Indian Ocean games

Delhi must stop complaining and start thinking of how to repair strained ties with the Maldives

New Delhi is predictably upset with the Maldives for an amendment to the country’s constitution permitting foreigners to own land, provided the entity invests a minimum of $1 billion. The move is being seen as an attempt by the Indian Ocean atoll to forge closer ties with China. Chinese companies are already involved in other projects, notably the construction of a bridge to connect Hulhumale island, on which the airport is, with the capital Male. During Chinese President Xi Jinping’s visit last September, Maldives President Abdulla Yameen readily agreed to become part of China’s ambitious maritime silk route project. New Vice President Ahmed Adeeb has said that criticism of the amendment as a backdoor move to permit foreign powers to establish military bases on its territory are unfounded. As many as 70 members in the 85-seat Majlis voted in favour of the changes. Among the 19 opposition members who voted for the bill, 10 were from the Maldivian Democratic Party, whose leader, Mohamed Nasheed, a former president, is under house arrest. The concern in India, and for some in the Maldives, too, is that the possibility has not been ruled out entirely.




Sovereign nations act according to what they believe are their own best interests. Other countries have to work towards ensuring that these interests coincide with theirs. Delhi, which harbours an unrealistic expectation that its neighbours must play its game or none at all, was unfortunately not deft at deciphering the signals from the Maldives right from the time Nasheed was ousted back in 2012, or far thinking. It lost no time in dropping the young MDP leader and backing the new regime. It was only when the Indian firm GMR was turfed out from the Maldives airport project did Delhi fathom this Indian Ocean game ran deep. Despite his political brinkmanship, Nasheed was the most India-friendly politician in the Maldives. If some in his party have now voted in favour of the amendment, it is in the hope that in return, the Yameen government may give some concessions on Nasheed’s 13-year jail term, handed down by an anti-terrorist court earlier this year. 

India must stop complaining and start thinking of how to repair strained ties with this small but strategically important neighbour it has helped in many ways. One way to do this might be to step up engagement with all political players there immediately.

Source: http://indianexpress.com/article/opinion/editorials/indian-ocean-games/

GMR, Axis Bank Discuss $360 Million Loan for Maldives Airport Development

GMR Infrastructure Ltd., controlled by Indian billionaire G.M. Rao, is in talks with Axis Bank Ltd. on a loan of about $360 million to fund an airport project in the Maldives.

GMR’s Maldives venture may sign the 12-year loan by the end of this month, Sidharath Kapur, chief financial officer for airports, said in a telephone interview yesterday from New Delhi. The debt may be syndicated to overseas lenders and multilateral agencies, he said, without providing a timeframe.

The Bangalore-based airport operator and partner Malaysia Airports Holdings Bhd. in June won a bid to modernize and expand Male International Airport as they seek to benefit from rising tourism in the Maldives, a nation comprising 1,190 coral islands in the Indian Ocean. Indian companies such as GMR have expanded overseas as bureaucracy and land disputes slow infrastructure projects at home.

“For a company like GMR to grow, this is the way it has to be,” said Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., which manages $100 million in assets, in New Delhi. “Indian infrastructure projects can face bottlenecks and execution problems.”

A spokesman for Axis Bank, India’s fourth biggest by market value, said he wasn’t able to immediately comment.

Maldives Growth

GMR Maldives International Airport Ltd. will spend about $510 million on the Male terminal, which will have a capacity to handle 5 million users a year, Kapur said. The airport currently handles about 2.5 million passengers a year, he said.

“The government of the Maldives is taking steps to attract tourism from India and Southeast Asia,” he said. “That will drive growth.”

GMR Maldives, 77 percent owned by the Indian company and 23 percent by Malaysia Airports, will build and operate the terminal for 25 years. The facility will be ready by 2014.

GMR and partners also run airports in Istanbul, Turkey, India’s capital New Delhi and Hyderabad in the southern state of Andhra Pradesh.

The Maldives attracted 683,000 tourists in 2008, growing at an average 12 percent annual pace since 1980, compared with the world average growth of 5 percent, the government said on its website.

GMR got about 33 percent of revenue from airport operations in the year ended in March, according to data compiled by Bloomberg. The company also builds highways and operates power projects.

In July, GMR’s new terminal in New Delhi started international flights. The facility, run by a group also backed by state-run Airports Authority of India Ltd., Frankfurt-based Fraport AG and Malaysia Airports, cost about $2.7 billion to develop, along with other renovations.

GMR-MAHB Alliance Powering Into Global Airport Sector

The commercial alliance between Malaysia Airports Holdings Bhd (MAHB) and India's GMR Group continues to thrive in the airport sector and the completion of the Indira Gandhi International Airport's third terminal mirrors another success venture.

Now their partnership cuts across the borders, spanning from Delhi to Istanbul to Male in Maldives, to develop and operate international airports.

MAHB was part of the international consortium led by GMR, a leading Bangalore-headquartered infrastructure conglomerate that took 37 months to complete the swanky US$2.6 billion (RM9.1 billion) terminal, also named T3.

"Main fundamentals are our values -- the vibration is there and the humility. Lot of matching is there. So wherever we go, Malaysia is with us, in Hyderabad, Delhi, Istanbul (Turkey) and Maldives," GMR chairman Grandhi Mallikarjun Rao told Malaysian media on Sunday.

"Lot of our people in Hyderabad (airport) were trained in Kuala Lumpur, our AOCC (airport operation control centre) and lot of systems are from Kuala Lumpur and all were trained there. They help us in building infrastructure and managing airports," he said.

GMR holds a 54 per cent stake, while Airports Authority of India 26 per cent, MAHB 10 per cent and Germany's Fraport 10 per cent, to form a joint venture company Delhi International Airport Ltd (DIAL), which is involved in modernising India's main gateway.

Under a public private partnership model, DIAL, had been given the mandate to finance, design, build, operate and maintain the Delhi Airport for 30 years, with an option to extend it by another 30 years.

Recently, GMR tied up with MAHB to secure a bid to modernise Male International Airport, estimated to be worth US$373 million (RM1.3 billion), and in Turkey both pooled their expertise in 2007 to develop the Sabiha Gokcen International Airport.

"We consider ourself very lucky to have such a very good partner and we find the GMR Group to be very professional, knowledgeable, committed and reliable. Our relationship has blossomed," MAHB chairman Tan Sri Dr Aris Othman said at the press conference held at the newly opened T3.

Source: http://www.bernama.com.my

GMR says Maldives project safe despite political storm

The GMR group has said the current crisis in Maldives will not affect its Male airport development plans.

Maldives plunged into a crisis last week when its cabinet resigned en masse, reportedly over the grant of the airport project to GMR group.

GMR, which operates the Delhi airport, won the bid to build, operate, modernise and expand the Male International Airport (MIA).

As per reports in the local media, opposition parties have sought an injunction from a court to delay implementation of the agreement.

Spokesperson for the joint opposition committee, Imad Solih, was quoted saying, “(the agreement) contains suspicious (elements) and issues relating to corruption.” The opposition also accused the government of not consulting the Maldives Airports Company board members on the deal.

Kiran Kumar Grandhi, Chairman (Airports), GMR, said he did not think the crisis would affect the deal in any way. “The deal is done and sealed. We don’t foresee any problems,” he said.

“It’s all been done in a very transparent manner. The international bidding process was monitored by IFC, Washington,” Grandhi added.

GMR officials, who did not wish to be named, said there appeared to be a deliberate attempt on the part of some to create problems. “The process has been on for the last 10 months. Now, suddenly they have woken up and started making all kinds of allegations,” an official said.

Source: http://www.hindustantimes.com

NEWS TAV partners with AdP as Maldives tender reaches key stage

MALDIVES. TAV Airports Holding and Aéroports de Paris Management have teamed up to bid for a controlling stake in Maldives Airport Company Limited (MACL), which manages Malé International Airport. The move to privatise the state airports group has reached a key stage, with the government recently issuing Request for Proposal documents.

Six consortia pre-qualified for the bid in January, with a strong presence from India’s powerful aviation groups. The short-listed names include GMR Infrastructure Ltd, Zürich Airport in partnership with GVK Airport Developers Limited, Reliance Airport Developers Private Limited (another Indian company) with Mexican group Aeropuertos Y Servicios Auxilliares, SNC Lavalin International with Vienna Airport, as well as Turkey’s leading airports group TAV along with AdP.

In October 2009 the government launched the process to sell a majority stake in the airport company, to fund the expansion and development of Malé International. MACL will also be restructured so that the privatised company is not responsible for air traffic and security services, as it is currently.

The government has employed the services of the International Finance Corporation, a member of the World Bank Group which advises on infrastructure projects, to help it find an investor.

Source: http://www.moodiereport.com

3 Indian firms in race to take over Male airport

Three Indian companies are among the six shortlised to bid for the privatisation of the Male International Airport (MIA) in Maldives.

The evaluation committee, mandated by the Maldives government, has shortlisted GMR, which operates the new greenfield airport at Hyderabad and is constructing the world’s second largest airport in Delhi.

Also in the shortlist is a consortia of Reliance Infrastructure (with the Mexican government-owned Aeropuertos Y Servicios Auxilliares as partner), and GVK Airport Developers Ltd (GVK) in partnership with Flughafen Zurich AG, which runs the Zurich Airport in Switzerland.

Malé International Airport, located just three km from the capital city of Male at the island of Hulhulé, is the largest airport in Maldives, with a traffic of over 2.5 million passengers every year.

The investment required for the project — which includes operation, maintenance, expansion, rehabilitation and modernisation of the existing airport — may run into several hundred million dollars, said sources.

Privatisation of airports in Maldives is part of the government’s initiative to attract large scale private sector investments into the tourism driven economy of Maldives. Final bid submission is expected by May.

The other shortlisted players in the fray are Canada’s SNC Lavalin International with Vienna Airport (Flughafen Wien AG), TAV Airports Holdings Company of Turkey and Aéroports de Paris Management company of France.

Sources said there were 18 parties interested in bidding for the Male airport. The winner will get a controlling stake in the government-owned Maldives Airport Company Ltd which runs the airport.

International Finance Cooperation (IFC), a subsidiary of the World Bank, is providing technical support to the Maldives government in privatisation of the airport.

Sources said GMR Infrastructure Global, a subsidiary of GMR Infrastructure, had already signed a Memorandum of Understanding in November last year with the Maldivian government to upgrade the Hanimaadhoo domestic airport in the upper north province of Maldives into an international airport.

The company has submitted a two-phase development plan for this airport a few days ago, with suggestions to construct a 2.8 km runway and related infrastructure in the first phase. The Maldives government anticipates traffic at the proposed international airport at Hanimadhoo to rise to 2.5 million passengers by 2025. Currently this airport has a runway of 4,000 feet and handles only about 20 flights a day, said sources.

GMR also runs the Sabiha Gokcen International Airport in Turkey, along with a consortium of Limak Insaat and Malaysia Airports Holding Berhad.

A GMR spokesperson declined to comment on the developments. Telephone calls to some of the senior executives of GMR remained unanswered.

Both Reliance Infrastructure and GVK spokespersons were not available for comments.

A GVK led consortium runs the Mumbai International Airport. The G V Krishna Reddy-controlled GVK Power and Infrastructure also had recently acquired a 29 per cent stake in the new Bengaluru International Airport.

Anil Ambani Group-led Reliance Infrastructure is relatively a new entrant into development of airports and recently the Maharashtra Government had chosen the company to develop and operate five non-metro airports in Maharashtra.

Source: http://www.business-standard.com