MALE: GMR Infrastructure today questioned the Maldives government’s decision to scrap the USD 500 million airport contract despite a stay granted by the Singapore High Court in the presence of the island nation’s legal counsel.
It vowed to take forward the legal battle in this regard.
Reacting to the Maldives government’s stand that its decision of termination of Male airport contract to GMR-led consortium was “non-reversible and non-negotiable”, CEO of GMR Male International Airport Andrew Harrison said sovereign guarantee was provided in the agreement and should be “respected”.
Notwithstanding a stay granted by Singapore High Court, Maldives government said the termination notice stood and it will pay compensation to the GMR Group.
The details of the compensation proposed by Maldives were not immediately available.
Harrison, in a television interview, also said: “The same concession agreement should be respected” and that the Maldives government was a guarantor to it.
He said the stay was granted by the Singapore High Court and “the (Maldives) Attorney General was present in the proceedings.”
“We would fight for our rights all the way to Court,” Harrison said, adding the company would take all the steps “legally”.
Harrison, in the interview, also denied receiving any communication from the government in this regard.
“We have had no direct communication from the government … We expect any other communication would come to us directly,” he said.
Earlier hours after the Singapore High Court granted a stay on Maldives government decision to terminate Male airport contract given to GMR, Maldives said the decision was “non-reversible.”
Maldives President Mohamed Waheed’s press secretary Masood Imad said, “The government’s decision is very clear. It is non-reversible and non-negotiable. Our decision was based on legal advice we got from our lawyers in UK and Singapore.”
“We have asked MACL (Maldivian Airport Company Limited) to go ahead with the takeover process that would be done later this week,” he said, adding, “We believe the judge was incorrect in interpreting the law.”
“Where compensation is adequate, an injunction cannot be issued. A court cannot issue such an injunction against a sovereign state,” he said.
He also added that Maldives had initiated the arbitration process and “GMR will be compensated”.
MACL, on the directions of the new Maldivian government, had on November 27 terminated the contract given to GMR in 2010 during the previous regime of President Mohamed Nasheed.
Maldivian President Mohamed Waheed had said the contract was invalid and was signed under “dubious” conditions by the Nasheed regime.
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GMR USD 500 mn Maldives airport proj stayed
SINGAPORE: In a reprieve to Indian infrastructure major GMR, the Singapore High Court on Monday stayed the Maldives Government’s decision to terminate the USD 500 million contract awarded to a consortium led by it for modernizing the Male international airport.
The move is likely to pave way for the GMR to continue operations at Ibrahim Nasir International Airport (INIA) in Maldives.
“GMR Male International Airport Pvt Ltd (GMIAL) is pleased to advise that the High Court of Singapore has today granted injunctive relief against the applicability and operations of Letter dated November, 27 issued by the Ministry of Finance & Treasury (MoFT), Government of Male,” GMR Infrastructure said in a statement here.
As per the contract in the project, in case of differences between various parties, the law of either Singapore or UK would apply.
The statement said the High Court upon hearing both the parties granted the stay in favor of GMIAL, a joint venture company in which GMR Infrastructure (GIL) has 77 per cent stake and Malaysia Airports Holding Berhad (MAHB) the remaining 23 per cent stake.
“Both Maldivian Airport Company Limited (MACL) and MoFT, pursuant to the notice issued on 27th Nov 2012 either directly or indirectly, are not allowed to interfere with the rights of the Investor (GMR-MAHB consortium) under the concession agreement,” the statement said.
With this, GMIAL shall continue to operate the INIA airport as usual as per the provisions of the Concession Agreement, it added.
The MACL, based on the directions of the new Maldivian government, had on November 27 terminated the contract given to GMR in 2010 during the previous regime of President Mohamed Nasheed.
Maldivian President Mohamed Waheed had said the contract was invalid and was signed under “dubious” conditions by the Nasheed regime.
GMIAL had won the bid to build and operate the INIA airport for 25 years, which was extendable by another 10 years, post a successfully run International competitive bidding conducted by IFC, an arm of the World Bank in a most transparent and open manner, the statement said.
The company’s plan envisages developing a 0.6 million sq feet integrated world class passenger terminal and increasing the terminal capacity to handle 5.5 million passengers per annum.
It includes a 20,000 square feet VIP terminal, apart from landside development and improving existing terminal.
The airport is situated at the Maldivian Hulhule Island at the South western tip of India.
India, which had reacted sharply to the termination, had in a high-level meeting reviewed overall relationship with Maldives.
The Cabinet Committee on Security, chaired by Prime Minister Manmohan Singh, took into account the developments surrounding cancellation of the contract and its possible wider consequences.
India had termed the termination decision a “very negative signal” to foreign investors. -PTI
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