Malaysia to work out solution to Maldives airport row

Last Updated: Fri, Nov 30, 2012 17:50 hrs

Male, Nov 30 (IANS) Malaysia has pledged to work out a solution to the issues surrounding the Maldives government's decision to annul the airport contract given to a consortium led by India's GMR Group and Malaysia Airports Holdings Berhad (MAHB).

Malaysian Foreign Minister Anifah Aman Friday met his Maldives counterpart Abdul Samad Abdulla on the issue and said later the sit-down was "fruitful", according to Haveeru online daily.

Following the Maldives government's decision Tuesday to scrap the contract for the Ibrahim Nasir International Airport (INIA), the Malaysian foreign minister along with MAHB managing director Basir Ahmed arrived in the Maldives Friday afternoon.

The Malaysian foreign minister expressed confidence that a solution can be sought out through discussions with the Maldives government.

"As we are two friendly nations, there is no reason why this matter cannot be resolved," Anifah told reporters prior to departing from Maldives Friday evening.

In the consortium, GMR holds 77 percent stake and Malaysian Airports the remaining 23 percent.

Haveeru said it has been unable to obtain a comment from the Maldives government on the Malaysian minister's visit.

MAHB currently manages three airports abroad - the Delhi International Airport and Hyderabad International Airport in India and the Sabiha Gokcen International Airport in Turkey. At home, it operates 39 airports, including the Kuala Lumpur International Airport.

Meanwhile, Malaysian media reported that despite the abrupt termination of the agreement, MAHB is not too perturbed about the development.

According to the Malay Mail, its chief financial officer Faizal Mansor said: "We had only invested RM20 million in the operations and profited about RM40 million from the project."

He said MAHB is still at good terms with the new Maldivian government and noted the Maldives Airport Company Ltd will take over possession and control of the airport and its facilities in a week's time - together with the Maldivian ministry of finance and treasury.

While MAHB hasn't been informed on the cause for the termination, Faizal said it is likely due to political problems between India and Maldives.

"We were never the problem. Maybe the new Maldivian government did not want Bangalore-based GMR Group to be in the picture. If so, we don't want to be caught in the middle," Malay Mail quoted him as saying.

The Maldivian cabinet on Tuesday decided to terminate GMR's contract for developing the airport and issued it a notice to hand over the airport within seven days to state-owned Maldives Airports Company Ltd.

It had also asked GMR to vacate and remove all property from the airport within 30 days.

Termination of GMR's contract had evoked sharp reactions from India which said that it sends a "very negative signal" to foreign investors.

"The decision to terminate the contract with GMR without due consultation with the company or efforts at arbitration provided for under the agreement sends a very negative signal to foreign investors and the international community," a spokesperson of India's ministry of external affairs had said.

Maldives government has defended its move by insisting that the decision was made purely on legal grounds as the contract was invalid from the beginning.

The agreement awarding the airport to GMR group for 25 years was signed on June 28, 2010 by then president Mohamed Nasheed's government.

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