The government has declared that the Maldives Airports Company Limited (MACL) will continue operating Ibrahim Nasir International Airport (INIA), apparently abandoning efforts to transfer operations to the newly-created Male’ International Airport Limited (MIAL).
The President’s Office said in a brief statement today that while the government had intended MIAL to take over the airport’s operation, the decision to abandon the attempt “was was made as the termination of the contract between the government of Maldives and GMR [is] currently in the arbitration stage.”
The decision follows an increasingly fractious series of emails between MACL and Axis Bank, one of the lenders to the GMR-MAHB airport consortium which had its concession agreement to upgrade and operate the airport summarily terminated by the new administration in December 2012.
While the sudden termination of the agreement is the subject of current arbitration proceedings in Singapore, Axis Bank separately called in US$160 million worth of loans for the project which had been guaranteed by the Maldivian Finance Ministry at the time the deal was signed.
With arbitration ongoing, Axis Bank expressed concern that the creation of MIAL was an attempt to dissipate MACL’s assets ahead of a verdict and turn it into a shell company, and sought a guarantee from the government. That correspondence led to an exchange of heated letters from Singapore-based law firms representing both sides, particularly after Finance Minister Abdulla Jihad appeared to contradict earlier assurances from MACL by informing local media the transfer was expected to be completed by July 1.
MIAL’s appointed CEO Bandhu Saleem however told Minivan News at the time that “until the arbitration is complete, I think it will be very difficult to start a new company.”
Saleem is now to be appointed managing director of MACL, reported Sun Online citing a government official, with MIAL to be abolished ahead of a final decision on the matter.
Uncertainty
National political turbulence and uncertainty over the MACL-MIAL transfer in May led the global body representing the world’s airports, Airports Council International (ACI), to caution its members over the government’s potential “sale of equity in this entity to another airport operator.”
“ACI members are advised to conduct due diligence while considering any investment in the Maldives, considering the latest developments, uncertainty of outcome of elections, the legal and financial risks of the current arbitration and the nascent legal framework,” the email stated, warning potential investors that “any leadership changes arising out of the elections [could] have a material impact of the future of the Male’ airport and the decision of expropriation.”
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IF SIGNING GMR WAS THE BIGGEST BLUNDER OF NASHEED'S GOVERNMENT. THE TERMINATION OF GMR CONTRACT IS THE BIGGEST BLUNDER OF WAHEED COALITION.
But the point is everytime it is people like us who pay for the blunders. Now that waheed has committed the blunder, who is going to pay the money that gmr will ask as compensation? Not waheed and his family.
Cut your nose to spite your face ... ha haaa
Oh! our country is rich enough and even billions of dollars is just a pittance for us,let the GMR take the arms. hahahahaah
If the arbitration process goes against our country the people who made this decision to cancell the contract without due deligence , just for political reasons
should be made to pay Politically , financially . and sued in court for their reckless decision resulting citizens being penalised for their criminal disregard to their duty.
@Afran It is always the people that pay price or reap rewards - because they are the one supposedly choosing the elite to run the country. You think Bush is going to bear the brunt because of Iraq or Afghan war - it is going to be US public for they choose Bush as president (twice too boot). Same here - Maldivian government will be forced to honour the guarantee they gave to lenders plus reimburse GMR for cancellation of deal - it won't be Waheed or PPM or Adaalath for sure.