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Singapore/Male/New Delhi: In a move to put pressure on Male, India has frozen aid to
the Maldives as its 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, the
single largest Indian FDI in the Maldives, awarded to the
consortium for developing the Ibrahim Nasir International Airport
at Male.
"High Court of Singapore today (Monday) granted injunctive relief
(stayed) against the applicability and operations of (contract
termination) letter issued by the ministry of finance and treasury
(MoFT), government of Maldives," GMR said in a statement.
"The High Court upon hearing both the parties was pleased to grant
this stay in favour of GMIAL (consortium of GMR-MAHB)."
However, the arbitration process will continue on the sidelines,
said a company official.
The Singapore High Court is acting as an arbitrator in the issue
between the GMR-backed consortium GMIAL and the Maldives
government. Under the contract, the law of either Singapore or
Britain would apply in case of differences between parties.
The Maldives government, however, chose to defy the 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.
Upset at the Maldives government's attitude, India has put on hold
$25-million budgetary commitment to Male, said reliable sources
Monday.
Bilateral ties will be affected, said the sources.
The Indian government is also studying the court order and its
implications, said the sources.
The Maldives government Wednesday had defended its decision to
terminate the GMR contract, saying the deal was dogged by "legal,
technical and economic issues". However, in the wake of reaction
by the Maldives government Monday, it seems legal issues were only
the fig leaf behind which President Mohamed Waheed was hiding, the
sources said.
In New Delhi's assessment, there are many vested interests at
work, a veiled allusion to the increasing clout of a pro-China
clique that is said to be close to the powers-that-be in Male and
has influenced the decision to scrap the GMR contract.
What is more distressing to India, the sources added, is the way a
commercial dispute has been used by some fringe elements and
political parties in the Maldives to whip up anti-India
sentiments.
"It has become an election issue and it has ceased to be a purely
commercial matter," said the sources.
Elections are scheduled to be held in the Maldives late next year,
but there are indications that they could be held as early as next
year. GMIAL, which is a consortium of GMR and Malaysian airports
operator MAHB, had won the right to operate and modernise Ibrahim
Nasir International Airport in a bidding conducted by IFC, an arm
of the World Bank.
The Maldivian cabinet had directed GMIAL to hand over the airport
within seven days to MACL. It had also asked GMR to vacate and
remove all property from the airport within 30 days.
According to GMR, both MACL and the MoFT, under the concession
agreement, "are not allowed to interfere with the rights of the
Investor (GMR-MAHB consortium)".
"With this (judgment), GMIAL shall continue to operate the Ibrahim
Nasir International Airport as usual as per the provisions of the
concession agreement," GMR said.
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