The Maldives score a self-goal
Football is a very popular sport in the Maldives and the citizens are aware that the goal has to be scored against the opponent. The government, however, seems to be unaware of this fundamental point of the game. The arbitrary termination of the US USD 500m GMR contract to develop the Male International Airport is testimony to the government inflicting a goal on itself, just when the game was in a win-win situation for the Maldives.
Tourism is the life-blood that keeps the Maldivian economy afloat and tourism needs infrastructure, especially a world-class airport to begin with. This is exactly what the President Nasheed government sought to do when it embarked on an ambitious project to develop the Male Airport. Given the huge investment required, it opted for private investment. To ensure transparency, it engaged the International Financial Corporation (IFC), an arm of the World Bank to manage the bid process. Additionally, several internationally reputed consulting firms were engaged to handle different aspects of the bid like accounting, technical and legal.
Six consortiums consisting of ten internationally famous airport operators participated in the 10 month long bid process. Three of these were found to be legally and technically compliant with the specifications tendered for. Of these, GMR-MAHB's financial bid was found to be the highest and most beneficial to the Maldives and so they were awarded the contract. Incidentally, together GMR-MAHB operate more than two dozen international and domestic airports.
Given the open, transparent and internationally acclaimed bidding process how does one explain its termination within two years?
The reason for the termination is political and not economic or financial.
Following the controversial transfer of power in February 2010, Vice President Waheed became the President. Devoid of any political standing or support either in the Majlis or outside, Waheed is totally dependent on former President Gayoom for survival.
Gayoom, who led Maldives for the better part of 30 years, has one overriding ambition left- to demolish Nasheed and avenge his own stunning defeat at the hands of Nasheed in the Presidential polls of 2008. To achieve this, he is using Waheed to point score against Nasheed. GMR and the Male airport have become a pawn or rather a football in his campaign. Gayoom thinks by terminating the contract he can hit at Nasheed. In the process, he is leading Maldives down a slippery slope.
As provided for in the contract, GMR had filed an arbitration case in Singapore on the issue of Airport Development Charges (ADC). Even though the case is being heard, Waheed's government has used the very issue of the ADC to terminate the contract. Even the Maldivian Supreme Court had to admonish the government for terminating the contract when a reference on the contract made by the government itself was pending before it. GMR has now filed another case in Singapore against the termination and an order is expected early next week. It is being hotly debated in the Maldives and elsewhere if the government will accept this order or risk becoming an international pariah by rejecting it.
While Gayoom has been using Waheed as his catspaw to implement decisions against Nasheed, he has been using the fundamentalist Islamic Adalaath Party to launch street protests against GMR and the Indian High Commissioner to boot. In these street protests, religious fervour has morphed with anti-Nasheed and anti-India sentiments on the one hand and with xenophobia on the other. Slogans like Male airport for the Maldivians have been popular with the protestors.
To compound the self-goal, Waheed has expressed the hope that this would not affect bilateral relations with India. Official and non-official statements emanating from India should have very quickly put paid to any such ambitious hopes that Waheed and Gayoom might have been harbouring of India offering the other cheek in this case.
However, what should be worrying for India is Waheed trying to forcibly evict GMR from the airport. There are visible signs of greater police deployment at Male airport in the last couple of days. Should any official rough arm tactics or street violence be directed against GMR employees, whether Indian or Maldivian, India would be left with few options.
Having an international contract cancelled to settle political scores by Gayoom by fanning flames of religious xenophobia is the worst example of a self-goal that a government can inflict on its own people.
The message to Indian and international investors is clear- stay away from the Maldives because even international contracts with sovereign guarantees are not safe under the watch of the Gayoom-backed and extremist-supported Waheed government. The impact that this will have on tourism, the life-line of the Maldives, can well be imagined.
The views expressed in the above article are that of Mr. Salim Haq.