GMR hopeful of settling row over Maldives airport
Dec 05 2012 , New Delhi
“We expect government of Maldives to respect international law and hope to reach an amicable solution to the problem. We also appeal to the Maldives government not to use any force as it will impact international investment climate and would be seen as harming Indian interest significantly,” GMR Airports, CFO, Sidharath Kapur said.
This optimism is despite the fact that the government of Maldives has not yet agreed to meet GMR officials on the issue. “Our repeated attempts to get in touch with the Maldivian President are yet to elicit any response,” Kapur said.
Maldives has refused to abide by a Singapore court decision that stayed the termination of GMR contract, and has said it will go ahead with its decision to takeover the airport by Friday.
GMR, on its part, has so far refused to take Maldives' bait of compensation for the cancellation, which according to some estimate stands at $700 million, saying it was in the nation for operating the airport and not for compensation.
Based on the directions of the new Maldivian government, Maldivian Airport Company Limited (MACL) had on November 27 terminated the contract given to GMR in 2010 during the previous regime of President Nasheed. The concession agreement between MACL and GMR Infra was signed in June 2010 and it specifically provided for the developer charging $25 fee per departing international passenger from January 2012 and a further $2 as insurance surcharge over the airport service charge.
But a Civil Court did not allow GMR to levy these charges, leading to a situation where the airport developer was forced to adjust the revenue share amount with the Maldives’ airport operator. This eventually led to Maldives having to pay money to GMR instead of the other way round, prompting the Government to cancel the entire airport concession agreement.
GMR Male International Airport (GMIAL) is a joint venture company comprising GMR Infrastructure Limited (GIL) (77 percent) and Malaysia Airports Holding Berhad (MAHB) (23 percent). In 2010, GMIAL won the right to build and operate the Ibrahim Nasir International Airport (INIA) for 25 years, which is extendable for 10 more years.