With additional reporting by Ahmed Rilwan
President Abdulla Yameen has today said the government was sure it would have to pay some compensation for cancelling the agreement made with the Indian infrastructure giant GMR to lease Ibrahim Nasir International Airport (INIA).
“The truth we should accept is that a government with all its sovereignty has given permission to a foreign party under an agreement,” said the president.
“So we believe some sort of financial compensation must be paid to them. A compensation must be given for taking the airport [from them]. What we are trying to make sure this compensation is not big but average.”
Yameen was speaking to the press before leaving for Singapore to take part in the Maldives Investment Forum – an event he described as “the first step taken towards a fresh start for the Maldives in today’s world economy”.
In November 2012, President Dr Mohamed Waheed’s cabinet declared the GMR agreement void ab initio – invalid from the outset – and ordered the developer to leave, just two years into its 25 year concession agreement.
President Yameen explained to the press today that his advisors believed that, if the arbitration panel could be persuaded that the deal had been anulled due to the airport’s national importance, the compensation would be small.
GMR had initially claimed US$1.4 billion – a figure greater than the Maldives’ annual state budget.
Yameen’s Progressive Party of Maldives (PPM) formed part of the Waheed coalition government, though it’s leader – former President Maumoon Abdul Gayoom – has since accuse Waheed of going against his party’s advice by failing to reach an amicable agreement with GMR and the Indian government.
During his first official state visit to Indian in January, Prime Minister Dr Manmohan Singh requested President Yameen to “amicably” settle the GMR airport issue.
Earlier this month, Yameen had said that the out-of-court amount sought by the infrastructure company was too great, and that he would now await the outcome of proceedings, which could take up to another two months.
The US$511 million concession agreement to manage and upgrade the airport – awarded under the former government of Mohamed Nasheed – was the single largest foreign investment in the Maldives’ history.
President Yameen will tomorrow give the keynote speak at the landmark investment forum, as he seeks to generate interest from foreign investors for five ‘mega-projects’ – one of which is the further development of Ibrahim Nasir International Airport (INIA).
As part of the president’s attempts to lure foreign investors back to the country, he has promised special economic zones which hopes will be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”
Senior management of Singapore’s Changi International Airport visited the Maldives earlier this month, with Yameen explaining the purpose of the visit to press this afternoon.
“Changi’s management will be our final consultant with the terminal [project] and other consultancies required for the airport,” he explained. “We want to seek technical expertise and information on how to do things from Singapore Changi.”
“The project has progressed far now, Changi has expressed interest. So we believe all the supervisory and consultancy work of this terminal will be carried out by Changi.”