Business

Maldives scraps GMR-MAHB contract

November 28, 2012

NEW DELHI, Nov 28 ― The Maldivian government has decided to terminate the concession agreement on an airport project between the  GMR-Malaysia Airports Holdings Bhd consortium, Maldives Airports Co Ltd and the government.

GMR is a Bangalore-based global infrastructure major with interests in airports, energy, highways and urban infrastructure.

Indian media reported that the Maldives decided to terminate the contract based on a paper presented by the Attorney General’s office prepared after  “thorough research done for the past nine months by a cabinet committee”.

GMR-MAHB has been operating the Male International Airport since November 2010. GMR has a 77 per cent stake in the operation, with MAHB holding a 23 per cent share. The concession agreement was for 25 years.

The move on the project near the capital Male evoked strong reactions from  India, which said it would send “a very negative signal” to foreign investors, Press Trust of India reported.

India’s external affairs minister Salman Khurshid said, “Whatever legal decision is taken (by Maldives) will have repercussions here.”

GMR said, “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 US$500 million contract to operate the Ibrahim Nasir International Airport on Hulhulé Island near Malé was signed on June 28, 2010 by then president Mohamed Nasheed’s government.

The project had been hanging in balance ever since the regime changed eight months ago.

The GMR contract “represents the single largest Foreign Direct Investment in the history of Maldives,” the Indian foreign ministry said, adding that the consortium, consisting of GMR and MAHB, had been awarded the contract through a global tender conducted by International Financial Cooperation. ― Bernama

 

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