GMR's Male Airport: Malaysia to discuss issue with PM

Malaysian Prime Minister Najib Tun Razak, who is scheduled to visit New Delhi for India-Asean meet between December 20-21, is likely to discuss with Prime Minister Manmohan Singh the issue of GMR's now scrapped Male Airport project in which MAHB holds 23 per cent stake. "The heads of the governments (Malaysia and India) are going to meet in New Delhi next week. There may be some discussion (on Male airport issue). There will be sideline meetings in Delhi," Malaysia's Consul General in Chennai Citra Devi Ramiyah told reporters.

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Malaysian government owned MAHB holds 23 per cent, while GMR holds 77 per cent stake in GMR Male International Airport Pvt Ltd, a joint venture formed for developing Ibrahim Nasir International Airport in Maldives. The Malaysian Prime Minister is visiting New Delhi on December 20 to commemorate 20 years of India-Asean partnership. He is expected to meet Prime Minister Manmohan Singh during his visit.

Ramiyah said the Malaysian government has not yet initiated any move towards claiming compensation form the Maldivian Government for abruptly terminating airport. The new Maldivian government had on November 27 terminated the contract given to GMR-MAHB consortium in 2010 during the previous regime of President Mohamed Nasheed. The issue had sparked protests from both Indian and Malaysian governments. When asked whether MAHB is moving a petition for compensation from the Maldivian government, the diplomat said: "At this juncture it is very early to comment because the Singapore court had just made the decision. The Maldivian government wants to do the project on its own and willing to compensate financially. So, it is very early for us to comment."

The airport was taken over by the Maldives Airports Company Limited after a high-voltage legal tussle in which GMR had initially got a stay order on the termination from the Singapore High Court. However, the Singapore Supreme Court ruled on November 6, a day before the notice period expired, that Maldives has the power to take over the airport on November 6. Replying to a query if GMR is not welcome in Maldives anymore, Masood said, "We don't have anything against GMR. We had objection to the contract that was signed under dubious conditions. We will in the future initiate a lot of infrastructure projects and GMR is welcome to bid for it."

However, sources in the know said that the "unlawful" termination of the contract sends a "negative signal" to foreign investors, a stand taken by Indian government too. "It now feels that any contract signed with a particular regime can be scrapped when a new government comes in. It is a risky proposition," a source said. Asked if Maldives will seek fresh bids for the modernisation and the operations of the airport, Imad said the cabinet has given the nod to set up a new company called Maldives International Airport Limited that will takeover from MACL. However, he added the structure of MIAL is yet to be finalised.

Refuting the allegations that the move to terminate the contract was a political one to whip up emotions before the elections next year, Imad said, "Protests against the contract have been taking place since the first day it was signed by Nasheed. There were regular protests and marches happening". He added, "We had a set of issues that needed to be looked into after we came to power. We are tackling them one by one and airport issue was one of them. We consulted reputed international law firms and they agreed with us that the contract was not valid. It is only then we terminated". "The President has not even said if he might or might not run for Presidency. It is completely wrong to say that it was done for political mileage. We are only setting the wrong done by Nasheed right," he added.