GMR Airports has said it would go head with a levy on air development fees in Male, Maldives, next year. GMR plans to levy an airport development fee of $25 beginning January 2012 on incoming tourist traffic.

The proposal has led to protests from the Maldives Association of Travel Agents and Tourist Operators and reported widely in the local media. A GMR spokesperson said: “The airport development fee is a charge approved by the government of the Maldives. As operators we implement the same in due course of time.”

GMR Airports and Malaysian Airports Holdings Berhad are jointly developing the Male airport with a concession for 25 years. The airport development is being dong through a special purpose vehicle, Ibrahim Nasir National Airport. Approximately 900 million tourists visit the island each year according to the Tourism Yearbook published by the Maldives government.

GMR is developing the airport at a total cost of $511 million with a debt component of $358 million that was arranged by the Singapore branch of Axis Bank. Repayment on the debt is expected to begin in 2015. ADF is part of the cost recovery on the investments by the joint venture partners.

ADF is already being levied by privately operated airports in India.

GMR already levies ADF for operating the Delhi and the Hyderabad airports where it is the operator. Besides, Male, GMR is also the operator for the Istanbul airport in Turkey developed at a cost $451 million. Istanbul was the first international airport project for the group.

Airports contributed about Rs 2,400 crore to the group in the last financial year. In the second quarter of this financial year however, GMR incurred a cash loss of Rs 42 crore, on account of large capital expenditure incurred and partly on account of the delayed revision in the ADF by the government for Delhi International Airport.