The Telegraph
Tuesday , December 4 , 2012
Since 1st March, 1999
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Male airport tussle heightens

New Delhi, Dec. 3: The Singapore high court today stayed Maldives’s decision to terminate GMR’s $500-million Male airport project even as the Mohamed Waheed government refused to honour the order.

While the court order allows GMR to continue operations, Maldives defence minister and acting transport minister Mohamed Nazim said the government would take control of the airport from Saturday.

“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 the UK and Singapore,” President Waheed’s office said today.

GMR had moved the high court after the Maldives government terminated its contract and gave it seven days’ notice to vacate the project. The deadline ends on December 7.

GMR officials questioned the government’s decision to scrap the contract despite the stay granted by the Singapore court in the presence of the island nation’s legal counsel.

“The stay was granted by the Singapore high court and the Maldives attorney-general was present during the proceedings. We will fight for our rights all the way to court,” said Andrew Harrison, CEO of GMR Male International Airport.

The Maldives government said the termination notice stood and it would pay compensation to GMR. The details of the compensation are not available.

Harrison, in a television interview, said, “The same concession agreement should be respected” and that the Maldives government was a guarantor to it.

He also denied receiving any communication from the government. “We have had no direct communication from the government. We expect any other communication would come to us directly.”

The airport development contract awarded to GMR in 2010 had been mired in controversy. The deal was firmed up when ousted President Mohammed Nasheed was in power. Nasheed stepped down from office in February.

Hassan Saeed, special adviser to Waheed, said the project was financially unviable and would be a massive financial blow to the government, which would have to shell out around Rs 2,781 crore over 25 years as concession.

The bone of contention between GMR and the Maldivian government is the levy of an airport development charge of $25 and insurance surcharge of $2 per passenger. The levy was supposed to be imposed from January 1 this year, but a local civil court had struck down the proposal in December last year.

The Nasheed government agreed to compensate GMR. However, the decision was reversed with Nasheed’s downfall.

Subsequently, GMR had offered to exempt Maldivians from the levy, while raising the development charge to $28 for all international passengers. The government in response served the termination notice.

The GMR-led consortium has so far invested $230 million in the project, of which $160 million has been funded by Axis Bank.