Male airport exit: GMR Group, Maldives play chicken

Last Updated: Wed, Dec 05, 2012 21:50 hrs

GMR Group has dared the Maldivian government, saying the company would not exit the GMR Male International Airport (GMIAL) on Friday midnight, as directed. Trouble started brewing over the Male airport after the Maldives’ terminated GMR’s 25-year contract November 27, which the company termed “arbitrary”. GMR secured a stay order from the Singapore High Court, but the Maldives termed its decision "non-reversible and non-negotiable".

In a GMR press conference, Siddharth Kapur, chief financial officer, said, “We will continue as operators of the airport. The agreements were not just signed by the Maldivian airport company, but by the government also and, by that clear fact, they are bound to honour the judgment of the Singapore courts.”

“We are very sure and hopeful, and appeal to the government of Maldives to honour the jurisdiction of the Singapore court, in line with the concession agreement,” he added.

‘Sense of transition’
Refuting GMR’s claim of continuing as GMIAL operators, Masood Imad, media secretary of the Maldivian President, told Business Standard: “Whatever GMR is conveying to the Indian media, this is not what is happening on the ground. I get a clear sense of a transition. GMR recently transferred some equipment to the adjoining island, keeping the transition management team in loop. Why would they otherwise do so? Of the Indian workers in the airport, some people are being sent back to India by GMR recently, though I am not sure about the reason”

The seamless transition won’t be such a big deal as 95 per cent of the airport employees are Maldivians and the rest expatriates. The employees will now be on MACL rolls as opposed to GMR rolls, Imad added.

The GMR Group denied this, saying there was no truth in the matter.

Explaining the circumstances under which the deal between GMR and MACL (Maldives Airport Company Limited) was signed, Imad told Business Standard, “Just before the airport contract was signed, the minister of transport had sacked the board and the chairman of Maldives Airport Company, who had to sign on behalf of the Maldives, as they had opposed to sign the contract. The new members of the board signed the contract in less than two hours after their appointment.”

Imad added the Maldives Parliament had passed a bill before signing of the contract, which required the government to get parliamentary approval before signing a large business deal with a foreign company. It did not require the President's ratification to become law, as the bill was passed with two-thirds majority.

Being the internal matter of the Maldives, GMR Group offered not to comment on the issue.

No force
On the management transition from GMR to MACL, Imad assured no force would be used and it would be a smooth transition. No visas would be cancelled for any Indian national, if he/she wished to work under the new management.

GMR Infrastructure also said the involvement of a foreign country in the island nation's decision cannot be ruled out. "I can't say that for sure. But, looking at the political situation and political framework in Maldives, I can't rule out anything," Kapur told reporters.

‘Honour law’
Asked if the company would appeal to the International Court of Justice, Kapur said, "We expect and appeal to the Maldives government to honour international law." GMR is yet to calculate the compensation in case it exits the project, Kapur said, adding the Maldives Attorney General had calculated it to be $700 million.

Imad responded to this, saying the matter of compensation was still under the arbitration of the Singapore court. He said, “Whatever compensation the Singapore court decides, we will abide by that.”

Kapur also said the company was thankful for India's support since the start of the crisis, and hoped New Delhi would "take everything possible from their armoury to ensure something amicable comes out."

When asked if the GMR issue would be raised in Parliament, a CPI(M) MP said the company had been in touch with them. "But, we don't really know the full facts of the case. We would not like to vitiate conditions in a foreign country by making uninformed comments. For the time being, we are not thinking of raising it in Parliament."

More from Sify: