Logistics

Airport contract: GMR seeks $1.4-b compensation from Maldives

PTI Singapore | Updated on March 12, 2018

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Infrastructure major GMR has sought a compensation of $1.4 billion from Maldives for the “wrongful termination” of its 25-year contract to develop and operate the Male International Airport.

The claim was filed today before an Arbitration Court here and a final order is likely to come out by the end of March next year.

According to sources, the papers for the claim run into 75 pages besides various annexures and attachments.

The claim amount of $1.4 billion was reached after taking into account loss of profit, payments made to sub-contractors, besides others.

The sources said the arbitration process will go on and the Maldivian Government along with Maldivian Airport Company Ltd, both parties in the suit, will give their responses.

Airport contract

The over $500-million airport project contract, awarded to GMR during the previous regime of Mohamed Nasheed in 2010 for modernising and operating the Ibrahim Nasir International Airport (INIA), was “unilaterally” terminated by the current government on November 27 last year.

The airport was taken over by Maldives Airports Company after a high-voltage legal tussle in which GMR had initially got a stay order on the termination from the Singapore High Court.

However, the Singapore Supreme Court ruled on November 6, a day before the notice period expired, that Maldives has the power to take over the airport on November 6.

Termination of contract

The abrupt termination of the contract had raised tempers between India and Maldives which had till then said that it will go for an amicable solution to the airport issue.

Various political parties, all coalition members of the current regime headed by President Mohamed Waheed, had carried out a series of protests and campaigns against the Indian company.

The Maldivian Government’s stand was that the contract was terminated because it was “void ab initio“” (invalid from the outset) and hence the Government does not have to bear any compensation for the termination.

Earlier this week, Maldives’ anti-graft watchdog had ruled out any corruption in the leasing of the international airport to GMR.

However, the Government had said, “The report does not change the Government stand that the contract given by former President Mohamed Nasheed was illegal.

“The contract was not terminated on the ground that there was corruption but because it was done against the law of the land.’’

Published on June 21, 2013

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