- Locals unable to shoulder added fee
- Might adversely affect tourism
- No immediate budgetary relief
Lawmakers Thursday put up a united front against the proposed Airport Development Charge (ADC) that will be charged from both local and international passengers departing from the country's main gateway Ibrahim Nasir International Airport (INIA).
During the parliamentary budget committee meeting Wednesday aired grievances over the proposed ADC to the ministerial economic council present in the sit-down.
Deputy leader of the ruling Progressive Party of Maldives (PPM) parliament group, Riyaz Rasheed said that no member of the PPM or coalition partner Maldives Development Alliance (MDA) support the proposed USD25 charge. Riyaz noted that ADC's are not collected from locals even in foreign countries, but only from the tourists.
"So the government coalition does not support taking this charge from the people," Riyaz stressed.
Jumhooree Party (JP) lawmaker Faisal Naseem also echoed the same stand insisting that the charge would be a huge burden for most locals who regularly leave the country for various reasons.
The government has proposed several new measures to boost state revenue in the budget for next year which includes an expected MVR 565.8 million from charging USD25 from local and international passengers leaving from INIA.
PPM parliamentary group leader Ahmed Nihan Hussein Manik had previously said the government plans to exclude locals from the charge.
Main opposition Maldivian Democratic Party (MDP) chief lawmaker Ibrahim Mohamed Solih pointed out that the present standard of living in the archipelago does not allow locals to shoulder the added the charge adding that it could also discourage tourists from visiting the country.
Addressing the concerns, Chair of the national economic council and minister at the President's Office Ahmed Zuhoor said that USD1 billion is being invested in the development of the airport, and that this money has to be recovered somehow.
He also noted that the model was universal and it would only be fair if it is collected from all passengers. Zuhoor said it was up to the parliament to decide whether to collect this charge from locals.
"It was proposed to collect this charge from locals as well. While the Economic Council is working to find solutions for these issues, we proposed this charge as part of minimizing subsidy. It is up to the parliament to decide whether to collect this charge from locals or tourists," Zuhoor said.
According to the budget plan, income collected from the ADC will be go into a newly establishing Sovereign Wealth Fund. This fund will be used after a three year time period to pay off government loans. Maldives has already collected three huge loans from three different countries in order to develop the airport.
Solih said that as the ADC income is being planned to be put in a fund, it would not provide immediate budgetary relief arguing that the charge was not a viable option.
MDP has however previously attempted to collect such a charge while the party was in government.
Indian infrastructure giant GMR’s plans to introduce an USD25 ADC in 2012 was a major point of contention that led to the annulment of its concession agreement to upgrade INIA.
A Singaporean arbitration tribunal ruled last month that the government must pay at least USD250 million in damages to GMR for the abrupt termination of the airport development deal.
