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MP Yauqoob claims 'seaplane terminal deal' moving fast in TMA's favour

Rae Munavvar
16 January 2020, MVT 15:42
MACL VELANA INTERNATIONAL AIRPORT TOUR
Rae Munavvar
16 January 2020, MVT 15:42

MDP’s Parliamentary Representative for the Dhaandhoo constituency (Gaafu Alif Atoll) Yauqoob Abdulla on Wednesday, made a statement on Twitter, declaring he had received information alleging the move to handover of the seaplane terminal from Maldives Airports Company Limited (MACL) to TransMaldivian Airways (TMA) is close at hand.

In the months leading up to the tweet, MP Yauqoob has carved his place as one of the leading voices against handing over the terminal to TMA, citing that the decision would not only whittle market competition, but place other local seaplane operators at a distinct disadvantage.

MP Yauqoob further declared that should the terminal handover proceed at a disadvantage to the state, he “would not hesitate” to hold those responsible “accountable for their decision”. 

His tweet concluded pledging that, “the [Parliament's] Budget Committee will look into and investigate the matter”.

Translation: Received information that MACL's Seaplane Terminal would be handed over to TMA very soon. I will not hesitate to hold those responsible accountable for their decision, should it be handed over in a way that puts the state at a disadvantage. The [Parliament's] Budget Committee will look into and investigate the matter. [Tags Anti Corruption Commission and Mihaaru News]. IMAGE: TWITTER

On December 30, 2019, Minister of Economic and Trade Fayyaz Ismail tweeted in reference to the infamous dissolution of the agreement made with GMR Group to develop Velana International Airport, stating that the decision was made because of MACL's capability to manage and run the airport by itself. The minister went on to state that hence, there is "no doubt" that the company could manage a "very small seaplane terminal" as well, adding that set agreements would be honoured.

Responding to a critical reply made to his tweet, which called him out for downplaying terminal-related responsibilities, Fayyaz further affirmed his initial sentiment. IMAGE: TWITTER

Local media Mihaaru News reported on Thursday that further sources within the administration have also confirmed that the contested decision is now set to proceed.

The tip-off follows an ensuing debate on the state’s decision, with concerns being raised from various parties, including criticisms that were shared by members within ruling Maldives Democratic Party (MDP), numerous issues highlighted in the Auditor General’s special report and elevated public discourse across social platforms.

However, thus far MACL has not responded to the MP Yauqoob's information. Although in effect, the decision would lead to granting a single company major competitive advantage over a terminal built at great cost to MACL, the company has repeatedly declined to comment on the case.

On August 2019, after MP Yaugoob first raised alarm over MACL handing exclusive operation rights of the new seaplane terminal to TMA, under the directive of Parliament Public Finance committee Auditor General Hassan Ziyaath was tasked with conducting a special audit of the deal. 

According to Mihaaru News, the special audit report, which is yet to be publicly disclosed, reveals that Maldives Airports Company Limited (MACL) would forgo a yearly profit of over $41 million (MVR 632 million) if the state were to hand over management of the new seaplane terminal to TMA. 

The main focus of the report revolves around TMA’s acquisition of plots below market rate and subsequent profiting off leasing them to other businesses at inflated prices, drawing attention to discussions and draft agreements exchanged between the company and Velana International Airport.

Mihaaru News stated that, information received during the audit process revealed that if MACL were to proceed with the contested decision to handover the management of the new terminal to TMA, the former would be limited to generating an annual revenue of only $5.6 million (MVR 86 million). Should MACL operate the terminal itself and lease the plots at the existing market rates set for offices and lounges leased at the international terminal, the airports' company is likely to record an income of $47 million (MVR 729 million) per year. 

The report then concludes that MACL would bear a loss of $41.6 million (MVR 641 million) if they proceed with the contested handover of the seaplane terminal operations to TMA.

Lounges at the seaplane terminal generate a large portion of revenue for operators. Sources have confirmed to Mihaaru News that TMA has already begun leasing negotiations with resorts.

The audit report stated that discussions to hand over the seaplane terminal operations commenced in 2017, under the administration of former President Abdulla Yaameen Abdul Gayoom. 
 Per the report, the new 28,000 square meters, 4-story seaplane terminal will cost MACL $55 million. The new facility will be ready for operations by July 2020, according to BUJC - the Chinese firm contracted for the construction. However, MACL has announced that the terminal will start operations in May of next year.

In response to media criticisms around the decision, MACL later made a statement declaring that from the following May onwards, the new seaplane terminal would be managed as present with individual operators handling their respective terminals, adding that MACL would take over management of the entire terminal after a period of three years.

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