Singapore International Arbitration Centre has settled on USD 208 million with four years’ of interest as the compensation owed by the Maldives government to India’s GMR Group for breaking off the contract awarding operations of Maldives’ main airport to the Indian firm, announced the government on Thursday.
The total amount with interest is USD 250 million, which is approximately MVR 3.8 billion.
Speaking at a press conference held in the President’s Office, Attorney General Mohamed Anil stated that the Arbitration Centre had pronounced its final ruling on Tuesday and forwarded the details to the Maldives late Wednesday. He noted that the final amount settled by the Arbitration is only 18 percent of GMR’s original demand, which was USD 1.4 billion as compensation.
“The Maldives government and MACL (Maldives Airports Company Ltd) have begun talks with GMR on how to pay this money,” said Anil during the brief conference without taking questions from reporters. He did not disclose the period of time allocated to pay the money to GMR.
He noted that the compensation is close to what former president Maumoon Abdul Gayoom had estimated while speaking to media in April 2014, at an amount less than USD 300 million. Anil also pointed out that the amount is significantly lower than the estimated USD 800 million from opposition political parties.
Anil went on to say that following MACL’s takeover of Ibrahim Nasir International Airport (INIA) after GMR, major airport development projects have been undertaken which had advanced INIA’s operations and increased its profit remarkably. Anil recalled that MACL had thus recorded a net profit of MVR 1.2 billion in 2014, and that Bank of Maldives Ltd (BML) has also established a hefty US Dollar reserve since.
The previous government of Maldivian Democratic Party (MDP) under former president Mohamed Nasheed’s reign had handed over INIA operations to GMR Group for 25 years. Two years later, the government of former president Mohamed Waheed who rose to office following Nasheed’s fall from power, had taken back the airport from GMR as the agreement was debilitating to both MACL and Maldivian citizens.
GMR had filed the case at Singapore’s Arbitration Centre tribunal and the case had been ongoing for four years until this Tuesday. The management of MACL assured that it had been acquiring the cash for the compensation during that period.