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Scrapping GMR contract will affect ties, India tells Maldives

Posted on Nov 29, 09:58PM | IANS

Upset at the Maldives government's decision to scrap an airport management contract with an Indian firm, India Thursday said it will "inevitably affect bilateral ties" and expressed apprehensions at the way the issue has become "a platform for anti-India elements" in the archipelago nation.

India has also asked the Maldives government to ensure the security of around 30,000 Indian nationals living there.

India's external affairs ministry is carefully watching the evolving situation in the aftermath of the cancellation of the USD 500 million Male airport contract with the GMR group, the single largest Indian FDI in the Indian Ocean nation.

Official sources said that Indian wants legal process to be followed in resolving the commercial dispute and has made it clear to the Maldives government that the scrapping the contract is sending a negative message not only to Indian investors but also to international investors.

The Maldives government Wednesday defended its decision to terminate the GMR contract, saying the deal was dogged by "legal, technical and economic issues".

"The GMR is taking legal steps against the Maldivian government. The legal process should be played out," said the source to comments on the diplomatic fall-out of the controversial decision.

The GMR has termed the cancellation of the contract as unlawful and is planning to take legal action against the Maldivian government.

The project was awarded to the GMR group through an international tender advertised by the Maldives government under the tenure of the former president Mohamed Nasheed, who was ousted in February 2012.

The sources added that while it was a commercial dispute, it has become distressing to see how some fringe elements and political parties in the Maldives have been using the GMR contract to whip up anti-India sentiments.

There are many interests at work, said the sources, indicating that the external affairs ministry was closely looking at reports that suggest that a pro-China lobby in the Maldives was behind the cancellation of the contract.

"It has become an election issue and it has ceased to be a purely commercial matter," said a source.

The elections are scheduled to be held in the Maldives late next year, but there are indications that these could be held early next year.