Indian high commission welcomes renegotiation of TATA housing deal

The Indian High Commission has welcomed the successful renegotiation of the TATA Housing development project in Malé.

“The positive developments in the TATA Housing project would definitely encourage more such investments from Indian businesses into Maldives,” read a press release from the Indian High Commission today.

Work on residential apartments will now resume on the Gaakoshi and Arabiyya sites, after a two year delay as the government sought to renegotiate the original terms of the contract.

“Government of Maldives has also given a commitment to transfer back the two sites – Naadhee  and Odean, which were taken back by Government for specific purposes, and provide other timely clearances to the company,” the statement continued

The initial agreement was signed in May 2010 between the government of Mohamed Nasheed and Apex Realty Pvt Ltd – a joint venture between TATA Housing Development and SG 18 Realty.

Work commenced on the premises, but was later halted due to pending resolution of numerous contractual issues.

“Despite a two-year delay, due to certain external and unavoidable circumstances resulting in hugely enhanced cost implications, M/s Apex Realty, where Tata Housing is a majority shareholder, is committed to deliver the residential apartments to the people and government of Maldives.”

The addendum agreement was signed today between TATA Housing Managing Director and CEO Mr Brotin Banerjee and the Maldives Ministry of Housing and Infrastructure.

Shortly after the project stalled in 2012, officials from Apex Realty reportedly told Indian media of fears that local politics were derailing their investments in the Maldives.

“The agreement has firm assurances from both Government of Maldives and TATA Housing,” read today’s high commission statement.

Relations between the Maldives and India cooled following the premature termination of the GMR airport development deal – also signed under the Nasheed government – in late 2012.

After being reviewed in a Singapore court of arbitration, the GMR deal was recently ruled to have been legal and binding, leaving the Government of Maldives liable for damages incurred by the Indian company.

Since assuming the presidency in November 2013, President Abdulla Yameen has sought to improve investor relations, expressing his hope that Indian companies continue to invest in the Maldives.

The current government’s controversial flagship legislation – the recently passed Special Economic Zones Act – is intended to attract further foreign investment.