GMR row: Maldives minister tries to pacify India

Last Updated: Tue, Dec 04, 2012 13:48 hrs

New Delhi: In outreach diplomacy aimed at pacifying India, Maldives' Foreign Minister Abdul Samad Abdullah Tuesday rang up External Affairs Minister Salman Khurshid and explained the reasons behind his government's decision to cancel the airport contract given to Indian firm GMR.

The Maldives minister explained legal and other reasons that were used as rationale for cancellation of the project, said official sources.

The sources added that Abdullah sought India's understanding and hoped it will not hurt bilateral ties.

He conveyed to Khurshid that a detailed communication on the GMR issue will be sent to Prime Minister Manmohan Singh soon, said the sources.

Khurshid conveyed India's displeasure at the decision on the GMR project and underlined that the scrapping of the biggest single Indian FDI in the Maldives will negatively impact bilateral trade ties and the larger relationship.

He also stressed that legal ways should be found to resolve the stalemate.

In a move to put pressure on Male, India has yet to disburse $25 million budgetary support to the Maldives and is keeping all its options open as levers to pressure the Indian Ocean island, better known for pristine beaches and exotic resorts.

The Maldives government Monday decided to take control of the international airport despite a Singapore court staying the suspension of the contract given to India's GMR-led consortium.

The High Court of Singapore suspended the Maldives government's decision last week to terminate the $500 million contract awarded to the consortium for developing the Ibrahim Nasir International Airport at Male.

The Maldives government, however, has chosen to defy the court order.

"We will continue the airport takeover and Inshallah next Saturday onwards MACL (state-controlled Maldives Airport Company Ltd.) will be running the airport," Defence Minister and acting Transport Minister Mohamed Nazim told reporters in Male Monday.

The Indian government is also studying the court order and its implications, said the sources.

India is also distressed by the way a commercial dispute has been used by some fringe elements and political parties in the Maldives to whip up anti-India sentiments.

Elections are scheduled to be held in the Maldives late next year, but there are indications that they could be held early next year.

GMIAL, which is a consortium of GMR and Malaysian airports operator MAHB, had won the right to operate and modernise the Male Airport in a bidding conducted by IFC, an arm of the World Bank.

The scrapping of the GMR project has elicited strong objections from India. The Confederation of Indian Industry (CII), a premier business body, Tuesday came out in full support to the Indian government on the steps taken in the wake of termination of concession agreement.

"It is extremely important for all the concerned parties to respect the sanctity of the Concession Agreement and abide by the provisions provided therein to resolve any dispute within the stipulated legal framework," said CII director-general Chandrajit Banerjee.

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