GMR seeks over $800 mn Maldives wants forensic audit

The $500-mn airport project contract awarded to GMR was

Infrastructure firm GMR will seek a compensation of “over $800 million” from Maldives for the termination of its airport deal here but Male is insisting on a “forensic audit”, as it feels the actual amount would be less than half.

“We have sent a letter to the Maldivian government indicating a number of more than $800 million as compensation. This is our initial estimate. The final figure would be based upon various calculations, loss of profit among others,” GMR (Airports) CFO Sidharth Kapur said.

The Maldivian government, however, debunked the calculations and insisted on getting a forensic audit done through an international firm. “We will go in for a forensic audit, as we want to see how much money has poured in to GMR coffers through the Male International Airport, and how much actual money has been spent here. According to our information, GMR has cashed in only $150 million of the about $350 million loan it had bagged through a bank,” Maldives President Mohamed Waheed’s press secretary, Masood Imad, said.

Asked if GMR was open to a forensic audit, Kapur said, “Our books are transparent. The concession agreement signed with the Maldives government did not have the clause of forensic audit. Having said that, I must add we don’t have any objection to an audit but it has to come through a proper legal process.”

Sources in the Maldivian government say the compensation amount, according to their calculations, should come to about a lower limit of $150 million and an upper limit of $350 million.

“We will present our case before the Singapore Court and let them take the call,” a source said.

The $500-million airport project contract awarded to GMR for modernising and operating the Ibrahim Nasir International Airport (INIA), signed in 2010 during the previous regime of Mohamed Nasheed, was “unilaterally” terminated by the current government on November 27.

The airport was taken over by the Maldives Airports Company Limited after a high-voltage legal tussle, in which GMR had initially got a stay order on the termination from the Singapore High Court. However, the Singapore Supreme Court ruled on November 6 — a day before the notice period expired — that Maldives had the power to take over the airport on November 6. Replying to a query if GMR is not welcome in Maldives anymore, Imad said, “We don’t have anything against GMR. We had objection to the contract that was signed under dubious conditions. We will in the future initiate a lot of infrastructure projects and GMR is welcome to bid for it.”

However, sources in the know said the “unlawful” termination of the contract sent a “negative signal” to foreign investors.

“It now feels that any contract signed with a particular regime can be scrapped when a new government comes in. It is a risky proposition,” a source said.

Asked if Maldives would seek fresh bids for the modernisation and the operations of the airport, Imad said the Cabinet had given the nod to set up a new company called Maldives International Airport Limited (MIAL) that would take over from MACL. However, he added the structure of MIAL was yet to be finalised.