GMIAL asks Maldives to honour contract
The GMR-backed consortium GMIAL whose contract for managing the Male airport was cancelled last week, Wednesday asked the Maldives government to honour the concession agreement.
"We expect and appeal to Maldives government to honour international law," Sidharth Kapur, chief financial officer (airports), GMR Group told reporters here adding that the company is hopeful of an "amicable solution".
The company also asked the Maldivian government to take cognisance of the recent order by Singapore High Court, which is acting as an arbitrator in the issue, stayed the decision to terminate the USD 500 million contract awarded to GMIAL.
Kapur further said that the company has not accepted any compensation for the cancellation of the contract and that any legal recourse will may put significant and avoidable financial burden on the island nation.
Kapur added that the consortium would have paid a contracted revenue of about USD 2.5 billion to Maldives government over the concession period for operating as well as development of the Male airport.
The company added that it cannot increase any of the revenue payable to the Maldives government as the country's civil court scrapped the airport development fee (ADF) of USD 25 charge on each departing international passenger for development of the airport and USD 2 for insurance surcharge.
The collection of ADF was part of the concession agreement based on which the USD 2.5 billion revenue share with the government was quoted.
The government would also have been able to collect USD 1 billion in taxes and royalties.
The company refuted charges of corruptions levelled by the Maldives government and said that it emerged successful amongst the six parties shortlisted in the Male' Airport privatisation bid process managed by IFC, an arm of World Bank.
The project was awarded to the GMR Group under the tenure of former president Mohamed Nasheed, who was ousted in February 2012.
The present government has decided not to honour that contract and Defence Minister and Acting Transport Minister Mohamed Nazim told Andrew Harrison, chief executive of GMIAL, during a meeting in Male Tuesday that MACL (Maldives Airport Company) would operate the airport from Saturday morning.
The GMR Group had termed the cancellation of the contract as unlawful and is planning to take legal action against the Maldives government for scrapping its investment of more than USD 500 million in the project.
Several Indian banks like Axis Bank, Indian Overseas Bank and Indian Bank have contributed about USD 368 million to the project. This is also the single largest Indian foreign direct investment in the Maldives.
The Maldivian cabinet has also asked GMIAL to vacate and remove all property from the airport within 30 days.