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Maldives again threatens to cancel GMR' Male airport contract

Last Updated: Friday, September 28, 2012 - 21:59

Mumbai: The Maldivian government Friday renewed its threat to call off the bid awarded to the GMR Group to develop an airport in its capital Male.

"I don't rule out the possibility of cancelling the award given to the GMR Group to run the Ibrahim Nasir international airport. The court may decide the penalty on the company," visiting Maldivian deputy tourism minister Mohamed Malleh Jamal told reporters here this evening.

The renewed threat comes within a week of the Maldivian president Mohamed Waheed making a similar statement.

The minister further said the Maldives Airport Company is ready to start work in the eventuality of the USD 300-million GMR contract, making it the biggest ever FDI into the Indian Ocean nation, being cancelled.

The GMR Group-GMR-Malaysia Airports combine had won the contract to build and expand the Male airport for about USD300 million on June 25, 2010, defeating bids from the Anil Ambani group-led Mexico Airports Aeropuertos consortium and the GVK-Lughafen Zurich AG combine.

The contract, which also includes a sea-plane port, involves GMR Group completing the project by 2014 and entails operation, maintenance, expansion, rehabilitation and modernisation of the existing airport for over 25 years.

The Male international airport contract is the second airport that GMR has taken up in the Maldives with the other being an agreement to modernise and operate the Hanimaadhoo airport, in the northern islands.

The genesis of the trouble for the Hyderabad-based GMR Group, which also runs New Delhi, Hyderabad and Istanbul airports, started with change of political guard in the Maldives when Mohamed Waheed unseated the then president Mohamed Nasheed in a coup this February.

The Opposition parties during Nasheed's government had challenged the privatisation process and threatened to re-nationalise the airport should it come to power.

An Opposition party also moved court to challenge the GMR decision to charge USD 25 as airport development fee on outgoing passengers, as stipulated in the concession agreement.

The Waheed government restarted the nationalisation rhetoric after assuming power, and asked GMR to temporarily halt the development of a new terminal at the Ibrahim Nasir international airport.


First Published: Friday, September 28, 2012 - 21:59
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