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MACL denies board involvement in letters to TMA in controversial seaplane deal

Fathmath Shaahunaz
18 February 2020, MVT 09:16
MACL's lawyer Mazlaan speaks at the parliamentary Public Accounts Committee meeting on February 17, 2020, regarding MACL's controversial seaplane terminal deal with TMA. PHOTO: AHMED AUZAM / MIHAARU
Fathmath Shaahunaz
18 February 2020, MVT 09:16

Maldives Airports Company Ltd (MACL) on Monday denied the invovment of their board of directors in letters exchanged between the company and Trans Maldivian Airways (TMA) in the controversial seaplane terminal deal.

Letters sent from MACL to TMA, recently brought to light by local media Mihaaru, reportedly revealed that the former's Board of Directors agreed to lease 31,000 square meters from the new seaplane terminal, developed by MACL at Velana International Airport (VIA), to TMA well below the market rate, at a rate of USD 10.35 per square meter for a period of 15 years.

However, during the parliamentary Public Finance Committee on Monday afternoon, the company for the first time denied their board's involvement—nor knowledge—in the decisions stated in the aforementioned letters.

Speaking at the meeting, MACL's board member Dr Ibrahim Mahfooz, a member of the company's previous board who had served as the Managing Director when MACL took over the reins of the main airport from GMR Group of India, further asserted that although the board greenlighted discussions with TMA regarding the deal, it did not authorize any decision about handing over the seaplane terminal to TMA nor the specifics of the lease period nor the plot size.

"We haven't discussed this matter to the point of making an offer", said Dr Mahfooz, maintaining that the decisions stated in the letters were not finalised by MACL's board. He further added that such a decision had not been documented in board meeting minutes, declaring that their general manager, the signee in these letters, acted on his own volition, unbeknown to the board.

Currently, it remains unclear why the letters from MACL to TMA were signed by the general manager, Hussain Fazeel.

Fazeel remains employed with the company, with no action taken against him for overriding the board.

Meanwhile, seaplane operator TMA maintains that MACL's letters entailed a "commitment" to hand over a large plot from the terminal to the seaplane operator at the agreed rate of USD 10.35 per square meter for a duration of 15 years.

Responding to committee members' inquiries about the possibility of a loss to the state resulting from an arbitration scenario, MACL's lawyer, Mazlaan Rasheed stated that he did not believe that the exchange of letters necessitated a contract, or that the exchanged letters in this case constituted to a binding contract.

The Anti-Corruption Commission (ACC) intervened on Thursday, launching a criminal investigation, alleging corruption and a loss of over USD 55 million to the state as a result of the controversial deal.

A number of industry veterans also raised concerns over the issue as well, with competitor operator, Manta Air, recently intervening in the deal, expressing that TMA was seeking to monopolise the seaplane aviation sector.

Adding to the chorus of debate surrounding the controversial deal, former president and incumbent Speaker of Parliament Mohamed Nasheed urged the government and TMA to come to agreeable terms last week, highlighting the urgent need to speed up the opening of the second runway as per airport expansion plans.

The same concerns were also echoed by Auditor General Hassan Ziyath, who warned that the delays would cost MACL a monthly loss of over USD 9 million.

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