Singapore/Bangalore, Dec 6, 2012, Reuters & DHNS 2:09 IST
Blow follows hope for GMR which stands to lose the $ 511 m project
The Singapore Supreme Court on Thursday dealt a severe blow to infrastructure company GMR Infrastructure by ruling in favour of Maldives in the ongoing dispute in the $511 million Maldivian Airport development contract and effectively paved the way for a takeover of the airport by the Maldivian government.
Chief Justice of Singapore, Sundaresh Menon, said, “The Maldives government has the power to do what it wants, including expropriating the airport.” His ruling came after GMR won a brief reprieve on Monday when the Singapore High Court granted a stay in favour of GMIAL (GMR-MAHB) suspending the government's decision to cancel the contract.
The media spokesperson for Maldives president Mohammed Waheed Hasan said, “We will take over. We will enroll all those people from GMR who wish to join. Those who don't can go home. By Friday midnight we will take over,” adding that the Maldives would pay compensation to GMR. GMR employs 1,800 people at the airport, 95 per cent of whom are locals.
GMR Infrastructure, in a brief response said, “We have not had any discussion with the government of Maldives regarding handing over the airport.”
The contract for Ibrahim Nasir International Airport, agreed in 2010, was the largest foreign investment in the south Asian tropical destination famous among tourists. But it became embroiled in a bitter political argument, threatening to cloud foreign investor sentiment towards a country seeking overseas cash for many of its tourism projects.
Andrew Harrison, chief executive officer of the airport project, said it was too soon to discuss the practicalities of a handover. He said, “We've always been advocates of following the law. We are waiting to review the full judgment, which is currently being written up. It is too early to comment officially. We will have a staff briefing tomorrow afternoon.”
The two sides have not yet agreed on terms of compensation. The president’s spokesperson added, “We will go for international tenders may be in one-and-half years from now. But they will be very transparent.”
The contract to upgrade and operate the airport and build a new terminal came after a global tender overseen by the World Bank and signed under former president Mohamed Nasheed's administration.
The project was implemented through a joint venture company comprising GMR Infrastructure Limited and Malaysia Airports Holding Berhad (MAHB).
GMR Infrastructure share closed at Rs 19.80 on the Bombay Stock Exchange, down 1.25 per cent from its previous close.
New Delhi appoints new envoy
Amid growing signs of strains between India and Maldives, New Delhi has appointed a new envoy to Male, paving the way for departure of the incumbent D M Mulay, reports DHNS. Mulay, who has of late been under attack from several political parties in Maldives, is set to be replaced with Rajeev Shahare by next March.
Shahare is currently a joint secretary in the West Asia and North Africa Division of the Ministry of External Affairs in New Delhi. Mulay has been appointed as India’s Consul General in New York.
New Delhi’s decision to change its envoy to Male came at a time when the bilateral ties between the two countries are strained.