In­dia Seeks Com­pen­sa­tion

Southasia - - BRIEFING -

In­dian in­fra­struc­ture gi­ant GMR has sought a com­pen­sa­tion of $1.4 bil­lion from Mal­dives for the wrong­ful ter­mi­na­tion of its 25-year con­tract to de­velop and op­er­ate the Male In­ter­na­tional Air­port.

GMR pre­sented Mal­dives with the $1.4 bil­lion fig­ure af­ter tak­ing into ac­count loss of profit and pay­ments made to sub­con­trac­tors and the govern­ment of Mal­dives. Sources claim that the ar­bi­tra­tion process will con­tinue as the In­dian govern­ment is await­ing re­sponse from the govern­ment and the Mal­di­vian Air­port Com­pany Limited.

Mal­dives awarded the $500 mil­lion pro­ject to GMR for mod­ern­iz­ing and op­er­at­ing the Ibrahim Nasir In­ter­na­tional Air­port in 2010 dur­ing the pre­vi­ous regime of Mo­hamed Nasheed. How­ever, the Mal­di­vian govern­ment of Pres­i­dent Mo­ham­mad Wa­heed Has­san uni­lat­er­ally ter­mi­nated the pro­ject in Novem­ber 2012.

Fol­low­ing the ter­mi­na­tion, the Mal­dives Air­ports Com­pany Limited took over op­er­a­tions of the air­port while the GMR got a stay or­der. How­ever, the court ruled in favour of the Mal­dives that it has the power to take over the air­port.

The abrupt ces­sa­tion of the con­tract es­ca­lated ten­sions be­tween In­dia and Mal­dives af­fect­ing their trade ties and for­eign re­la­tions. Mal­di­vian Pres­i­dent Mo­ham­mad Wa­heed stated that since for­mer Pres­i­dent Mo­ham­mad Nasheed signed the con­tract and re­signed from power in Fe­bru­ary 2012, there­fore, the con­tract is void ab ini­tio or in­valid from the out­set. Hence, the cur­rent govern­ment does not have to bear any com­pen­sa­tion for the ter­mi­na­tion.

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