Potential loss of USD 100 Billion over 50 years due to privatization of airports: Ali Didi

Former High Commissioner to Sri Lanka and Ambassador to European Union, Ali Hussain Didi | Photo: Twitter

Male’, Maldives – Former High Commissioner to Sri Lanka and Ambassador to European Union, Ali Hussain Didi has stated that the recent steps to privatize and public list Maldivian Airports would be a major loss to the Maldivian people.

Ali Didi tweeted stating that privatizing and public listing Maldivian Airports assests as revenue support for the country’s budget can be a very expensive exercise for the country in the long run.

Noting that the opportunity cost of the airports over 50 years lease can be over USD 100 billion he stated that increasing SME and local industry revenue would be more beneficial to the nation.

Speaking on the matter with ‘The Times of Addu’, Ali Didi stated that such decisions taken by governments which come in for five year terms should be made with public engagement during planning as these decisions would be difficult to turn around later on.

He also added that while no domestic airports in Maldives were making any profits and that no vibrant economic growth is seen nearby the airports being operated in the Maldives so far.

Ali Hussain Didi’s remarks on the matter comes following the government’s decision to allow foreign companies to take 100 percent control over, and run airports in the Maldives for a period of 50 years which took effect from yesterday onwards. These companies are required to invest USD 5 million within a period of 5 years.

Ministry of Economic Development on Sunday revealed that Foreign Direct Investment (FDI) Policy was ammended, allowing 100 percent foreign-owned companies to operate and manage airports in Maldives. 

This was the first amendment to the FDI Policy, Annex I, Class Code H3, and has now been published on the gazette. 

With the changes, companies with 100 percent foreign ownerships can conduct the following air transport services:

  • Operate and manage airports (including terminal facilities such as airway terminal)
  • Airport and air-traffic control activities
  • Ground service activities and airfields

However, this freight services are not included in this. 

This decision from the government has attracted concerns and criticism from many. The critics state that letting foreign companies take over Maldivian companies is a threat to national security.

Following public criticism, Minister Fayyaz had given a press conference last night and had said that the wordings in the FDI amendment needed to be changed and that the government had no intention of allowing foreigners to operate airports.

The state does not have the money to [develop airports] immediately. As people need development, it will be much more profitable to do it now than do it after collecting enough money after 20 years.

Economic Minister, Fayyaz Ismail

He also assured the concerned citizens of Maldives that the incumbent government currently has no plans of giving the airports of Maldives to foreign people, however, as the country is low on budget, the government is intending to receive certain investments for new airports.

Prior to the changes, policy dictated that companies with foreign ownership up to 75 percent were allowed to operate air transport services, under a five-year operating period and with an investment of USD five million. 

The amendment will come into effect from the date of publication in the government gazette.