The Republic of Maldives, with a population of 300,000, consists of about 1200 small, low-lying coral islands in the Indian Ocean, only 198 of which are inhabited. Most atolls are small, with a land area of less than one square kilometer, and many have fewer than 200 people. Tourism and commercial fisheries are the leading sectors of the economy. The Maldives’ extremely low population density is unique, even among small island archipelagic states.
The transport sector is dominated by maritime and air transportation. Male, the country's commercial and financial center, has a well developed sea port and international airport for passenger traffic.
Ports. The country also has some 90 manmade harbors, as well as several natural harbors and jetties to access the inhabited atolls. However, transportation facilities to most islands are inadequate.
Air transportation. The former military airport at Gan handles international freight transportation. There are also three regional airports in the southern part of the archipelago and one in the northern atolls, as well as a number of private airstrips.
Roads. Paved roads are few: some 60 km in Male, and 14 km each on the Laamu and Addu Atolls. Village roads are mainly of compacted coral.
With the population dispersed thinly across the islands, the cost of providing transportation, infrastructure, and social services to the people is high. This rises even more markedly on the outer atolls, severely limiting the range of economic activities available to these communities. Inter-island transportation services are infrequent, expensive, and problematic. About 15 percent of the atoll population has reportedly to travel more than two hours by boat to reach the nearest health center or hospital. More than half of the inhabited islands are not always accessible due to problems with harbors, absence of jetties, impassable shallow waters and impenetrable reefs. The island economy’s overwhelming dependence on tourism and fisheries as a source of economic activity dictate that both sea and air connectivity are critical to sustaining the economy. Both the seaport and airport in Male are in need of upgradation and capacity enhancement.
To consolidate the population and promote employment opportunities outside Male, the Government, with donor assistance, is developing two regional growth centers in the Haa Dhalu Atoll in the far North and the Addu Atoll in the far South of the country. These centers are to have airports and ports to provide better social and infrastructure services to the peopleand to bring tourism and other economic opportunities within the reach of the more isolated atolls. The Government is also implementing country-wide Comprehensive Transport Network (CTN), which comprises a series of ferry services on public-private partnership (PPP) basis. These CTNs are being conceptualized at a provincial level (one each for each of the seven provinces) and are expected to facilitate balanced regional development in the highly dispersed economy of Maldives. In view of the growing demands on the International Airport and the Male Port the Government is considering expansion and modernization of the facilities. Restructuring public sector enterprises along commercial lines (including through part-privatization) to free up critical and scarce fiscal resources is a key component of the new Government’s reform-oriented strategy and feeds in to the broader aim of poverty reduction. It has accordingly corporatized the Male Port operator with the intent of eventual divestment. A new state of the art port facility with enhanced capacity is proposed through Public-Private-Partnership to cater to the country’s exports and imports. Separately, the Government of Maldives is also embarking on the expansion of the International Airport through divestment of the existing public sector Airport Company.
The Bank's strategy in the Maldives aims to reduce regional disparities in access to social and infrastructure services. In the past, the International Development Association (IDA) has supported the development of tourism by helping to upgrade Male’s international airport. The Male Airport Upgrading Project for US$7.5 million, which closed in 1994, addressed a critical infrastructure bottleneck by providing for the rehabilitation and upgrading of the airport's facilities and for building the Airport Authority's management capability through technical assistance and training.
The World Bank/ PPIAF provided technical assistance support to the Government of Maldives on the subject of expansion of the Male Port. Specifically, the assistance focused on (a) a location analysis for the new Male Port; and (b) PPP options for building the new port and the requisite legal and institutional framework for enabling PPP’s in the port sector.
International Finance Corporation (IFC) is advising the Government of Maldives on expansion and modernization of the tourism-dependent economy’s primary international airport at Male through PPP. IFC’s advice has been sought to help the Maldives Airport Company Limited (MACL) attract private investors, structure the privatized entity, develop a tariff framework and an appropriate investment plan. A fair, transparent and competitive bid process is expected to improve company management, its governance structure, service delivery and enable the establishment of a world-class critical infrastructure asset for this island nation. The divestiture of MACL is envisioned as a flagship deal for the privatization agenda of the Government.