Maldives decides to scrap GMR contract, India reacts sharply

The Maldives Cabinet in a meeting today decided to terminate the contract, Maldivian President's Press Secretary Masood Imad told PTI from Male.

In a statement, the Maldivian government said the decision to terminate the Concession Agreement signed on June 28, 2010, between GMR-MAHB consortium, Maldives Airports Company Ltd and the government was based on a paper presented by the Attorney General's office prepared after a "thorough research done for the past nine months by a Cabinet Committee".

The paper is based on "technical, fiscal and economic issues" and also includes the legal advice of lawyers from the UK and Singapore regarding the agreement which was "legally invalid, and impossible to further continue".

The Attorney General's office will initiate arbitration proceedings against GMR Male International Airport Ltd (GMIAL), the Cabinet decided, the statement said.

The USD 500-million project was hanging in balance ever since the regime change in Maldives earlier this year. The GMR group had won the contract during the regime of former President Mohamed Nasheed.

Some coalition partners of the current regime headed by Mohamed Waheed had also held a rally against GMR on November 3.

The airport contract was awarded to GMR through a 10-month long global competitive bidding process run by the then Maldivian government headed by Nasheed.

In New Delhi, the External Affairs Ministry came out with a strong reaction saying the decision was taken without due consultations.

India also asked Maldives to ensure Indian interests and security of Indian nationals in the Indian Ocean island country are "fully protected". MORE