Report on Assessment of Male International Airport

Privatization by Maldives Anti-Corruption Commission

(Official English translation of original Dhivehi report )

The assessment on the progress of operating and developing the airport together with the govt.
started On 25 August 2010. The bid documents and other related papers were checked, revised
and relevant persons in the Public Enterprises Monitoring and Evaluation Board ((PEMEB) of
the Ministry of Finance were interviewed.

Progress of events

As an announcement made by Investment Maldives in December 2008 seeking a party to

operate Male International Airport failed to garner any attention from the public, a financial
advisory agreement seeking professional advice on airport privatization was signed with
International Finance Corporation on 28 July 2010. As per this agreement (annex 1), the
purpose of the agreement to seek a partner to buy 49% of shares of MACL or a party to develop
the airport together with MACL under private-public partnership for the GoM for a decided
period, under a competitive bidding process. (The decision to handover the operations were
made after RFQ stage.)
In return, GoM was required to pay USD $15,000 to IFC on the day of signing the agreement.
USD $ 15,000 was to be paid from the moment IFC starts work and USD $ 20,000 was to be
paid upon submission of transaction structure report. Further, another USD $ 15,000 was
required if IFCs service period exceeded 12 months. Once the project was awarded, the bid
winner too was required to pay IFC the higher amount between 1% of the project and USD $
750,000.

The bid documents and other necessary information under this agreement were prepared by
IFC. The following chart outlines the progress of the bid process.
1-

IFC agreement

28/7/09

2-

Transaction Structure Report

3-

Announcement

4-

EOI acceptance

5-

Sending RFQ

23/12/09

6-

Pre-qualification Application acceptance

17/1/10

7-

Pre-qualification evaluation

20/1/10

8-

Sending of RFP/IM

18/3/10

9-

Bid opening

20/6/10

6/10/09

10- Bid Evaluation

24/6/10

11- Signing the agreement

28/6/10

Transaction Structure Report

Since the senior officials associated with PEMEB were not available until the time of writing this
report, we could not get hold of the transaction structure report that IFC submitted to the GoM.
However, we have the IFCs presentation of the transaction structure report.
Looking at the information in this presentation (annex 2), the airport does not suit the standards
of the International Civil Aviation Organization. The GoM was advised that USD $ 377 was
required to upgrade the airport to meet those standards, airport development charge needed to
be applied, and that there were two ways of buying investment for the airport. One, selling the
shares and the other was making a concession agreement.
Thus, it was estimated that if 51% of MACLs shares were to be sold the GoM will at net present
value receive a revenue of USD $203.9 Million as dividends and service charge. However,
according to the presentation, if a concession agreement is made, the occupier must pay an
occupancy fee and an estimated 5% of their income to the government. The net present value
of the GoMs expected revenue under this concession is expected to be USD $ 243.6 million.

EOI Phase

The Ministry of Finance and Treasury on 6 October 2009 issued an announcement to seek
interested parties to buy MACLs shares. In this announcement (annex 3) the GoM had said that
they would leave control of the airports company and restructure the building and agree for a
more flexible investment plan. The shortlisting criteria of parties submitting EOI (Expression of
Interest), was said to be experience of serving more than 3 million passengers a year, and
financing and operating the airport. It was also mentioned, in relation to the initial announcement
that, a party could form a consortium with another party in order to achieve the mentioned
criteria. It was also mentioned that after the asseement, the shortlisted candidates would be
sent a Request for Qualification (RFQ) in December 2009 and a Request for Proposal would be
sent afterwards. Once the confidentiality agreement is signed and sent along with EOI, the party

would get the opportunity to visit the venue and seek more information. The announcement
does not specify a deadline for submission of EOI.
Below are the details of parties that submitted EOI and their dates of submission.
Tepe Afken Airpoerts TAV (21/10/2009)
Informs that they currently operate 11 airports, serves 41 million passengers and the company
has a market value of USD $ 5 billion.
Flughafen Zurich AG (Unique) 29/10/2009
Operates 10 airports including (Zurich airport and Bangalore airport, serves 22.1 million
passengers and generates an income of USD $ 780 million a year and have won the best
airport in Europe for a second time in 2008.
However, they do not develop airports
GMR infrastructure Limited (30/10/2009)
The company has assets worth USD $ 2.98 billion, projects worth USD $ 9 billion are in
progress, is the designer, developer and operator of Rajeev Gandhi International Airport in
Hyderabad serving 6.2 million passengers and serves 22 million passengers in Delhis Indira
Gandhi International Airport. IN addition, they are also operating an airport in Istanbul Airport
that serves 5 million passengers. They also said that they would form a consortium as
mentioned in the RFQ and further claimed to be operating businesses in coal mining, highway
construction as well as other infrastructure development.
Aeroports de Paris Management (ADPM0 (30/11/2009)
Operates the airport in Paris, has invested and operates 30 airports from around the world and
serves a total of 130 million passengers. Also claims to generate revenue of Euro 2.5 billion.
Reliance Airport Developers Private Limited (30/11/2009)
Operates 5 regional airports in India and has formed a consortium with Mexico Airport operators
in 2007 to bid together. They also claim that the reliance group is worth USD $13.6 billion.
Larsen and Turbo Limited Chennai 5/12/2009

Claims to run different industrial businesses and worked in the infrastructure of airports in
Hyderabad, Bangalore, and Delhi of India and apart from road, harbor and power plant
infrastructure. The company is worth USD $ 7 billion. However, it is not known whether the
company operates airports.
Egis Projects, Aeroports de la Cote dAzur and Mauritius Commercial Bank (MCB) Capital
Partners (9/12/2009)
The companys assets are worth Euro 200 million, and operates 4 international airports
including Nice Airport in France. They also claim to have served 9 million passengers in this
airport.
SNC-Lavalian Inc/ Vienna International Beteiligungs Management GMHB on behalf of
Fulghafen Wein AG (Vienna International Airport VIE (19/12/2009)

It was informed that S.N.C was responsible for constructing and engineering International Airports at
Canada, Moscow, France, Spain, USA and Libya and also informed that V.I.E is in charge of Vienna
Airport operations holding passenger traffic of 19.7 million and generates a revenue value of 548.1 million
Euros.
It is observed that there was no official attempt for registration of all the E.O.I applicants for this projected.
As such, one of the above named, Larsen and Toubro Limited was not mentioned as one of the E.O.I on
the prequalification evaluation report. (Annex 6) But In this report, Incheon International Airport is listed
to have submitted E.O.I while there is no written evidence or that this company had ever submitted an
E.O.I. there is no available EOI from the company either. Theres no justification as to why Incheon

International Airport was listed as to have submitted EOI instead of Larsen and Toubro Limited.

Prequalification Process

rd

On 23 December 2009, the previously mentioned submitters for E.O.I were shortlisted and a Request for
Qualification was sent. (It is still unavailable to obtain the email sent from IFC regarding the RFQ)(Annex
4)It is mentioned in clause 1.2 that as the Government still havent concluded on the decision whether
Male International Airport is to be operated under a share based privatization, or to lease (concession),
that the Government shall decide after the Prequalification process. Furthermore, it was mentioned that

for those who pass through the FQ criterion, shall be prequalified and shall send Request for proposal
so that way they can be given the additional diligence for the preparation for the final bid. The deadline to
th

submit for prequalification process was 18:00 hours of 15 January 2010.

In RFQ clause 1.5, it says that those who were shortlisted E.O.I (even a consortium) is controlling a share
percent more than 5% of another shortlisted E.O.I (even a consortium), or if a director of a shortlisted
E.O.I (even a consortium) is controlling a share percent more than 5%, they cannot participate.
Furthermore, even those who are connected with anyone advising the Government on the project
proceedings are also barred from participating. Those involved in this project in advising the Government
were a technical consultancy firm, Halcro LLP (UK), a Legal firm Gide Layette Noel Law firm (France) and
from Maldives, there were Munawwar and Associates and Ernst and Young.
Furthermore, according to clause 1.4, those who were shortlisted can participate as a whole consortium
by joining in with an additional company or companies. They should have lead member who is assigned
by the consortium in representing, also that they could be assigned as financial investor or an Airport
Operator.
The standards for evaluation of the prequalification applications as mentioned in clause 2.3 are listed
below.

Technical Criteria

Candidate or in case of a consortium, at least 1 member of the consortium

must have within the past 10 years for a period of 5 years operated an
airport that serves more than 3 million passengers per year.

Financial Criteria 1

Candidate or in case of a consortium, the average annual turnover of the

financial investor for the past 5 years must be above USD $ 200 million.

Financial Criteria 2

Net worth must have been above USD $ 50 million every year during the
past 3years.
In case of a consortium, the net worth of the whole consortium must have
been above USD $ 100 million every year during the past 3 years
The net worth of the financial investor in the consortium must have been
above USD $ 50 million every year during the past 3 years.

The information required for evaluation based on the above points was supposed to be
according to the formats in RFQ annexes. Thus, Power of Attorney as per the RFQ, information

forms of the candidates, financial information and experience form as well as pre-qualification
application form were required to be submitted. Other documents that were required along with
these forms was also mentioned clearly.

Request for Proposal (RFP) Phase

An information memorandum inclusive of the request for proposal and information regarding the
project was sent on 18th March 2010 to the aforementioned 6 prequalified parties. (Annex 7
RFP) According to 1.2 of the RFP Male International Airport is being privatized under a
concession agreement (on to loan to be operated and developed for a specified period of time).
According to 3.1 of the RFP the bid has to comprise of three parts. That is the legal bid,
technical bid and the financial bid. It was informed that within the evaluation the first to be
considered would be the legal bid. Those whose legal bids have been approved will pass to the
evaluation of their technical bid. Financial bid will be considered if the technical bid has passed
approval. As such 3.3.2 states that the evaluation of the technical bid would hold considerations
as specified in RFP Schedule 2s Draft Concessional Agreements minimum technical
requirements and (MTR) its standards.
As stated in 5.5.3 in approving the financial bid consideration is given to the net present value
that is given after an annual 10% discount on of all government concessional fees. As follows,
the party that proposes the concessional fee with the greatest net present value would be
awarded the bid.
Additionally when in view of the other specifications stated in the RFP, 6.6.2 states that the bid
successor is required to pay 1% of the total investment amount for the airport. In addition an
equal amount is deducted from the initial concession fee to be paid to the Maldivian
government. It is stated that the agreement must be signed within 15 days of being awarded bid
approval.
According to 3.2.5, if the party is a consortium then the party within the consortium that is to be
responsible for operating the airport must own more than 5% of the consortium in shares. The
RFP states that for those wishing propose bids through RFP, the use and services of the date

room would be available for purposes of analysis and obtaining further information, and that all
queries must be sent in writing to the Maldivian Government and additionally to IFC as well.
RFP provides complete detail regarding the content that is necessary to be included in every bid
and the documents that should be presented with the bid. Thus the following specifications are
required to be included in the legal bid;

Bid Form:- According to the sample on Schedule 4, Form 1

Bid Security:- According to the sample on Schedule 4, Form 2

Confirmation of Status:- According to the sample on Schedule 4, Form 3

Corporate Structure:- A report describing the corporate structure of the party proposing
the bid

Power of Attorney:- According to the sample on Schedule 4, Form 4

Report concerning Conflict Of Interest:- According to the sample on Schedule 4, Form 5

Initially proposed draft Concession Agreement:-According to Schedule 2

The specifics of the technical bid are based upon the specifics that need to be included in the
MTR of the draft agreement. The specifications that need to be included because of this are as
follows;

The strategic plan for development:- long term vision, means for raising capital for
development, estimated traffic, strategy for expanding market and profitability, estimated
profits and expenditure, process for handling operation

Construction plan:- fulfillments to be met according to civil aviation regulations, terminal

building, airfield pavement, land acclamation, supporting services, landside development

Main plans for management:- safety plan, environmental plan, operational plan

The financial bid has to be presented according to the sample on Schedule 4s Program 6. This
form as on the RFP is different from the forms presented on proposal. The RFPs form does not
state the inclusion of a concession fee for oil. Instead it states that a percentage of total profits
will be paid to the government. The writing/email sent to notify the parties participating in the bid
of the amendments made to this form has been as of yet unavailable from the IFC. According to
this form, the amounts for concession fee must be presented as stated below;

The amount payable for the initial concession fee before the bid it is handed over

The amount of USD 1.5 million payable as the annual concession fee (the amount stated
on the form)

The percentage payable to the government from profits excluding those obtained from
the sale of oil starting from the date of occupancy up till 2014

The percentage payable to the government from profits excluding those obtained from
the sale of oil starting from 2014 to the end of the contract

The percentage payable to the government from profits obtained solely from the sale of
oil starting from the date of occupancy up till 2014

The percentage payable to the government from profits obtained solely from the sale of
oil starting from 2014 to the end of the contract

The bid data sheet included with the RFP states that the last date for proposing the bid is at
17:00 of 13 June 2010. Also that the bid must be presented with a bid security of USD 750, 000,
that is with the original document and three copies.
The memorandum that was set sent with the RFP (Annex 8) describes in detail the operation of
the airport, the current situation, financial information and the legal information. In the
information given it is mentioned that in May 2007 a company called Dynatest was hired to do a
sustenance survey of the airport runway pavement and that the surveys indicated that 845
meters long area is below the ICAOs (International Civil Aviation Organization) safety standards
and that although the airport is only 20 years old, that it would have to be repaved within 10
years time. Additionally Halcrow (one of IFCs consultants on this project) stated on November
2009 that when the condition of the apron was examined it was discovered that the drains of the
runway were damaged and that some of the drain covers did not have the required strength,
thus compromising the safety of parked air vessels.
In 2009 out due to Maldives Airport Companys proposal to Maldives Civil Aviation Department
for obtaining Aerdome certification, an Aerodome audit was carried in which 53 points to be
addressed were noted including points such as the runway not being wide enough and the
safety zone at the end of the runway (R.E.S.A) failing to have adequate space.
The IM also states that the existing Terminal Buildings (International and Domestic together)
size is 12470 square meters which is smaller than IATAs service level C standard facilities and
that there is not enough space south of the existing terminal, apron and taxi way therefore
requiring the construction of a new terminal on the east side of the runway along with an apron
and taxi way as well.

In addition to the aforementioned information, information about the fact that the current fuel
farm is placed closer to the runway than the recommended safety standards, that the current
cargo terminal needs to demolished and a new one constructed due to the current cargo
terminal being timeworn and damaged, that the cosway bridging Hulhumale requires a new
connecting road to be built to link with the new terminal, that the sewage that is being emptied
into the sea currently has not been treated, as well as the fact that airport control is currently
being managed by the Airport Company was also stated. It was also noted that once the new
airport terminal is in service the Hulhumale Lagoon (near the seaplane terminal) would require a
jetty to be constructed allowing for the docking of vessels.
Amendments for the faults as dictated above were included in the minimum technical
requirements (M.T.R) for the development of the airport. As such the main clauses included are
as follows:

Demolition of the buildings towards the South of the Runway that are identified as
obstacles in the in the blueprints

Relocating the terminal to the East side: A terminal must 45000 square meters in size,
must have 11 Code C Stands and 6 Code E Stands out of which 4 Code E Stands and 1
Code C Stand must have an air bridge and also the building should be viable for at least
50 years of usage.

A V.I.P/C.I.P Terminal Building that has 42 000 square meters in floor size with one
Code C and one Code E stand, must be constructed

Laying of a fiber optical network for airport usage

Airports ICT system: Information system, baggage system, check-in system, placing
information kiosks

Changing the location of the M.N.D.F building

Apron: Be able to use for 25 years, meet the requirements of the ICAO, change the
drainage systems to meet the safety requirements, have the necessary power
generation and communication infrastructure.

Have a taxi-way leading to the new apron: Being able to enter the new apron without
having to go the end of the existing runway and be able to use for another 20 years.
Have the necessary power generation and communication infrastructure.

Repairing the runway: Before the 2015, repair and upgrade to the necessary standards,
the 7600 square meter area indicated in the Dian Test report. The repaired area should

be able to use for another 20 years. The drainage system should meet the necessary
standards and should be able to use for 50 years.

Road construction: Construct a road that leads from the East to the West of the runway.
This road (which estimated as to be 21000 square kilometers) should be able to use for
20 years.

Land reclamation.

Make a new base for the ground handling.

Make a storage facility to keep the aircraft spare parts.

Relocating the existing fuel pump.

Relocate the fire station, construct a new building and develop the roads leading to the
new fire station

Build a harbor and develop the jetty

As per the security requirements, place fences around the airport and build a security
system.

In addition to this, other requirements and the details of those international standards and
Maldivian regulations that needed to be complied are included. Also in the annex 18, of the
draft agreement, the details of the level of the services that need to be provided at the
airport and the key-performance-indicators are included. According to estimations of I.F.C in
the Information Memorandum, to fulfill the requirements of the M.T.R a sum of 366.5 million
US Dollar is required. Also by 2014, to comply with the international and the Maldivian
regulations, a sum of 287 million US Dollar is needed.

The detail of the airports revenue and the traffic and included in the I.M. In this regard, there
are two different ways that the airport will be gaining the revenue. The revenue generated
from the traffic and the revenue generated from the non-traffic activities. In the traffic
revenue includes, landing fee, parking fee, navigation fee and the ground handling fee. The
total traffic revenue is less than 20% of the total. The non-traffic revenue includes
passenger service charge, fuel charges, rent charges and other revenue generations. It was
expected to have a 2.4 billion Rufiyaa by the end of 2008, of which 80% is from trading fuel.

The parking fee is considerably higher than other airports in this region. But the fuel price is
cheaper than the others. By the end of 2009, it is expected to serve 2.6 million passengers
and handle 42,000 ton cargo. In addition the expected traffic details and different fees and
the rates are also mentioned. It also indicates that the ground handling charges will be
increased from January 2010.

In relation to this R.F.P, on 20 June 2010 3 parties submitted the bid proposal (Annex 9 Bid
receipt register). But in R.F.P the bid closing date is 13 June 2010 1700hrs. We are unable
to obtain the details of this change brought to the bid closing date and the email sent to the
parties from the I.F.C. The bidders are:
1. G.M.R Infrastructure limited / M.A.H.B
2. G.V.K / Unique (Flughafen Zrich AG)
3. T.A.V / A.D.P.M (T.A.V and A.D.P.M, individually applied at the R.F.Q phase)

Bid Evaluation

The bid evaluating committee comprises of:

1. Ali Shiyam: Economic Advisor of the Presidents Office
2. Ahmed Nizam: Maldivian Air Taxi
3. Ahmed Mahreen: Regional Airport department
4. Ali Arif: Minister of Finance and Treasury
5. Abdulla Mohamed: Civil Aviation Department
In addition, the following took part as observers and technical advisors.
1. Mohamed Ibrahim: Managing Director of Maldives Airports Company Ltd
2. Hussain Siraj: Board Director Maldives Airports Company Ltd
3. Ms. Ramatut Magagee: IFS
4. Ms. Nehaa Mehery: IFS
5. Mr. John D. Crothaz: Gide Loyrette Nouel
6. Mr. Fabian Lenteri Masa: Gide Loyrette Nouel

7. Mr. William R. Milington: Halcrow Group

8. Mr. Christopher Penn: Halcrow Group

Legal bids presented

The three parties have submitted all afore mentioned documents as required in the legal bid
according to the RFS regulations. Looking at the corporate structure presented, GMR
consortium has 77% for the GMR Infrastructure Ltd and 23% for Malaysia Airports Holdings
Berhad. Unique Consortium has 80% for GVK Airport Developers Pvt Ltd and 20% for Zurich
Airport International AG. Zurich Airport International AG is a 100% share holding subsidiary of
Flughafen Zurich AG. T.A.V Consortium consists of 39.5% from T.A.V, 25.5% from A.D.P.M,
and 35% from Capital Advisors Partners Asia Pvt Ltd. (Anex 10 Corporate Structure)
All three bids had passed the Legal Bid Evaluation and moved on to the technical evaluation.
(Anex 11 bid evalauation report)

TECHNICAL BID
All three bids presented had passed the technical evaluation and gone to the financial
evaluation.
There was nothing that contradicted the technical requirements in all three bids. As per RFP
technical bid, all three had the necessary requirements as mentioned above.
The evaluation committee first looked at the GMR bid for the technical bid evaluation on 21st
June 2010. The following points were noted from the evaluation.
1. GMR bid includes building a runway but has not specified a timeframe for it. The
agreement states in the 3.6 of the M.T.R that it should be finished before 2015.
However the evaluation committee did not see it as a point to fail the bid. It was said in
the report that the bids that were evaluated later were also similar to how the GMR had
presented it.
2. GMR had included in the operational plan, under seaplane operators responsibilities,
an emergency rescue plan. However in other parts of the agreement, fire extinguishing

and emergency response is the responsibility of the renting party and therefore the
committee did not see it as a point to fail the bid.
3. Under 6.4 of the M.T.R, there has to be a physical barrier to the area where the
seaplanes land so that no sea faring vehicles can enter it. GMR bid proposes that there
be buoys to mark the area. The evaluation committee decided that the M.T.R did not
specify what the physical barrier should be and thus it is not against the requirements.
4.

The drawings from the Unique GVK bid differed from the seaplane terminal and so the
matter was sent for clarification. Changing the seaplane terminal was not included in the
M.T.R. GVK replied that they had designed the terminal giving importance to the
comfort of the passengers to go from one place to another and therefore brought the
seaplane terminal in front of the airport terminal in the long term master plan. They also
said that if they are to do it, they will talk to all the necessary parties and do so only if
there is no objection to it. Evaluation committee accepted the answer and so passed the
bid.

5. GMR bids Strategic development plan includes detail of the expenses of fuel trading
but because the expected expenses were not in the table on page 57, and due to the
estimated traffic volume for 2012 being lower than the 2009 actual value, and although
international traffic volume was greater than the estimate from IFC, the aeronautical
income was not increasing and therefore was sent to GMR for clarification.
GMR answered that the fuel trading expenses is included in the employees, utilities,
construction and other expenses details and that it has been sent. Also that the
seaplanes have not been included in the domestic traffic volume and only land plane
passengers have been included in the Domestic Traffic Volume in page 12 of the bid.
The amount with the seaplane passengers included was given in the answer by GMR.
The evaluation report notes that the Evaluation committee accepted the answer and
decided that the bid was passed on 24th June 2010 with 3 votes for and 2 against.

In addition to this, we observed down the following points.

GVK/Unique bid proposes to reclaim land and make a road at the end of the runway and
instead of taking a safety area, to use the technology, which stops airplanes faster. They had
given different options for making the road at the end of the runway. The proposal was to make
the road using a jetty or a tunnel at the south end of the runway near the sea. The other two

bids had proposed to take space from the south end of the runway for the road and safety area
and to reclaim and extend the runway from the north side.

In the technical requirements 3, airfield pavement should be made so that the apron can be
used for the next 25 years. Thus, it should be made up to the standards as said in F.A.A
advisory circular AC 150/5320-6E and I.C.A.Os S.A.R.P.S annex 14 and I.C.A.Os A.D.M.
However T.A.V/A.D.P.M bids page 40 says the duration is 20years. If the pavement is made as
per the F.A.A advisory circular AC 150/5320-6E, the pavement can be used for 20 years. The
other bids had no mention of this.

FINANCIAL EVALUATION

Since all three bids had passed the technical evaluation, the financial evaluations were done
next. The evaluation was done by referring to the net present value of the concession fee that is
paid to the government according to the R.F.Ps financial form. The form states that the
evaluation criteria will be based on the R.F.P.As baseline payment made to the government at
net present value. The details of the proposed concession fees are shown in the table below.
GMR/M.H.B

Unique

TAV/AD.P.M

A/M.H.B

Initial concession fee before handover

Percentage of the revenue gained other than from the oil

78 million

27 million

7 million US

US dollar

US dollar

dollar

1%

27%

31%

10%

9%

29.5%

15%

9%

16.5%

27%

9%

16.5%

trade starting from the end of 2015 year contract.

Percentage of the revenue gained other than from the oil

trade starting from the initial starting date till the end of 2014
year contract.

Percentage of the revenue gained from the oil trade starting

from the initial starting date till the end of 2014 year
contract.

Percentage of the revenue gained from the oil trade starting

from year 2015 till end of contract.

As such, I.F.C (International Finance Corporation) have calculated net present value revenue at a rate of
240 million US Dollars rate for every year of the 25 years period. That is the revenue value of 180 million
US Dollars calculated for trade of oil and revenue value of 60 million US Dollars calculated for other trade
other than the trade of oil. Even though its mentioned on RFPs 5.5.3 that net present value is estimated
by referring to I.F.C, its not mentioned exactly that this calculations real source comes from I.F.C.

By

the end of year 2008, the revenue collected from Maldives Airports Company Limited (MACL) was 152.8
million US dollars from oil trade and another 38.1 million US dollars for trade generated from other trade,
together total revenue of 190.9 million US dollars.

It is predictable that from the calculations of IM that for every passenger of the estimated 2.5 passengers
for year 2008, theres revenue of 75.1 for each and every passenger. And also from IMs estimation for
the backspace scenario for year 2010 was stated as 2.6 million passengers, as well as by the end of year
2035, it is estimated that for every year there will be 5.1 million passengers. We can safely believe that
this calculation by IM for 240 million US dollar revenue as a prudent estimate.
From the above estimations, the net present value for the concession fee calculations are much higher for
GMR consortiums, that is a net present value of 529.07 million US dollars. (Refer to annex 12, MPV
calculation) and furthermore, they have also offered to invest a value of 368 million US dollars for the
Airport.
The second high concession fee was submitted by T.A.V/A.D.P.M bid, which was an amount of 483.45
million US dollars together with their offer to invest 434 million US dollars for the Airport.
The Highest bid to invest on Airport was submitted by Unique A/G.V.K with an investment value of 594
million US dollar, but their net present value was 280.35 million US dollars only.

Thus, the bid was won by the GMR consortium by submitting a Net Present Value of the
highest concession fee.

Agreement

The agreement with the winning party, GMR was signed on 28th June 2010. (Annex 13Agreement)

Below mentioned are the key highlights of the agreement.

Leasing duration of the Airport is 25 years.

Air Traffic control and navigation services will be given by Maldives Airport Company Pvt
Ltd.

Permitted to use all assets in Airport to gain economic profit.

Airport services must meet level C of IATA services.

The occupier does not have to take any responsibilities of the liabilities of Airports
Company Pvt Ltd.

Reports must be submitted with fees payable in every four months.

Current Employees can be terminated only after 2 years from the day of signing the
agreement.

Sea Planes will be operated by the current service providers.

Fees can be charged according to the following.

o

Fees charged by government

Passenger service charge

Air traffic fee

Fees charged by occupier.

U SD 25.00 from every passenger from per passenger as Airport

Development Charge.

USD 2.00 per passenger as Insurance charge

Landing fee

Parking fee

Ground handling charges

Aero Bridge Fee ( USD 100.00 per usage)

Fuel charges

Commercial revenue

Rent from leasing of property

Seaplane landing fees and other aeronautical fees.

In addition to these, all the aeronautical fees will be adjusted to inflation based on US consumer
price index in every 3 years.

Conclusion
Below are the details of share profits from MACL to the Government of Maldives in the previous
3 years. (Extracted from budget reports)
2008

2009

2010

171,506,451.00 MVR

65,525,085.00 MVR

62,790,164.00 MVR

Since 2008 the revenue of MACL has gone down significantly. Considering 2008s dividends
revenue to remain the same for the next 25 years, when discounting the revenues 10%, the
present value is identified as 121.14 million US Dollars (171.5/12.85x9.077). In GMRs bid, the
figure indicated as the expected revenue to be generated, considered to remain the same for
the next 25 years, when discounted at the rate of 10%, the present value is identified as 973.91
million US Dollars. (Annex 15). Therefore on a concession basis by handing the airports
management, the government will be able to gain a greater financial gain.
Till the time of compiling the report, we have not received some of the emailed from IFC. (Annex
14)
Though there are some minor issues in the technical bid evaluation (which does not affect the
outcome of the result), the whole process of the bidding process has undergone on a
professional basis.



25
2010 .
)....(

2008

28 2010 ). (1
49%
...
) . .
(.
15,000/-.. . ..
15,000/-.. 20,000/-

. .. 12
..
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.. .

.

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28/7/09

6/10/09

28/6/10

..

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23/12/09

17/1/10

../

18/3/10

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243.6 .

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.


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3 .
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.. .
.

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)Tepe Afken Airports TAV (21/10/2009
11 41 5 ..
.
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10 ) (. 22.1
780 ..


2 2008 .
.

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2.98 .. 9 6.2

22 .
5 ...
.
.
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30
130 . 2.5 .
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5 2007
13.6 .. .
Larsen and Turbo Limited Chennai 5/12/2009


7

.. . .
Egis Projects, Aeroports de la Cote dAzur and Mau ritius Commercial Bank (MCB) Capital
)Partners (9/12/2009
200 4
.
9
SNC-Lavalian Inc/ Vienna International Beteiligungs Management GMHB on behalf of Fulghafen
)Wien AG (Vienna International Airport VIE (19/12/2009

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.2

SNC-Lavalian Inc and Fulghafen Wien AG SNC-Lavalian

.3

GMR Infrastructure Limited and Malaysia Airports Holdings Berhad(MAHB) GMR

.4

TAV Airports Holding Company

.5

Flughafen Zurich AG. (Unique) and GVK Airport Developers Limited Unique

Aeroport de Paris Management ADPM .6

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2014

2015

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USD750,000/- 3.


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287 .

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.
80%
2009 .
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27

1%

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31%

2014

/..

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2014

2015

10%

9%

29.5%

15%

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16.5%

27%

9%

16.5%

.. 25 240
. 180 60 .
.. 5.5.3 .. ..
../. 2008 .
152.8 38.1
190.9 .
2008 2.5
75.1 . . ..
2010 2.6 2035 5.1
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.

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o

2012 25

100

3
.




3
) . (
2008

2009

65,525,085.00 171,506,451.00

2010
62,790,164.00

2008 2008 .

10%
25
121.14 (171.5/12.85x9.077) ...

10%
25
973.91 ) . (15
.
.. ) . (14

.
23 2010