Maldives government has paid over USD270 million dollars to India's GMR to settle the row over a contract to develop the archipelago's main airport.
The government had been asked to pay over USD270 million in damages to India's infrastructure giant by an international arbitration tribunal over the abrupt termination of the contract to operate the 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.
The government had said the tribunal had ruled that Maldives must pay USD208 million in damages and interest on the figure which finally amounted to USD271 million.
Attorney General Mohamed Anil during a press conference on Tuesday announced that the government had paid the sum in full to the Indian infrastructure firm.
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.
Anil during the press conference said the damages had been paid by the present state owned airport operator Maldives Airports Company Limited (MACL) from its reserve funds. He insisted that the figure had not been paid from state funds.
The AG explained that the funds had been settled quickly as the government faced the danger of ballooning interest.
He also assured the public that the payout would not affect the government's plan to develop the airport.
Anil also said the government would soon submit a statement to the parliament explaining the benefits of cancelling the GMR contract .
