MACL acquires LC of 386 million for terminal construction

Maldives Airports Company Ltd (MACL) has acquired a USD 25 million (MVR 386 million) letter of Credit (LC) through Bank of Maldives (BML) to speed up the purchase of construction materials for the new terminal.

The LC was taken from BML on July 25 with a guarantee from the government. The LC taken for one year is to be repaid and USD 350,000 (MVR 5.4 million) is required to be paid as an arrangement fee.

The terminal project is funded by loans from Kuwait Fund, Abu Dhabi Fund for Development and Saudi Fund. MACL said that there were some delays in arranging the payments and bringing in the necessary material. MACL said that an LC was acquired to purchase materials for the terminal project to facilitate the payment required for the contractor to expedite the items.

"Due to the delay in payment, we took the LC in order to make timely payments and bring in materials. This is not a loan. MACL is providing a payment guarantee to the contractor after taking LC services," said an official from MACL.

With a guarantee from the government, the company will be able to make payments immediately through BML.

BML will provide payment for the materials as they are being purchased instead of issuing the entirety of MVR 386 million.

The government handed over the construction of the new terminal to Saudi Bin Ladin Group in 2016. The state-of-the-art terminal at the largest airport in the Maldives was to be completed this year. However, the work has been delayed due to various reasons. The estimated cost of the 78,000 square meter terminal is MVR 5.5 billion.