Maldives hopes GMR contract termination will not impact ties

A day after his government terminated the USD 500 million GMR airport project here, Maldives President Mohamad Waheed today hoped that it will not affect bilateral ties with India, which has reacted sharply over the Maldivian decision.

He also termed the Male airport development contract signed with GMR by his predecessor Mohamed Nasheed's government as "void ab initio".

The President's remarks come in the backdrop of sharp reaction by India which said Maldives should ensure that safety of Indian interests and its nationals are "fully protected" in that country.

"We have always maintained that this is a commercial contract that was signed by the Mr Nasheed's Government under dubious conditions. The actual signing was conducted despite Parliament's objection," Waheed said in an interview to PTI.

"We remain confident that India-Maldives relation will not be affected by the cancellation of the GMR contract by MACL (Maldives Airports Company Ltd). In the meantime two other contracts with Indian companies are been taken forward. The bilateral relation, especially in the fields of military, trade and business, is even stronger than before," he said.

The contentious GMR project was hanging in balance ever since the regime change in Maldives earlier this year. GMR along with its Malaysian partner Malaysia Airport Holding Berhad, had won the contract for developing the Male International Airport during Nasheed's regime and it was the biggest single FDI into Maldives.

The issue had also cropped up during the talks between Prime Minister Manmohan Singh and Waheed, who visited India earlier this year. Waheed had then assured that Indian investments will remain "safe".

When asked about the turnaround, Waheed said, "Our lawyers have advised us that the MACL's contract with GMR is a 'void ab initio' contract, and for this reason it cannot be continued".

He added, "There are many more Indian investments in Maldives (and) just to name a few, The State Bank of India, Taj Chain of Hotel, Tatuwa, Tata Housing and many others. All these businesses are doing well.

"Maldives welcomes Indian investments. We have to ensure that they are in accordance with the laws of this country".

The President insisted that the termination of GMR contract will not affect bilateral relations with India, which was one of the first to recognise the current government after the regime change in February.

"The Maldivian government values and considers bilateral relationship between our two countries important. We have made our position very clear to the Indian government.

Our Foreign Minister met informally with the External Affairs Minister (Salman Khurshid) recently to explain the position of the government and the difficulties the MACL and the government was facing on the GMR issue.

"We remain confident that India-Maldives relation will not be affected by the cancellation of the GMR contract by MACL," he said.

Asked about India's reaction, Waheed said "I don't think that Indian reaction is critical of the decision to terminate the GMR agreement. This is only a single event and Indian government is fully aware of the sentiments of the Maldives in this regard."

"Termination of the GMR contract, which was signed under dubious conditions, only provides assurances that Maldives is committed to a clean and safe business environment for foreign investments," the President stressed.

Asked if there was a rethink in Maldives about India being its strong and close friend, Waheed said New Delhi "is the closest friend" and will remain so without exception.
"This government will see to it that more investors from India come to Maldives and that they continue to play an active and beneficial role in the economy of this country," he said.

"India truly is the closest friend and will remain so," he added.

Replying to a query about recent anti-India statements by one of his advisors and some political parties, Waheed said, "All these rhetoric have roots in the GMR contract. Indian business continues business as usual without interruption.

"Once again, this is not a India-Maldives business relationship issue, it's a GMR/MACL contractual issue. It is not proper for anyone to draw incorrect conclusions regarding these two cases".