Maldives says resources deployed to ramp up main airport development

Relevant resources have been deployed to accelerate the development of the main airport, Maldives government has announced.

In his presidential address to the inaugural sitting of the parliament for the year on February 7, President Ibrahim Mohamed Solih said the slow progress of the development of Velana International Airport relative to the rapid expansion of the tourism industry, poses a persistent challenge to the tourism sector and curbs its optimal performance. Without the completion of a new terminal, the full potential of the new runway at the airport cannot be realised and more tourists cannot be brought in, he added.

“Our economic progress and tourism industry are inherently tied to the ongoing project to develop and expand Velana International Airport. The need to improve the services currently offered, and to expand the capacity of the airport is paramount to accommodate the increasing number of tourists and travellers,” the president said.

A newly developed runway at the Velana International Airport was inaugurated in September 2018, but it has yet to be used for flight operations.

Meanwhile, construction of a new international passenger terminal has stalled.

Designing and construction of the new 80,000 sq ft passenger terminal, which is expected to cater to at least seven million passengers per annum, has been contracted to the Saudi Binladin Group.

The new terminal, which costs USD 350 million, is part of a USD 800 million mega project to expand and upgrade the main Velana International Airport. The project also involves building the brand new runway and a seaplane terminal as well as other support facilities, including a fuel farm that can store 45 million litres and a 120,000 tonne cargo facility.

USD 570 million of the USD 800 million needed for the project have already been raised from international financiers, especially Arab funding agencies. It includes a USD 100 million loan from Saudi Fund for Development, a USD 50 million loan from Kuwait Fund and a USD 50 million loan from OPEC Fund for International Development (OFID).

China EXIM Bank has also granted a loan of USD 400 million for the new runway, which has been contracted to Beijing Urban Construction Group (BUCG) of China.

State-owned airport operator Maldives Airports Company Limited (MACL) has also invested USD 50 million from its own funds.

The airport is a key infrastructure that supports the Maldives multi-billion dollar tourism industry. Expansion of the airport is expected to boost tourist arrivals to the island nation as it aims to attract at least two million tourists by 2020.

By the end of last year, 1.4 million tourists from around the world visited the Maldives. There were 145 resorts and 521 guesthouses in operation, with a total of 44, 860 beds.

The government aims to attract around 1.5 million tourists to the Maldives this year and to increase that number to 2.5 million per year by 2023.

Reflecting the government’s pledge, the state budget for 2019 includes MVR 104,200,000 (USD 6.7 million) for tourism promotion, up from MVR 34,733,333 (USD 2.2 million) this year and the previous year.

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