Indian Aviation Minister urges resolution of GMR dispute

Indian media outlets have reported that the country’s Minister for Civil Aviation Ajit Singh has asked the Maldives to consider ways to resolve ongoing disputes with Indian company GMR regarding the development of Ibrahim Nasir International Airport (INIA).

The Economic Times reported that the issue arose during a meeting with the Aviation Minister and a Maldivian delegation led by the Maldives’ Minister for Transport and Communication Dr Ahmed Shamheed.

The paper said that an official statement from the Civil Aviation Ministry had highlighted the major issues discussed:

“The contentious issues include provision of airport development charges provided for in the agreement with the GMR, but termed as unauthorised by a local court in the Maldives, and a demand for an additional runway not provided in the agreement,” the statement is reported to have said.

The development of the airport – expected by the company to total US$511m in costs – is the largest foreign investment project undertaken in the Maldives’ history and includes commitments to complete the renovation of INIA’s existing terminal this month.

The issues detailed during the meeting have been compounded in recent months by government aligned parties calling for nationalisation of the airport as well as orders to halt construction work following allegations of missing permits.

CEO of GMR Maldives operations Andrew Harrison today told Minivan News that the government had informed the company it had complied all regulations, but had not yet given it the go-ahead to resume work.

“We have not done any work since August 2,” said Harrison.

During a visit to India last month, leader of the government aligned Dhivehi Rayyithunge Party (DRP) Ahmed Thasmeen Ali warned of serious repercussion for investor confidence should the country renege on the GMR deal.

Sri Lankan media this week has also reported Business Council leader Hussain S Hashim as saying that a lack of trade dispute mechanisms in the Maldives was stifling bilateral trade.

Travel Daily India reported that additional measures to strengthen bilateral ties in the aviation sector were discussed during the meeting.

Increasing air links between Indian cities and the Maldives was a topic reportedly discussed. It was reported that Island Aviation, Spice Jet, and Mega Maldives are all planning to connect Mumbai, Delhi and Chennai with Male’.

Changes to the countries’ aviation agreement was also mentioned in Travel Daily, with the current rules only allowing flights with carrying capacities of less than 150 passengers.

“India will relook the agreement which will help in boosting tourism between the two countries,” Singh is reported to have said.

During his official visit to India in May, President Dr Mohamed Waheed Hassan spoke of his desire to bring more Indian visitors – who currently represent only 2.9 percent of the market share – to the Maldives.

“Not enough Indian tourists are coming to the Maldives and that is a matter of concern for us. I am sure it is also a matter of concern for India, particularly when you realise that there are so many Chinese tourists who are coming to the Maldives now,” Dr Waheed told India’s Business Line.

Whilst Dr Shamheed is in India, a number of his fellow cabinet ministers have accompanied President Waheed on his official state visit to China.

Yesterday, the President’s Office website reported that Waheed had met with members of the business community in Shanghai.

Waheed is reported as having said that investors were always welcome in the Maldives.

“Maldives is open for business,” Waheed told those in attendance at the opening of the China-Eurasia Expo & the 2nd China-Eurasia Economy Development and Cooperation Forum.

The highlight of Waheed’s first trip to China as President has been the finalising of a $500million (MVR7.7billion) package of aid, concessional loans, and loans for housing construction.