GMR explores legal options against Maldives govt

New Delhi: GMR Infrastructure is exploring legal options against Maldives Government for terminating its $500-million airport development contract for running the Male airport.

“We are seeking legal opinion (against the termination notice) and we will formalise our strategy shortly,” a GMR spokesperson said, adding that operations at the Male airport are functioning “normally”.

[caption id=“attachment_540183” align=“alignleft” width=“380”]  It had also asked GMR to vacate and remove all property from the airport within 30 days. Reuters[/caption]

Meanwhile, Maldives has denied a report from local Sun Online that work permits and visas of GMR officials working in Maldives will be cancelled within seven days.

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Maldivian President’s Press Secretary Masood Imad said that GMR has been given more time than what is stipulated in the contract. Visas to GMR officials will continue as per the normal procedures, he added.

“As per the contract, either party could terminate contract giving 5 days notice but we have given them 7 days to hand over the project. They have been given more time to remove their equipments after handing over the airport to MACL. The visas will continue to stand as per normal procedures,” he said.

The Maldivian Cabinet on Tuesday decided to terminate GMR’s contract for developing Male Airport and issued it a notice to hand over the airport within 7 days to state-owned Maldives Airports Company Ltd.

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It had also asked GMR to vacate and remove all property from the airport within 30 days. GMR group, through a consortium with Malaysia Airports Holdings Berhad (MAHB), had won the $500 million contract on June 24, 2010 through a global competitive bidding process to upgrade and manage the Male airport for 25 years.

The contract, termed as single largest foreign direct investment in Maldives, was awarded by the then Maldivian government headed by Mohamed Nasheed. However, the project was hanging in balance ever since the regime change in Maldives earlier this year as some local political parties, who are now in power, were opposed to GMR levying a $25 per passenger Airport Development Charge (ADC).

The issue of charging ADC is currently pending in an arbitration court in Singapore. Termination of GMR’s contract had also evoked sharp reactions from government of India which said on Tuesday that it sends a “very negative signal” to foreign investors.

“The decision to terminate the contract with GMR without due consultation with the company or efforts at arbitration provided for under the agreement sends a very negative signal to foreign investors and the international community”, a spokesperson of Ministry of External Affairs had said.

PTI