India Seeks Compensation
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.