The Maldives has cancelled a $511m contract awarded to the Indian infrastructural firm GMR Group for the upgrade, modernisation and management of Ibrahim Nassir International Airport in Male.
The 25-year contract faced legal, technical and economic issues and was legally invalid according to a statement from Maldives President Mohamed Waheed's office.
The Maldives Government said that the decision is based on a paper presented over is based on the technical, fiscal and economic issues.
GMR has been asked by the Maldives Government to leave the country within seven days after which GMR said in a statement that the firm is taking all measures to ensure the safety of its assets.
"This unlawful and premature notice on the pretext that the Concession Agreement [CA] is void is completely devoid of any locus standi and is therefore being challenged by the company before the competent forums," GMR added.
"We are confident that the stand of the company will be vindicated in every way," the firm said.
The Indian firm was awarded the contract to build Male International Airport in 2010 in collaboration with Malaysia Airports Holdings under the administration of Maldives' former President Mohamed Nasheed.
The deal reported to turn controversial following GMR Group decision to collect $27 towards airport development charge (ADC) and insurance charge, a move which has been struck down by the Civil Court.
Following the termination of the contract, Maldives Airports will have to pay a compensation of $3.5m to the company over the three years.
Image: GMR was awarded a contract to modernise and operate the Ibrahim Nassir International Airport development contract on 24 June 2010.