PremiumThe $500 mn project had been hanging in the balance ever since the regime change earlier this year
New Delhi/Male: The Maldives on Tuesday said its cabinet has recommended termination of a contract given to the GMR Group for developing the Male airport, a project awarded to the Indian group during the island nation’s previous regime.
The Maldives government has issued a notice to the GMR Group on the decision, the Maldivian president’s press secretary Masood Imad said in a statement.
GMR called the decision “irrational" since an arbitration was already under way in Singapore and said it would take legal recourse to the move.
The Indian government reacted strongly. “The investment by GMR represents the single largest foreign direct investment in the history of the Maldives. The decision to terminate the contract sends a very negative signal to foreign investors and the international community," India’s foreign ministry said in a statement posted on its website.
The $500 million project had been hanging in the balance ever since a regime change in the Maldives earlier this year. The GMR Group had won the contract during the regime of former president Mohamed Nasheed.
Some coalition partners of the current regime headed by Mohamed Waheed had held a rally against GMR on 3 November. The airport contract was awarded to GMR through a 10-month-long global competitive bidding process run by the then Maldivian government headed by Nasheed. Nearly eight months after the regime change in Maldives, some Indian companies present there, including GMR, are blaming political interference for creating “undue challenges" for them.
“The government of India would continue to remain engaged with the government of Maldives on this issue...," India’s foreign ministry said in the statement. “We call upon the government of Maldives and all concerned parties to ensure that Indian interests in the Maldives and security of Indians are fully protected."
“In a unilateral and completely irrational move, the government of Maldives has today issued a notice to the GMR Male International Airport (Pvt.) Ltd intending to take over the possession and control of the Ibrahim Nasir International Airport under the pretext that the agreement is void," GMR said in its statement. “This unlawful and premature notice on the pretext that the concession agreement (CA) is ‘void’ is completely devoid of any locus standi and is therefore being challenged by the company before the competent forums. The company disputes that the CA is ‘void’."
GMR said it had taken all measures to continue operations at Male airport, ensuring that this gateway to the Maldives was kept open. “We are confident that the stand of the company will be vindicated in every way," the group said in its statement.
Mint’s Tarun Shukla and Elizabeth Roche contributed to this story.
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