as that of the Tatas are safe and thriving&rdquo Latheef saidpp&ldquoThe airport issue was a one-off and should not be made a reference point for our multi-faceted relationship&rdquoppBy yesterday morning the office was pretty much deserted except for a few Telugu voices Blue T-shirts carrying the MACL logo have already replaced white GMR ones on the airport premises &ldquoYour journey our business&rdquo the slogan on the T-shirt saysp


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