Maldives government has offered a new deal to India's TATA Housing in move to avoid a multi million dollar payout following the annulment of an agreement to construct luxury flats in the two prominent plots in the capital Male.
The project to construct of flats in four separate sites in Male was awarded to Indian construction giant TATA Housing which joined up with SG18 Developers Pvt. Ltd., under the banner of Apex Realty.
Though the agreement was signed in 2010, the project was delayed because of the pending resolution of certain unavoidable contractual issues.
TATA had handed over the social housing flats in two plots late last year but had failed to begin construction of a total 127 luxury flats in two separate land plots in Male.
In April last year, the government annulled the agreement on the two remaining plots prompting TATA to initiate arbitration proceedings at the Mumbai Arbitration Centre seeking USD250 million in damages.
AVAS understands that in a bid to avoid arbitration and the subsequent payout, the government has offered a fresh plot from the capital which also includes the construction of luxury villas in an island in Lhaviyani Atoll.
Both parties however, are reportedly yet to agree on the terms over the luxury villas.
Maldives government has a poor record in arbitration proceedings losing to India's GMR Group and Malaysia's Nexbis.
The government had 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 country's main airport.
Malaysian security firm Nexbis meanwhile had won a USD15 million payout over the abrupt termination of a contract with the Maldives government to install and operate a border control system in the archipelago.
