Indian firms blame politics for 'undue challenges' in Maldives

GMR group's $500 million Male airport project and a realty project being co-developed by Tata Housing are facing problems

Nearly eight months after the regime change in Maldives, some Indian companies present there are blaming political interference for creating "undue challenges" for them, even as the new government has assured that all Indian investments are safe.

Among the Indian firms doing business in Maldives, infrastructure major GMR group's $500 million Male airport project has run into rough weather, while a realty project being co-developed by Tata group firm Tata Housing is also facing land-related issues in the country.

Apex Realty, a special purpose vehicle (SPV) created by Tata Housing and SG18 Developers, is working on an ambitious housing project in the country.

Both projects were awarded during the regime of former President Mohamed Nasheed, who was forced to resign in February this year following country-wide streets protests.

Adding to the worries of the Indian companies, some coalition partners of the current regime are planning to hold a large rally against GMR on November 3.

Asked about the major fears that GMR has with respect to its airport project, a company spokesperson said, "GMR as a private investor has gone into a business contract with MACL (Grantor), a government-owned company, and the Government of Maldives (Guarantor) to develop and operate Male airport. However, to gain political advantage, some elements of the Government itself have started hampering the smooth functioning and development of the airport."

"Public statements and press conferences of some government ministers and coalition party leaders are clearly aimed at arousing public sentiments against GMR and creating undue challenges for us," the company said.

In the case of Apex Realty project, the Maldivian government has sought to take over the site already given to the firm to build a brand new Supreme Court building.

While the government has offered to give an alternate site, some problems still persist, officials at the companies involved in the project said, while requesting anonymity.

SG18 did not offer any official response and directed the matter to Tata Housing, which also declined to comment.

A recent meeting held with the Maldivian Housing Minister is said to have ended abruptly with officials from the firm and the Indian High Commission being asked to leave.

Asked about these developments, current President Waheed Hassan's Press Secretary Masood Imad said there is nothing to worry and all investments are safe in the country.

"This government will not target any investment, Indian or otherwise unduly. The assurances given by the President securing foreign investments in Maldives are valid and stand true," Imad said.

Asked about the meeting with the Housing Minister on Apex Realty project, Imad said, "A meeting did take place (and) I am told that the visit of the Tata Housing officials and Indian High Commission (official) was an unannounced visit. However, the Minister accommodated the meeting. Even without prior request for an appointment, Minister spared time for the meeting."

"I am told that the meeting continued for about an hour. Tata Housing officials were raising issues that were not in the contract but the Minister accommodated most of the issues. Most of the issues discussed were procedural," he said.

On its part, GMR said that new laws and policies in the country were harming its interests.

"GMR was granted required approvals and licenses to operate Arrival Duty Free on December 30, 2011. We made huge investments in development of arrival duty free area. However, the government later revoked the licence citing that earlier the licence was given in error. Similarly, On April 23, 2012, the GoM (Government of Maldives) passed an amendment to Business Registration Bill to restrict any foreigner to carry on Duty Free business, cargo clearance business, and bonded warehouse business at the airport. This step is clearly directed against GMR," the group spokesperson said.

Meanwhile, the Dhivehi Qaumee Party (DQP) Leader and Special Advisor to the President, Hassan Saeed recently wrote to Indian Prime Minister Manmohan Singh, seeking his help in annulling the contract awarded to GMR.

Saeed has also levelled allegations of corruption against GMR, a charge vehemently denied by the company.

"GMR was awarded the concession of Male airport through a 10-month long global competitive bidding process run by the Government of Maldives. IFC, a World Bank entity, was appointed by the GoM to run the bidding process in a fair and transparent manner," the company said.