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.