New Terminal, Old Questions: Was Ending the GMR Deal the Right Call for Maldives?

Why I Wrote This

With the grand opening of Velana International Airport (VIA)’s new terminal scheduled for 26th July 2025, there’s been a surge of renewed debate on Maldivian social media about the controversial decision to terminate the GMR airport deal back in 2012. People are asking: Was it worth it? Did we come out financially ahead—or did we lose more than we gained?

Despite all the noise online, I couldn’t find a well-sourced, data-driven article that looked at both sides with real numbers.

So I decided to dig into the data myself.

I’m not a financial expert, but I’ve tried to pull together publicly available figures and make this analysis as accurate as possible. For transparency, I should mention that I was a recipient of the MACL scholarship in 2013, after GMR was removed—so consider that a potential conflict of interest.

With that said, here’s what I found.

The GMR-MACL Deal: A Quick Recap

In 2010, the Government of Maldives signed a 25-year concession agreement with Indian infrastructure firm GMR and Malaysia Airports Holdings Berhad to develop and operate the Ibrahim Nasir International Airport (INIA) (now Velana International Airport).  The deal was signed under dubious circumstances, with the then government reshuffling MACL board members who opposed signing the agreement and calls from other firms who participated in the tender to revaluate the bid.  Under the deal:

• GMR would invest $400 million to build a modern terminal
• Fund the project through a $27 Airport Development Charge (ADC)
• Operate the airport while paying annual concession fees to MACL (Maldives Airports Company Limited)
• The concession fees would be 1 percent of profit and 15 percent of fuel sales revenue from 2010 to 2014 and 10 percent of profit and 27 percent of fuel sales revenue from 2015 to 2035.

But in 2012, following political pressure and a court ruling that invalidated the ADC, the government unilaterally terminated the agreement, triggering an international arbitration case and a large payout to GMR.

GMR’s Projected Payments to MACL

While signing the agreement, GMR projected the following concession fee payments over the 25 year period:

• 2015–2020: $87.05M/year
• 2020–2025: $108.01M/year
• 2025–2035: $128.7M/year

According to these projections, over the full 25-year period, MACL would have received $2.26 billion in total revenue. Additionally, GMR paid an initial $78 million concession fee in 2010.

What Actually Happened?

After GMR’s removal, MACL retained control and is now completing a new terminal on their own—with the grand opening set for 26th July 2025, on Maldives’ Independence Day.

To finance this project, successive governments and MACL took around $400 million in loans. As opposed to popular narrative, these loans were taken mainly from reputable Islamic financial institutions rather than China, namely from Kuwait Fund for Arab Economic Development, Saudi Fund for Development, OPEC Fund for International Development, and Abu Dhabi Fund for Development.

To understand how much money MACL would have made under the GMR agreement, I wanted to see how MACL had performed financially over the past 15 years, specifically how much net profit they had made annually and the amount of fuel sales they had made per year. I was able to find the relevant data from different sources online, for the fiscal years 2016 through to 2024. Unfortunately, full data could not be found for 2010 to 2015.

Here’s how MACL performed financially from 2016 to 2024 (based on publicly available data):

MACL Revenue 2016-2024

• Total profit: $422.31 million
• Total fuel sales revenue: $1.74 billion

According to the GMR agreement, for these years, they would have paid MACL 10% of the profit and 27% of the fuel sales revenue. So, if GMR had remained, MACL would have instead received $512.58 million in concession fees over this period. That’s $90.27 million more than MACL actually made in the same period after kicking out GMR.

So does that mean it would have been better off with GMR? But hold on, we need to look at some gotchas.

The Arbitration Factor

You will notice that in the revenue table, MACL was profitable for all years except 2016. What was the result of this loss only in 2016? Well, in 2016, MACL was forced to pay $271 million to GMR as compensation for the unlawful contract termination. This resulted in a loss of $85.21 million that year.

If that payout hadn’t occurred, MACL would’ve made around $65 million profit in 2016 (estimated based on subsequent years), pushing the total 2016–2024 profit to $572.52 million without GMR.

So, comparing the two:

• With GMR: $512.58 million in revenue
• Without GMR (adjusted): $572.52 million
• Net gain for MACL: +$59.94 million

So without the GMR agreement, MACL would have likely made more money over the same period, getting to keep 100% of the profit to themselves.

But What About the $78M Upfront Fee?

In 2010, GMR paid $78 million upfront—while MACL had earned only $21.4 million in profit that year.

That gives GMR a $56.6 million edge in 2010. If you factor that into the equation, the net gain for MACL shrinks from $59.94M to just over $3 million. But this does not factor in the years that data is missing for. Even if we do factor in those years, MACL would have likely still made more money without GMR in those years. This is given the fact that reports show that GMR was paying around $25 million in annual concession fees for 2011. Given MACL’s revenue trends for 2016-2024 and profits of $21.4 million in 2010 and $27.4 million in 2011, they would’ve likely made more than $25 million in profits per year from 2010 to 2015. And given that from 2010 to 2014, GMR would’ve been paying lower concession fee rates, MACL would’ve made more profits in those years without GMR.

The ADC and Terminal Financing

GMR’s planned $400 million investment was to be funded through the $27 ADC. But after a local court struck down the ADC in 2012, GMR began deducting ADC amounts from their concession fees—leading to reduced payments to MACL. This resulted in MACL having to actually pay GMR money instead of the other way round! Furthermore, GMR had taken $160 million in loans to fund the developments, with sovereign guarantees given by the Maldivian government. By the time the agreement was terminated, GMR had claimed that they had completed 25% of the upgrade plans they had planned to finish by 2014. However, given the scale of the current new terminal and other airport upgrade works, I am skeptical that the works that GMR had planned would come anything close to the current level of development.

If MACL had been collecting the ADC themselves from 2010 onwards, they could have made $285–300 million in additional revenue over the past 15 years. Combined with the adjusted profit and avoided arbitration costs, this would have allowed MACL to finance the terminal themselves, without taking on so many loans.

Fuel Sales Revenue Share

A quirk of the GMR agreement was the high percentage of fuel revenue they had proposed to share with MACL. Note that this is a share of revenue and not profit. So because of the high revenue share percentage, GMR was incentivized to keep fuel prices high so as not to make a loss on their part. High fuel prices would mean less airlines will likely refuel at VIA. This was something that GMR’s competitor Turkish-French consortium TAV-ADPM had noted in 2010 when the agreement was initially signed. TAV-ADPM had in-fact proposed a more feasible (according to them) revenue share percentage of 16.5%.

TAV-ADPM’s predictions actually did become true, with fuel revenues dropping in 2012 due to Sri Lankan airlines opting out of refueling at VIA after GMR had raised fuel prices. Moreover, a 25% drop in seat capacity was observed from 2010 to 2012 from European destinations, that the Ministry of Tourism had attributed to the high fuel prices.

Summing It Up

With GMR:

• Concession revenue (2016–2024): $512.58 million

• Upfront concession (2010): $78 million

• ADC revenue (lost to GMR): ~$285–300 million

• GMR investment (funded by ADC): $400 million (offloaded from MACL)

• Lost operational control of the main airport to a foreign entity

Without GMR (Never signing the agreement):

• Adjusted profit (2016–2024): $572.52 million

• Full control of ADC: Potentially $300 million revenue

• Had to take a $400 million loan for terminal development

• Retains full control of the airport

Caveats

• Full data from 2010–2015 is not publicly available, so this analysis focuses mainly on 2016–2024 and some partial data from previous years.
• ADC projections are estimates and actual numbers could vary based on passenger volumes.
• I’ve done my best to base this on published reports, media sources, and official statements—but there may still be gaps.

Conclusion

With the new terminal finally opening this 26th July, the story of GMR and MACL feels like it’s come full circle, especially with Indian Prime Minister Modi invited to be a special guest at the festivities. The Maldivian government chose sovereignty and control over a long-term concession—and while that decision came with a hefty short-term price tag, MACL may have just barely come out ahead financially over the long run. Terminating the agreement had resulted in potential lost revenue to MACL in excess of $146 million including the initial concession fee and subsequent annual concession fees.

That said, if the GMR agreement had never been signed, MACL could have likely financed the terminal without taking so many loans, and with greater profit margins while making more profits than under the GMR agreement. Moreover, since GMR was ousted, apart from the new terminal itself, MACL had undertaken major new developments, including a new runway, new fuel farm and cargo facility, and a new seaplane terminal. It is questionable whether GMR would have undertaken all these developments as well.

While these developments might have been costly, the positive results of the investments have already started showing, with annual net profits of MACL growing to $71.3 million in 2024, up from $14.9 million in 2008 and $16.6 million in 2009. Given the relatively low profits that MACL was making at the time, the then government might have seen GMR’s offer very attractive, getting to develop the airport for “free” while still earning some concession fees. However, subsequent governments have been able to 4x the profits on our own within just 5 years of ousting GMR.

So did we really win?
From the data that I was able to see, I think financially it was a narrow win over the long term. More data and expert analysis is needed to give a more definitive answer.

But perhaps the bigger lesson here is not about whether GMR stayed or left—but about how we manage national assets, contracts, and long-term strategy in a way that avoids unnecessary conflict and maximizes public benefit. We need leaders with vision who prioritizes national interest and long term strategy over making quick bucks. If we had never signed the agreement in the first place, we’d be in a much better position today.

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Found this analysis useful? Think I got something wrong? Feel free to share, critique, or improve it. Let’s keep the conversation going—with facts.