MACL rolls out string of austerity measures to help govt cut costs

The Maldives Airports Company Limited (MACL), which runs the Velana International Airport (VIA), has rolled out a string of austerity measures designed to cut the overall expenses of the state.

The measures were announced in a press briefing held at the VIA on Sunday morning.

Ahmed Shareef, the company’s managing director, told reporters that MACL will roll out 10 key measures.

This includes cutting spending on fuel, utility services, consumables, transport, administrative expenses, bank charges, inventory expenses, as well as spending on events and functions.

Speaking further, Shareef said the gensets currently used by the MACL are not in the best state, and was increasing spending on diesel.

He said that the company was running a power upgrade project, which will be complete within the next 15 days. He said the company will begin using new gensets then.

‘Once we begin using this, our spending on power generation will be cut by at least 20 percent,” he said.

Shareef said that MACL employees over 4,000 individuals, and therefore spends heavily on paper. He said the company aims to become completely paperless within the next one year.

Shareef said that MACL plans on negotiating with the banks it deals with in order to lower bank charges.

The company also plans on holding trainings online, and to cap spending on events at MVR 100,000.

Shareef provided assurance that MACL will not implement mass layoffs or pay cuts in the name of cutting costs. He also provided assurance the measures will not delay work on VIA’s new passenger terminal or disrupt any of the company’s services.

“This will not affect the opening of the new terminal. The financing and everything for the terminal is already arranged. As I said before, the cost cutting measures will not obstruct, slowdown or halt any efforts to enhance MACL’s services,” he said.

Shareef said he is unable to say for certain by how much the cost cutting measures rolled out on Sunday will reduce the company’s expenses.

“Expect that it will cut down overall expenses by 10-20 percent,” he said.

President Dr. Mohamed Muizzu had announced the roll out of measures last week to cut the state’s recurrent expenditure, including reducing the number of political appointees, and reducing the spending on or cancelling official events.

One upcoming event the president has decided to cancel is the Independence Day reception and parade.

Also last week, Erdem Atas, the World Bank Country Economist and Resident Coordinator for Maldives, said that the economic vulnerabilities that the Maldives now faces is a combination of debt stock accumulation in the last 10 years, as well as continuously high fiscal and current account deficits over the same period.

He said that economic growth or additional financing cannot resolve the issue, and that expenditure cuts are necessary to reduce fiscal and current account deficits, which will primarily support central bank’s reserves, and help improve the debt situation in the medium-term.

He also expressed appreciation for the government’s efforts on fiscal reforms.