The Maldivian government believes GMR is owed US$300 million in compensation for the premature termination of the contract to develop the Ibrahim Nasir International Airport (INIA) instead of the US$1.4 billion the company is seeking, President Abdulla Yameen Abdul Gayoom told reporters upon his return to Malé last night.
Speaking to press after returning from Singapore to attend the Maldives Investment Forum, President Yameen insisted that the arbitration proceedings over GMR’s compensation claim has not deterred investors.
The INIA development project was the most popular among attendees at the forum, he said.
“The biggest interest was for the airport,” Yameen said.
The event – which took place on April 25 – was attended by over over 160 companies and nearly 200 representatives from 16 countries, and was the first overseas investor forum organised by the Maldives.
GMR compensation claim
Speaking to the press at the airport, Yameen argued that the previous government was within its rights to terminate the contract as it “damaged state and national interests”.
But since GMR had carried out some of the development works at the airport, the government has to pay compensation, he conceded.
President Yameen said that the compensation payment would affect the state budget, but added that $300 million is a “manageable” sum.
The state-owned Maldives Airports Company Limited (MACL), which now manages the airport, is “saving up” that sum, he said.
This statement comes after GMR is reportedly sticking to the US$1.4 billion compensation claim for the abrupt termination by the Maldivian government in December 2012.
“The forceful takeover of the airport by Maldives government amounts to repudiation of a valid contract and therefore damages, including loss of future profit has to paid. Thus, GMR’s claim is $1.4 billion,” Indian media reported the Bangalore-based infrastructure giant as saying in a statement on Friday (April 25).
On the investor forum, President Yameen said companies were also interested in developing a trans-shipment port in the north of the country, along with economic stimulation investments in Hulhumale’.
The island is a reclamation project to the north of Male’ to cater for the housing, industrial and developmental demands of the capital.
“Alongside (interests for the airport), there was (interest) for the economic development of Hulhumale’,” President Yameen said.
“Some large Chinese companies brought us (proposals) to develop a township in Hulhumale’, in addition to different (development) components for the airport. God willing, if we can put the effort, there is a lot to be gained here,” he added.
Moreover, the Ministry of Transport is seeking investors for building four new domestic airports. They are to be established on Haa Alif Huvanadhoo, Alif Alif Mathiveri, Faafu Magoodhoo and Meemu Muli.
The government is proposing leasing one or two islands for 25 years for resort development to the investors under a public-private partnership (PPP) programme in addition to a customs duty exemption for all equipment and material imported for the airport projects.
Moreover, the government has also made an announcement seeking a developer to expand Hanimaadhoo International Airport in the north of the country.
12 thoughts on “President predicts US$300 million compensation for GMR”
what ever the compensation need to pay, must be recovered from Nasheed and his associates who had taken the money from GMR to make this deal .
Hero mee kon vaahaka eh,kaley bodu dhe fuhppaa han azimaa buni void ab findho.Noew what the f*ck is this
@ali real classy
If yameen predicts $300 million, just multiply that by 4 and you'll get the right figure. It will be interesting to see how foreign investors react when the verdict comes from Singapore.
Neither scenario looks good for the regime, because:
(1) If the penalty is too low, then foreign investors will get very nervous in investing here, since they stand to lose a lot of money, in case the regime suddenly changes its mind.
(2) If the penalty is too high, then obviously, the regime goons won't have any money to line their pockets with!
Doomed is the word.
The petty cash from Prezzo's extracurricular activities could easily pay off the GMR debt thrice over. In a month...if the economics of the trade amounts to anything. So no fear right?
Such a predictable president we've got!
Investing in maldives is like burning money.
Contracts mean nothing in Maldives. They're only for the foreigners to follow, Maldivians do as they please. Prospective investors do so at your own risk. And be sure to allow enough in your expense forecast for large scale extortion, bribery and pilferage.
...there is such generosity towards India from MDP supporters. A group of Maldivians has never shown such sympathy and brotherhood with another country..
Question is why in this PARTICULAR case.. Is it standing for a principle or some thing else..
@such patriotism. Haven't you heard the quote my enemy's enemy is my friend,the objectives are the same supporters of mdp and gmr hate the present maldivians govertment
@such patriotism this has nothing to do with India,it's between maldives and gmr the only pressure could be from account of vadra exerted by his gmr bankrollers
Hero's just upset because I'll be increasing his rent. 😉
Stupid fools had it coming. I'll be investigating everyone who rents my homes, and if they're koalhushun gundaas, I'll add a 10% fee, citing 'economic problems'.
Ha ha ha!
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