GMR offers to exempt Maldivians from ADC

GMR has said today that they have agreed to exempt Maldivians from Airport Development Charge (ADC) of $25, and proposed this to the government.

In a Press Information Note released by GMR, they responded to reports in the media alleging them of deducting the ADC and insurance surcharge from the concession fee paid to the Maldivian government, and proposed two options to the Maldivian government. One proposition is that no Maldivian passport holder will have to pay ADC, and every departing foreign passenger will pay an ADC of $28; the other is that Maldivians travelling to SAARC countries will not have to pay any ADC, and every Maldivian Passport holder departing to countries other than SAARC and every foreign passenger will pay an ADC of $27.

“This is because the majority of Maldivians travel abroad for the purposes for healthcare and education. GMR Male International Airport Pvt. Ltd (GMIAL) has therefore offered the following options to Government of Maldives (GoM) to accommodate this desire and is awaiting a response from GoM.”

The statement also said that ADC is charged in accordance with the agreement, and the decision to charge ADC was made following the International Financial Corporation’s advice to the government. Also, the agreement indicates that ADC should commence in 2012 – thus in the event that ADC is not charged, GMR should be compensated by the government.

Civil Court ruled last year that GMR cannot charge $25 as ADC. For the first quarter of 2012, GMR paid $525,355 to Maldives Airports Company Limited (MACL), instead of $8.7m. MACL has however said that the agreement with the former government to deduct the ADC from the money owed to the government has been cancelled. Discussions have commenced between GMR and the government to resolve certain issues.

President Dr Mohamed Waheed Hassan Manik has indicated in a recent interview with the media that the issue of ADC will be submitted to Parliament when the Parliament reopens for a decision.

GMR’s statement also says, “The revenue to GoM in 2010 was USD 78 million (Rf 1.0 billion) being the upfront fee, and was USD 33 million (Rf 500 million) in 2011. It may be noted that this amount in 2011 itself was three times the money that GoM ever made in a year before privatization. Post construction of the new terminal in 2015, this amount is expected to be over USD 50 million (Rf 750 million) every year and will go up to almost USD 100 million (Rf – 1.5 billion) per year beyond 2021.”

For GMR, Male’ airport is the most profitable, with revenue for the first quarter of this year being $49.1m and profit after tax being $4.6m.