In a 61-page investigative report (Dhivehi) made public yesterday (June 17), the ACC concluded that the bidding process was conducted fairly by the World Bank’s International Finance Corporation (IFC) and that the GMR-MAHB consortium won the contract by proposing the highest net present value of the concession fee.

The ACC further concluded that the awarding of the contract did not contravene amendments brought to the Public Finance Act requiring parliamentary approval for such agreements.

The amendments were published in the government gazette after the concession agreement was signed, the ACC noted.

The concession agreement was signed on June 28, 2010, while the amendments were gazetted on December 13, 2010, following a Supreme Court ruling. The amendments were voted through for a second time in August 2010 following a presidential veto.

On the previous administration’s decision to replace the board of directors at the 100 percent government-owned Maldives Airports Company Ltd (MACL) – after they refused to sign the concession agreement claiming insufficient information – the ACC observed that there was “no legal obstacle” for the move.

The ACC report also concluded that the government would benefit more from privatising the airport.

“Considering the situation (2008, 2009 and 2010) when the decision was made to privatise the Male’ International Airport,” the ACC’s calculations showed that MACL would make a profit of about US$254 million in 25 years if the airport was operated by the government-owned company.

Conversely, the government would receive about US$534 million in the same period from the GMR consortium if the airport was privatised, the ACC found.

The privatisation of the airport by the ousted Maldivian Democratic Party (MDP) government in June 2010 was strongly condemned by opposition parties on nationalistic grounds.

The Dhivehi Rayyithunge Party (DRP), Peoples Alliance (PA), Dhivehi Qaumee Party (DQP) and Jumhooree Party (JP) signed an agreement to work against the privatisation process and launched a media offensive alleging “massive corruption” in the awarding of the contract.

The ACC report this week meanwhile followed a special audit conducted by the Auditor General’s Office with the assistance of a British consultant concerning the airport privatisation deal.

The AG’s report stated that evidence to back allegations of “improper interference” during the technical bidding process “is not conclusive on this point” and deferred the matter to the ACC.

The AG’s report also noted that the IFC’s terms of reference involved “securing the best deal for the government in terms of the concession fee paid to the government and MACL, and did not consider impacts on the Maldivian economy.”

Government stance

In November 2012, the current government – made up of a coalition of parties opposed to the MDP government’s privatisation policy – declared the concession agreement with the GMR-led consortium “void ab initio” (invalid from the outset) and abruptly terminated the contract.

In April this year, the Attorney General’s Office confirmed that arbitration proceedings resulting from the contract cancellation would begin by mid-2014.