Page added on March 27, 2012
Minister of Transport and Communication, Dr Ahmed Shamheed, has criticised GMR’s plan to develop Ibrahim Nasir International Airport (INIA), arguing that it does not provide needed redevelopment of the runway.
Shamheed said there had been a temporary closure of the airport last week as a large crack on the runway was repaired.
“The development of the runway is not part of the agreement made with GMR. And the way the airport development plan is going, there is no possibility of constructing a new runway. A beautiful design can be made, but we have to consider its sustainability,” the Minister told Sun Online.
When asked to comment, Shamheed told Minivan News that he could not say anything more specific on his department’s next move regarding the repair issues.
“But we are conducting a study into the matter. Once we establish all the facts, we will brief,” said Shamheed.
“We are trying to find out how they are going to address the issue with the runway. There is no quick fix,” he claimed.
At over US$400 million the project is the largest single foreign investment ever made in the Maldives. The plan involves an upgrade the current terminal before the construction of a new terminal on the opposite side of the island of Hulhule, which the developer has pledged to complete in 2014. Ground was broken on the site for the new terminal in December last year.
The new transport minister alleged the runway was in poor condition and in need of critical repairs. An incident in 2010 saw experts from Boeing brought in to advise on such repairs after one of its aircraft sustained damage as a result of water retention on the runway.
Managing Director of the Maldives Airports Company Limited (MACL) Mohamed Ibrahim, previously responsible for the maintenance of the site, two years ago claimed that the runway had to be re-tarred every 15 years, having last been repaired in the early 1990s.
The political opposition under Nasheed’s government, particularly the Dhivehi Qaumee Party (DQP), were persistently critical of the airport development, with allegations ranging from corruption in the bidding process to claims that the deal would allow the airport to refuel Israeli bombers enroute to bombing Arab countries.
Then leader of the People’s Alliance (PA) and brother of former President Gayoom, Abdulla Yameen, previously described the deal as “economic enslavement.”
Similarly, the Dhivehi Quamee Party (DQP) released a booklet in Dhivehi in December 2011 titled “Giving the airport to GMR: The beginning of slavery”, warning against “devious Indians”.
In the 24 page document (download in English/Dhivehi) the DQP claimed that the agreement did not include any requirement to develop a runway and would allow the GMR group to “colonise” large portions of the economy.
“Indian people are especially devious people”, the DQP booklet claimed. ”There is no guarantee at all that GMR will invest the proposed amount. There is nothing the government can do but accept what they say and the documents they provide. This is how all the companies in partnership with the government are run.”
An unattributed letter on the party’s website published at the same time as the pamphlet claimed that the Indian government, in its backing GMR’s investment, “has a choice to make.”
“Does it want its backyard to be peaceful, prosperous, and free from corruption, nationalism, and religious problems? Does it want its backyard to be a place where wealthy Indians can spend their holiday and where its investors are respected and welcomed and not hated? Or does it want to be seen as a backer and sponsor of a corrupt and despotic regime, divorced from public sentiments, as was the case of the United States in the Middle East?”
Spokesperson for former President Nasheed, Mohamed Zuhair, claimed at the time of the contract signing in 2010 that the deal with GMR to upgrade and manage the airport had clashed with the vested interests of several tycoons, including Yameen and Gasim, drawing it into the political arena.
“Gasim was concerned the new airport might take the charter flights he had intended would be landing at the new airport he is building in Maamagilli,” Zuhair alleged at the time, “while Yameen is a third party supplier of fuel at Male International Airport through the Maldives National Oil Company, which has representation in Singapore.”
“These MPs are two individuals of high net worth – tycoons with vested interests,” he explained. “In pursuing their business interests they became enormously rich during the previous regime, and now they are trying to use their ill-gotten gains to bribe members in the Majlis and judiciary to keep themselves in power and above the fray.”
The airport’s CEO Andrew Harrison in 2011 stated in an interview with Minivan News that he was “extremely confident of standing up to any scrutiny because of the way the bid was scrutinised by the World Bank’s International Finance Corporation (IFC)”.
Harrison today declined to comment on Shamheed’s recent statement. In a previous interview, he maintained that GMR had “always been politically neutral in that our remit is solely about developing and operating the airport.”
“We respect whichever party holds the seat of government in the Maldives. The government change is a change we respect and we remain politically neutral. We’ve got a concession agreement and we are sure that any government in power will respect that agreement. We’ve not heard anything that would make us believe otherwise,” Harrison told Minivan News at a press conference in February.
The criticism culminated in a successful court case filed by the DQP against GMR’s levying of an airport development charge (ADC), a source of revenue for the company outlined in the original contract. The court decision left the Nasheed government with the obligation to pay the difference.
Several days after assuming the presidency, Dr Waheed vowed the government would not approach the deal “from a political perspective”, adding, “It is not our intention to harm GMR. Our objective will be to resolve concerns of the public [regarding the company].”
Foreign investors should not be concerned about the political upheaval affecting their interests in the Maldives, said Dr Waheed, but hinted that some investments may come under scrutiny.
“We will not target anybody for political reasons,” he said. “If there are any reasons for concern over investment, of course any steps that need to be taken will be taken.”
Since the recent transition of presidential power, many of the former government’s policies have come under scrutiny. The Ministry of Economic Development announced that all future Public Private Partnership (PPP) schemes would be put on hold, adding to fears that the political turmoil currently engulfing the country would be detrimental to foreign investment.
Former Climate Change Advisor to Nasheed Mark Lynas recently expressed his concern over this issue: “Donors will turn away because of the political instability, and investors likewise.”