Maldives government has been asked to pay nearly USD250 million in damages to India's infrastructure giant GMR by an international arbitration tribunal over the abrupt termination of the contract to operate the archipelago's main airport.
The Singapore based tribunal had in February ruled in favour of the GMR group of companies on its dispute with the Maldives government on the airport project.
Attorney General Mohamed Anil Thursday, read out a statement which said the tribunal had ruled that the government must pay USD208 million in damages and interest on the figure.
The figure would be hailed as victory for the government as the GMR had demanded USD1.4 billion in compensation.
The dispute stems from a 25-year contract to modernize, expand and operate the Maldives’ main international airport that the government entered into with GMR Male International Airport Pvt. Ltd. in 2010.
The mega project worth over USD500 million was awarded to GMR during the tenure of former President Mohamed Nasheed, despite concerns by the then opposition.
Shortly after the controversial resignation of Nasheed, the government kicked out GMR and cancelled its lucrative contract to run the airport.
The government has maintained that the contract was invalid in November 2012 after the parties fell into dispute over a fee GMR imposed on departing passengers, which the government said was contrary to Maldivian law.
The tribunal however, had ruled the original concession agreement was valid and binding and that the Maldives government had unlawfully repudiated it.
Despite GMR winning the arbitration, the government had voiced confidence that the compensation would not exceed USD300 million which it said would be manageable by the present state owned airport operator.
