Government receives zero income; required to pay $1.5 million to GMR

Maldives Airports Company Limited (MACL) has been required to pay GMR $1.5 million, as a result of the amount deducted from the concession fee being greater than the concession fee payable by GMR to the government.

An earlier agreement with GMR allows it to deduct $25 per passenger as Airport Development Charge (ADC), and $2 per passenger as insurance from the concession fee payable to the Maldivian government.

Financial statements sent by GMR to MACL show that MACL should receive $5.4 million as fuel concession and $192,033 as other income; resulting in total concession fee payable by GMR to MACL being $5.6 million.

The amount to be deducted from concession fee for insurance and ADC is $7.1 million.

Managing Director of MACL Mohamed Ibrahim said today that this results in MACL having to pay GMR $1.5 million; however, MACL will not pay this amount, as GMR deducts insurance and ADC from concession fee in violation of the agreement.

Despite GMR being required to pay $8.7 million, they only paid $525,355 as concession fee to MACL.

MACL, since its Board of Directors was reformed, has repeatedly informed GMR of the annulment of the former Board’s decision to deduct ADC and insurance from the concession fee.

GMR was allowed to deduct ADC and insurance from concession fee, following a Civil Court order which proscribed GMR to charge these fees on passengers, through a letter endorsed by former Chairman of MACL Bandhu Ibrahim Saleem.

This permission was given without the Board’s consent.

MACL has also filed the case of Saleem’s letter to GMR, to Civil Court.