The Maldives government on Tuesday scrapped GMR Group’s airport project near capital Male, evoking strong reactions from the India, which said the move would send “a very negative signal” to foreign investors.
India’s external affairs minister Salman Khurshid even 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 Rs. 2,700-crore contract to operate the Ibrahim Nasir International Airport at Hulhulé Island near Malé was signed on June 28, 2010 by then president Mohamed Nasheed’s government.
The trouble began after a civil court in Maldives ruled that GMR cannot charge $27 (Rs. 1,458) from passengers as airport development charge and insurance surcharge, the Indian infrastructure giant had taken the case to Singapore for arbitration. GMR has been charging the amount from each passenger since January.
The project had been hanging in balance ever since the regime changed eight months ago. Some coalition partners of the current regime, headed by President Mohamed Waheed, held a rally against GMR on November 3.
The GMR contract “represents the single largest FDI in the history of Maldives,” the Indian foreign ministry said, adding that the consortium, consisting of GMR and MAHB (Malaysian Airport Authority), had been awarded the contract through a global tender conducted by IFC.