GMR to stay in Maldives despite airport deal cancellation
The GMR group has told NDTV that it wants to continue airport operations in Maldives despite the island nation's decision to cancel the $511 million deal earlier this week.
Arun Bhagat, EVP & group head (Corporate Communications) at GMR Group said the company has received the termination letter from the Maldives government, but the company will seek a stay order against the notice. GMR is set to appeal the cancellation in the Singapore High Court.
A legal arbitration over the deal is currently going in the Singapore High Court, but it is not clear whether the Singapore arbitration case will continue after the Maldives nullified the contract.
GMR, a subsidiary of Bangalore-based GMR Infrastructure Ltd, has been given seven days to leave the Indian Ocean island chain.
GMR won the contract in 2010 to upgrade and operate the Maldives airport and build a new terminal after a global tender overseen by the World Bank. The deal with the GMR was signed under former president Mohamed Nasheed's administration, following a competitive bidding process conducted by the World Bank's International Finance Corporation (IFC).
The project was implemented through a joint venture company comprising GMR Infrastructure Limited and Malaysia Airports Holding Berhad.
The cancellation raises concerns over investor protection in the Maldives, which is seeking foreign financing of tourism projects, and follows a year of political turmoil, with the ousting of a president and months of unrest.
India said the move sends a "very negative signal to foreign investors and the international community".
The deal has reportedly been cancelled because the contract contained a $25 airport development charge per outgoing passenger which was not authorised by the parliament.
Arun Bhagat, EVP & group head (Corporate Communications) at GMR Group said the company has received the termination letter from the Maldives government, but the company will seek a stay order against the notice. GMR is set to appeal the cancellation in the Singapore High Court.
A legal arbitration over the deal is currently going in the Singapore High Court, but it is not clear whether the Singapore arbitration case will continue after the Maldives nullified the contract.
GMR, a subsidiary of Bangalore-based GMR Infrastructure Ltd, has been given seven days to leave the Indian Ocean island chain.
GMR won the contract in 2010 to upgrade and operate the Maldives airport and build a new terminal after a global tender overseen by the World Bank. The deal with the GMR was signed under former president Mohamed Nasheed's administration, following a competitive bidding process conducted by the World Bank's International Finance Corporation (IFC).
The project was implemented through a joint venture company comprising GMR Infrastructure Limited and Malaysia Airports Holding Berhad.
The cancellation raises concerns over investor protection in the Maldives, which is seeking foreign financing of tourism projects, and follows a year of political turmoil, with the ousting of a president and months of unrest.
India said the move sends a "very negative signal to foreign investors and the international community".
The deal has reportedly been cancelled because the contract contained a $25 airport development charge per outgoing passenger which was not authorised by the parliament.
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