Why Maldives took over Male Airport from GMR

Moneycontrol Bureau

GMR-Male Airport tussle has come to a close with the Maldives government taking over the airport last week. While GMR and Indian industry bodies have termed the termination of a 25-year contract as unlawful, a report in Business Standard explains the other side of the story.

Here are key takeaways of the report

*The report quoting  tourism minister Ahmed Adheed states that while constructing the airport, GMR did not take into account several local realities.

*It should have focused more on passenger services rather than building huge infrastructure to cater to five million passengers, while currently the airport caters to only one million passengers.

*The bidding process was questionable. The project was not profitable to both parties. Despite being the biggest asset to the government, only GMR would make money out of it by way of non-aero revenues.

*Forty years ago, when the airport was constructed, every Maldivian contributed to its making. Citizens not only contributed money from whatever little they earned, they took boulders from the seas with bare hands. No Maldivian could imagine a situation where they have to pay foreign companies to run their own airport

.*GMR proposing to build a shopping centre-cum-shopping and entertainment area meant a double whammy for locals because this move would definitely enable more tourist traffic but economic growth would definitely be shelved.

*The levy of airport development charges as mentioned in the agreement was always a contentious issue since passengers were already paying USD 18 toward airport charges. The flaws in the agreement surfaced when GMR announced that it will charge ADC from 2012.

*Key citizens who have been following the issue say that clauses of original agreement between GMR and the Maldives government is still unclear; lawyers and officials were still trying to understand the minute details with clarity. 

 

*"There was hardly anything ceremonial about signing of the agreement.  People were tense. Many of them simply had not had enough time to go through the document and appreciate various issues. It was all done in great hurry,"  the report states further.