GMR gets respite in Male Airport issue

Anti-Corruption Commission of Maldives rules out corruption in leasing of Ibrahim Nasir International Airport to the company

GMR Infrastructure, which was forced to give up on the $511 million Male International Airport by end of 2012 over alleged irregularities during the bidding stage, is understood to have got a reprieve from the Anti-Corruption Commission of Maldives (ACC) indicating that there was no corruption involved in the leasing of the Ibrahim Nasir International Airport to GMR by the previous administration.

A GMR Group spokesperson said : “We learn from media reports in the Republic of Maldives, that the Anti-Corruption Commission of Maldives (ACC) has submitted its report on the leasing of the Ibrahim Nasir International Airport.  We are in the process of studying the report.”

This report by ACC of Maldives gives a shot in the arm to the debt-ridden GMR Infrastructure, which is locked in an arbitration tussle with the current government of Maldives seeking compensation over the unceremonious exit. GMR Group chairman G M Rao had earlier stated that they may seek as much as $700 million over this move.

The current government in Maldives led by Mohamed Waheed had earlier stated that GMR was misled by the earlier Mohamed Nasheed administration to signing a legally unsustainable agreement.

In addition to the alleged corruption during the bidding process which was overseen by IFC (an arm of World Bank), the current government had said that levying of airport development charge cannot be done without the approval of Parliament of Maldives. The project was awarded to GMR Infrastructure during the previous regime of the island nation during mid of 2010.

It is understood that as part of the arbitration proceedings at a court in Singapore, the Government of Maldives have recently submitted their views.  In the while, GMR Infrastructure has already written off a little over Rs 200 crore from its operations at Male.

At the time of exit, this the Male airport operations clocked in revenues of Rs 1,200 crore on an annual basis and a net profit of Rs 83 crore.  GMR had formed a 77:23 joint venture with Malaysia Airport Holdings for this project which involved upgrading, maintaining and operating the existing airport as well as building a new terminal by 2014 and which had a debt component of $358 million funded by a consortium led by Axis Bank.