GMR-Male Airport row: How the story unfolded since 2010

Moneycontrol Bureau

After falling to its all-time low of Rs 16.75 last Thursday post cancellation of Maldives airport contract, GMR Infra recovered almost 8 percent; but uncertainty over the company's projects remains. Despite a court order, Maldives has not revoked the termination. Analysts believe that if GMR eventually loses the contract, it will dent stock valuations in the interim as its domestic power, roads and airports businesses are already under pressure.

GMR officials, who will meet the press at 12 pm in New Delhi today, say despite the High Court of Singapore on Monday staying the termination, the Mohammad Wahid led government of Maldives has unlawfully threatened to take over the airport from them.

Here is how the entire controversy over running the Male airport began:

July 2010: After a ten month-long bidding process, GMR won the USD 500-million Male Airport project during then President Mohammed Nasheed's regime.

Oct 2010: It achieved financial closure for the USD 500-million project which is 70% debt funded, interest outgo for which is around 50 crore (quarterly)

November 2010: Maldives Airport Company (MACL) officially handed over the license to GMR to upgrade and operate the airport.

Jan 2011: GMR announced that it will complete the project by 2014-15

March 2011: GMR accelerated pace of work.

June 2011: Company started facing difficulties in upgrading the airport when local politicians objected to GMR taking over the non-aero space for commercial development.

September 2011: GMR somehow managed to start retail development after taking over spaces around the airport.

December 2011: GMR announced that as per the agreement signed with the authorities it will charge USD 25 toward airport development charges (ADC) and USD 2 as an insurance charge to outbuond passengers starting January. The revenue was expected to amount to $25 million by 2012.

In the same month, a Male civil court stopped GMR from collecting ADC, saying it was identical to existing airport service charges being collected from passengers. Local politicians had filed a PIL against GMR regarding ADC.

Jan 2012: GMR expressed displeasure for not being allowed to collect charges claiming they were integral to the agreement it had signed with the government.

March 2012: GMR's problems started compounding when Nasheed's government was ousted and new government headed by Mohammed Waheed came to power. The most critical charge levelled by the newly-formed government was that GMR had won the contract through unfair means and hence the contract was invalid.

June 2012: GMR appealed to the government saying that it had won the contract through an international bidding process overseen by the World Bank-affiliated body International Finance Corporation. "It was done in the most transparent manner," it stated.

July 2012:  The government threatened GMR with punitive action if airport not vacated.

Sept 2012: GMR said it catered to over six lakh passengers in the July-Sept quarter and earned Rs 3043 million from operations at the airport. In fact, GMR has in the past said that the project is a profitable venture, unlike Delhi Airport which is yet to break-even. Male Airport made Rs 440 million profit during the quarter. Post earnings announcement, despite all odds, GMR sounded bullish on running operations successfully even in future.

October 2012: Members of Maldives government, in a press conference in Mumbai to announce flights to Maldives were loud and clear is stating that GMR will have to give up the airport on grounds that it won the contract by unscrupulous means.

November 2012: Maldives government officially terminated the contract

December 2012: The Indian government may suspend U.S. $25 million in budgetary aid to the Maldives if the latter does not reconsider the contract.