The GMR Group is considering legally challenging in a Singapore court the Maldives Government decision to terminate its contract for modernising the Male airport.
The decision to approach courts in Singapore was taken as the contract for modernisation of the Male airport states that arbitration can take place either under Singaporean or British laws, sources said.
Legal process
A GMR team is in Singapore and the legal process could begin in the next seven days, sources said. Late on Tuesday, the Maldives Cabinet recommended termination of the contract awarded to the GMR Group to develop the Male airport.
In 2010, GMR Male International Airport Private Limited (GMIAL) won the right to build and operate the Ibrahim Nasir International Airport for 25 years, extendable by 10 years. GMR Infrastructure holds majority stake in GMIAL.
Sources claimed the Maldivian Government’s letter terminating the contract was a “weak one”. The bone of contention is GMR’s decision to levy a departure fee of $25 per passenger on those using the airport.
What complicates the picture is that the contract to modernise the airport was awarded during the regime of former President Mohamed Nasheed, who was removed from office earlier this year.
Departure fee
The GMR Group wrote to the new President, Mohammed Waheed Hassan, suggesting that it would not charge Maldivian nationals the departure fee. Instead, GMR proposed that the amount paid by a departing foreign passenger be hiked to $28 from $25. Sources claim there has been no response from the President to GMR’s letter.
Even as the Maldivian Government has taken steps to start the process of cancelling GMR’s contract, the island-state’s latest Budget proposed increasing the passenger service fee to $30 from $12.
This proposal was mooted in the Budget presented on Tuesday, the same day the Cabinet took steps to initiate action to cancel the GMR contract.