Fayyaz blames Yameen on airport debt issue

Former Economic Minister and current Chairperson of opposition Maldivian Democratic Party (MDP) Fayyaz Ismail has today laid the blame for a large part of the country's foreign debt on former President Abdulla Yameen.

Fayyaz said that a large part of Maldives' foreign debt is the loan taken for the development of the new terminal at Velana International Airport during former President Yameen's administration.

In a post on X, Fayyaz stated that the airport development had been handed to GMR, with no costs incurred by the government, when, for political reasons, Yameen had decided to instead 'take loan upon loan' and develop the new terminal. Further, to do this, Yameen had voided the agreement with GMR in a manner that caused further loss to the State, Fayyaz said.

Operation of Velana International Airport had been granted to GMR on June 28, 2010, during the administration of former President Mohamed Nasheed. This is cited as a decision that heavily contributed to the fall of Nasheed's government on Feb 7, 2012.

The agreement with GMR was cancelled in 2012, when former President Mohamed Waheed had been in office. As a result of this, Yameen's administration had to pay USD 271 million (MVR 4.1 billion) in compensation to GMR on November 15, 2016.

Nasheed posted on X from his personal account 'anedhivehirajje' that fifteen years had been lost in the development of VIA. Nasheed may have been referring to the period airport operations were given over to GMR.

In Fayyaz's post, he said that a large percent of Maldives' foreign debt is the loans taken during Yameen's administration for the development of the airport.

"This is the most poorly conceived decision ever made by a Maldivian leader. As a result, Maldivian citizens have lost opportunities to secure funding for other essential needs," Fayyaz said.

Fayyaz asserted that had the Yameen administration not taken loans for airport development in 2014, tourist arrivals could have reached 4 million and the nation's GDP would have doubled.

"This politically motivated decision taken by a leader has led to a loss of USD 60 billion to the economy," Fayyaz said.

"The responsibility for this loss must be borne by the person who made himself out to be a great economist and caused this loss to the country. This is the economic ideology of 'frontonomics'," Fayyaz said, referring to Yameen's current political party People's National Front.

Fayyaz also questioned why the launch of the new terminal is being hailed as a major achievement, given that the project resulted in economic and state losses amounting to hundreds of billions.

He also criticized the government for spending millions on the new terminal's inauguration despite the project still being incomplete.

The State will need to pay back over MVR 15 billion in debt next year.

While Fayyaz has stated this, 50 percent of the debt that needs to be repaid next year is the sukuk of USD 500 million (MVR 7.7 billion) that was sold when he was serving as Economic Minister during former President Ibrahim Mohamed Solih's administration. Half of the sukuk had been spent on the 'Sunny Side' bond taken by former President Yameen's administration in 2017. The remaining was used in 2021 by President Solih's administration to respond to the revenue losses caused by the Covid 19 pandemic.

The other bond amount requiring repayment next year is a USD 100 million (MVR 1.5 billion) bond sold in 2018 by President Yameen's administration. The bond was utilized to cover the budget expenses for that year.

Under Solih's administration, USD 743 million (MVR 11.5 billion) was taken for 18 loans in 2020. Some of the largest projects conducted under these loans then were the Thilamale' Bridge, 4000 flats in Hulhumale' and Thilafushi port. At the end of Solih's administration, foreign debt stood at MVR 50 billion.

At the end of Yameen's administration, foreign debt was at MVR 39.6 billion. Of this, the largest expenditure was on reclamation of Hulhumale' Phase 2, development of Hiyaa Flats, development of Dharumavantha Hospital and development of the new terminal at Velana International Airport.

The government is now gearing up to inaugurate the new terminal at Velana International Airport on July 26, marking 60 years of Maldives' independence.

After this administration came into office, USD 100 million (MVR 1.5 billion) from the Saudi Fund for Development and USD 80 million (MVR 1.2 billion) from the Abu Dhabi Fund for Development were taken for the airport new terminal project.

With this, the total project cost is at approximately USD 600 million (MVR 9.2 billion).