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News updated at 9:03 AM IST

Maldives scraps GMR airport management contract

New Delhi, Nov 27, 2012, DHNS: 1:30 IST

Angry New Delhi says itll ensure Indian interests are protected

Image for representation only.
In a strong reaction to the Maldivian government’s move to terminate its agreement with Indian infrastructure giant GMR group to manage the international airport in Male, New Delhi on Monday said it was ready to take “all necessary measures” to ensure safety and security of its interests and its nationals in the archipelagic nation.

Hours after Maldivian government made public the decision of President Mohammed Waheed Hassan Manik’s Cabinet to annul the agreement with GMR group, New Delhi conveyed to Male that its move would send a very negative signal to foreign investors.

“The Government of India proposes to monitor the situation in Maldives closely and is prepared to take all necessary measures to ensure the safety and security of its interests and its nationals in the Maldives,” the Ministry of External Affairs said in a statement issued in New Delhi. India also called upon Maldives to “fulfil all legal processes and requirements in accordance with the relevant contracts and agreement it concluded with the GMR.”

Maldives’ Attorney General Aishath Azima Shakoor on Tuesday revealed that the island nation’s Cabinet had decided to annul the June 28, 2010, agreement that awarded the GMR group the contract to manage the Ibrahim Nasir International Airport in Male for 25 years.The GMR Male International Airport Limited – a joint venture of the GMR Infrastructure and the Malaysia Airports Holding Berhad or MAHB – had won the contract during the regime of Mohamed Nasheed.

The GMR Group confirmed that the Maldivian government had served it a notice “intending to take over the possession and control” of the airport in Male. The company termed the move “unilateral and completely irrational.”

New Delhi on Tuesday noted that the contract had been awarded after a 10-month-long global bidding conducted by Washington-based International Finance Corporation, a member of the World Bank Group. “As the advisor to the Government of Maldives, the IFC has stated that it has complied with Maldivian laws and regulations and followed the best practices at each step of the bidding process to ensure the highest degree of competitiveness, transparency and credibility of the process,” stated the Indian government.

Nasheed had stepped down on February 7 in the wake of differences within the ruling coalition, paving the way for Hassan to take over as the president. New Delhi was actively involved in efforts to restore political stability after the change of guard in Male.

The Maldivian government’s move to annul the contract awarded to the GMR Male International Airport Limited came close on the heels of a diplomatic row over a comment made by Hassan’s spokesman Abbas Adil Riza about Indian High Commissioner in Male, D Mulay.

Riza called Indian High Commissioner a “traitor” and “an enemy of Maldives,” while speaking at a rally held in Male to protest against the contract awarded to GMIAL.

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