The government has made the decision to invest USD 17 million (MVR 262.14 million) in Gan International Airport, located in Addu City.
The airport is operated by Addu International Airport Private Limited (AIA), co-owned by the government, Maldives Airports Company Limited (MACL), and Casa Holdings – a company represented by the top business operators in the country.
In an exclusive interview on Monday, Economic Minister Fayyaz Ismail told Sun that the government envisions great development to the Addu region, located in the southern end of Maldives, under its policy for decentralized development to the country.
He said that it requires immediate investment to infrastructure development in the region.
Fayyaz said he believes that linking Addu with the rest of the country via an extensive transport network will affect great development to the region, and that it requires developing and expanding the Addu airport to accommodate greater flight movements.
He said that the obstacle to increasing flights lies in areas which require improvement at the airport, and that the government has decided to invest in the airport to resolving the issues plaguing the airport and bringing about further development.
“The government has made all the arrangements and decided to invest USD 17 million to further develop the airport. We are arranging finance through the line of credit at India’s Exim Bank. This will be a huge boost to the Addu airport and the Addu region,” he said.
Providing further details regarding the investment, Fayyaz said the USD 17 million will be spent to affect changes to the airport’s terminal, building an air traffic control tower, and procuring technologically advanced equipment for the airport’s fire and safety, and ground handling.
“We receive major complaints regarding the airport from airlines. One thing which remains to be solved is the lack of capacity to increase flights. Therefore, our investment will go into issues that require immediate attention. This will provide a solution to operational issues facing the airport,” he said.
Parliamentary representatives for constituencies in Addu recently voiced concern over lack of development at the Addu airport, which sees only six daily flight movements, and is operating at a loss of approximately MVR 1 million per month. The flight movements at the airport have seen a further drop with the coronavirus pandemic.
When asked why the government plans on making such a significant investment in an airport running at such a loss, Fayyaz said that while the airport may be running at a loss at this time, it remains crucial to the development of tourism in the region.
Fayyaz said the government is fully confident the development of the airport will boost tourism, and spark greater economic activity in the region.
“Despite the current loss, it is the responsibility of the government to develop infrastructure. This will also spark many other activities, all around this investment. Revival of tourism in Addu depends on developing the airport and increasing flights. By bringing in direct flights. A lot of economic activity will come with this,” he said.
“Private companies will not make initial investments. They will not invest if there is a loss. But once the government invests and economic activities begin, private companies will invest to run profitable businesses.”
Fayyaz said the government wants to prevent the seaplane terminal developed at the airport from becoming a waste, and is currently engaged in discussions make the seaplane terminal operational through Maldivian Airlines.
He said that having a good transport network between Addu and other regions, even if it is a seaplane network, will make it more convenient for tourists to travel to Addu to procure the services available in the region.
Fayyaz said that the initial investments in infrastructure in Addu will make it a city of opportunities which will attract more investments.
“Addu has a good hospital. Road development is underway. And land reclamation will begin to develop resorts. Therefore, linking the city via a transport network will make it highly attractive. The current issue is the lack of infrastructure,” he said.
Commenting on the lack of success in developing tourism in the region, Fayyaz said that tourism in Addu must be developed to a different model. He said that a focus on history, culture and ecotourism is far more suitable for the region, and that the government is working on developing Addu as such a destination.
Fayyaz also said that the government has made significant reductions to tourist and rent in Addu to boost tourism development in the region.
“The land rent in Addu region is very low now. Where we charge USD 8 per square foot in other regions, we charge USD 2 [in Addu]. Addu has a unique tourism potential. Tourism in Addu and Fuvahmulah can be developed together,” he said.
“We plan on decentralizing development. Not to have all the development in Male’. We are making investments in Addu. This will create new opportunities in Addu.”