ADC a common concept in many airports
GMR is aware of the press reports that Civil Court of Maldives has ruled against the Government of Maldives allowing GMR to levy Airport Development Charge (ADC) of USD 25 per departing international passenger and USD 2 of Insurance Charge per passenger. We are yet to receive the copy of the judgment and as such we are not in a position to evaluate the implications of the ruling.
The bid for the Concession to manage, develop and operate Ibrahim Nasir International Airport for 25 years was conducted by IFC and the component of ADC was part of the bid. Departing passengers paying a development fee is a common concept in many airports globally and are increasingly featured as part of concession agreements where airports are being privatized. The reason for the inclusion of ADC in many global concession agreements is to address the funding needs to meet the investment model required to upgrade and develop new airport facilities at significant costs. GMR has been permitted to collect ADC and Insurance charge under the Concession Agreement signed between GMR-MAHB, Maldives Airport Company Limited (MACL) and The Republic of Maldives (acting by and through its Ministry of Finance and Treasury) and as such has set up processes for ADC collection from 1st January 2012 supported by an information campaign to ensure adequate awareness. GMR is confident that Government of Maldives will take such measures as would be necessary to honour its contractual obligation in this regard, given that the success of the development of the airport project is of national economic importance.