USD21.4 million in revenue as airport development fee

Velana International Airport (VIA) received USD 21.4 million in revenue as Airport Development Fee (ADF) last year.

The revenue from ADF are deposited in the Sovereign Development Fund established by the government to pay back loans acquired for various development projects of VIA.

ADF of USD 12 from locals and USD 25 from foreigners are charged from passengers that depart from the airport.

The bill to impose ADF at VIA was passed on December 24, 2016 and was ratified on December 7, 2016 by President Abdulla Yameen. It was to be brought into effect within four months of implementation. The original deadline was April 1, 2016, but it was delayed until May 1, 2016.

The original proposal of the bill, with USD 25 to be charged from all passengers, projected an ADF revenue of MVR 575 million. The amendment to the bill changing ADF to USD 12 for local passengers reduced the estimated revenue to MVR 329.9 million.

While the revenue from ADF was at USD 21.4 million, Airport Service Charge (ASC) generated a revenue of USD 45.8 million (MVR 703.2 million) in 2017. This is a 4.6 percent increase compared to 2016.

VIA’s previous operator, GMR Group of India, had also tried to impose the same tax of USD 25, which had been promptly halted by the Civil Court. The proposed charge had sparked much controversy among the public with the majority opposing its implementation, as airport development had not been completed at the time it was proposed. While construction of the new runway commenced projected to be completed by next year, the work on the new terminal building awarded to Saudi Binladen group is yet to start.

Funded with a loan of USD 400 million from China’s Exim Bank, VIA’s new runway is developed by Beijing Urban Construction Group (BUCG). The new runway measures 3,400 metres in length and 60 metres in width. Under the airport development and expansion project, a cargo terminal with a capacity of 120,000 tonnes and a fuel farm with a capacity of 45 million litres will also be established.

The estimated budget for the new terminal building, which would cater to over seven million passenger, is USD 350 million.

Maldives Airports Company Limited (MACL) announced that the new terminal would be located north of the existing International terminal. Under the airport development master plan, once the new terminal is completed, the old one would be converted to part of the domestic terminal.