A proposal from the Philippines-based International Container Terminal Services Inc (ICTSI) was sent in a letter to President Dr. Mohamed Muizzu a week before an MoU was signed to hand over the country’s main commercial harbour operated by the Maldives Ports Limited (MPL) to the company, Adhadhu has learned.
The MoU was signed with ICTSI on March 28 with MPL obliged to pay USD 5 million or MVR 77 million if the agreement is terminated or the project is not commenced.
A week before that, a letter addressed to President Muizzu and signed by Gerard Langes, the company’s head of business development for the Asia-Pacific region and the Philippines, was sent on March 21. The letter mainly included ICTSI’s conditions for the development and operation of the port.
Adhadhu asked the President’s Office whether such an MoU was signed and why MPL agreed to pay USD 5 million if a deal to hand over the port could not be reached.
However, Heena Waleed, the government’s spokesperson, has not responded as of the time of publication.
Letter sent to President on March 21. — Photo: Adhadhu
What was in the letter?
The letter first extended Ramadan greetings to the President on behalf of ICTSI Chairman Enrique Razon. It went on to make the company's proposal after referring to a presentation made to Minister Shahid. ICTSI included five points below that.
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ICTSI's letter to the President stated that the Maldivian government would retain ownership of the port. The company would take over the development and management of the port for 25 years with the option for a further 25-year extension.
The company proposed fully funding the development at an estimated cost between USD 150 to 300 million. A new terminal with the capacity for 300,000 containers would be built in the first phase.
In addition, the company proposed providing technical expertise for port operations, training Maldivians, and paying an annual concession fee equal to a certain percentage of revenue.
Moreover, the development of a re-export zone in Thilafushi under the Special Economic Zones (SEZ) Act was also proposed. ICTSI informed the President that the company was prepared to finance the redevelopment of the existing port in Male' as a commercial harbour and yacht marina after the relocation of container terminal operations to Thilafushi.
The company would also consider investing in the Maldives Economic Gateway Project planned in Ihavandhippolhu by the current government, ICTSI told the President.
The fifth point proposed entering an MoU with the government to provide a three-month exclusivity period to further look into the development of the port. This MoU was signed in April.
Notably, the conditions in the letter sent to the President were included as provisions in the MoU that the company signed with MPL.
As ICTSI does not operate any container terminals in the Indian sub-continent, the company said it "looks forward to this port in the Maldives as being our flagship in the region."
ICTSI's financial statements have been shown to Minister Shahid to demonstrate the company's financial capability to carry out such a project, the letter stated. Copies of letters of support from global financial institutions that assured credit facilities for the project were also sent to Shahid, the company said.
The letter expressed hope that the government would enter into a concession agreement with the company to carry out the project.
