Indian infrastructural firm GMR Group is seeking compensation of $1.4bn from the Maldives Government claiming ‘wrongful termination’ of the 25-year upgrade, modernisation and management contract for Ibrahim Nassir International Airport in Male.
Filed in a Singapore court where arbitration proceedings are to be heard, the final order in the issue is anticipated to reach conclusion by late March 2014.
Earlier this month, the Maldivian anti-corruption watchdog the ACC had ruled out any corruption in the awarding the contract to GMR, while the Maldives government claimed the contract was illegal.
The Maldives Government said that the termination of GMR’s contract in November 2012 was based on a paper presented on the technical, fiscal and economic issues.
The Maldives Government claims that it will not have to pay any compensation as the contract was ‘invalid’ from the outset.
GMR won the $511m contract to build Male International Airport in 2010 in collaboration with Malaysia Airports (MAHB), while the deal turned controversial following the firm’s decision to collect $27 towards airport development charge (ADC) and insurance charge.
Following the termination, GMR obtained an injunctive stay on the operations of the contract termination letter from the High Court of Singapore.
The project involved development of 0.6 million feet squared passenger terminal with passenger handling capacity of 5.5 million and a 20,000ft² VIP terminal, in addition to improvement to the existing terminal.
Image: Earlier, GMR sought $800m in damages from the Maldivian government over termination of Male International Airport development contract.