Maldives' state-run MACL on Friday night took over the operations of the Male international airport from GMR after the Indian infrastructure major lost a week-long legal battle over the "unilateral" termination of its $511 million airport modernisation contract.
"Maldives Airport Company Limited has taken over the operations of the Ibrahim Nassir International Airport from GMR. The transfer process was very smooth and seamless," President Mohamed Waheed's press secretary Masood Imad said.
He said that there would be three-week transition period during which GMR and state-run MACL will work together.
"GMR has agreed to work with MACL for the next three weeks or so to help MACL with paperworks and to clear any doubts since the Indian firm was operating the airport for last two years," Imad said.
He sought to allay any fears of loss of jobs or any vendetta.
"All workers of the airport who wish to stay back after GMR leaves will be taken on board by MACL. This also includes Indian workers," Imad asserted.
Terminating the $511 million contract with GMR on November 27, Maldivian government had given time till tonight to the Bangalore-based firm to handover the airport operations.
The handover took place a day after the Singapore Supreme Court ruled that Maldives government has the "power to do what its wants including expropriating the airport", dealing a severe blow to GMR which had earlier got a temporary reprieve with the Singapore High Court staying the termination.
The contentious issue saw various twists and turns both on legal and diplomatic fronts with India expressing its strong displeasure over the "unilateral" decision of termination and had conveyed that the move will have an adverse impact on the bilateral ties.
Top GMR officials including Kiran Kumar Grandhi, business chairman – Urban Infra & Highways, who is also GMR chairman GM Rao's son had met with Maldives President earlier in the day.
Maldives officials sought to assure airlines and tourists saying "everything is normal. There is no need for any worry".
Meanwhile the GMR said in a statement that "GMR Maldives Internal Airport Limited (GMIAL) has been assured that as a result of this takeover, all its employees, suppliers and other interested parties will not be put to any inconvenience.
"GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010," the company statement said.
It added, "All actions as above (including handing over) are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up".
In 2010, GMR-led consortium won the right to build and operate the Ibrahim Nasir International Airport for 25 years, which is extendable by another 10 years.
The deal was signed during the regime of previous government headed by Mohamed Nasheed.
But after the regime change in February, GMR had been facing an uphill task.
The current government in Male headed by President Mohamed Waheed says the contract was signed under "dubious" conditions and was "void", a charge hotly denied by the Indian firm.
The Male airport venture has been the most profitable for GMR in terms of its airports business segment. The company had so far invested about $250 million on managing and upgrading the facilities at the Male airport.
The bone of contention between GMR and Maldivian government is levy of an Airport Development Charge (ADC) of $25 per passenger and $2 per passenger insurance surcharge.
The levy was supposed to be charged from January 1 this year but a local civil court had struck down the proposal in December last year.
After that, the then government headed by Nasheed agreed to compensate GMR against the levy.
However, the decision was reversed by the new regime early this year, leading to GMR filing for arbitration in a Singapore court.