Attorney General (AG) Aishath Azima Shakoor today said that the agreement with Ibrahim Nasir International Airport (INIA) operator GMR, India had not been made for the benefit of the Maldivian economy.
A press conference was at the President’s Office today after the government assessed the issues that have surfaced in awarding INIA to GMR.
While noting the many issues with the agreement made with GMR, Azima stressed that though the view of some political figures and members of the public is to annul the agreement, it would be no easy task to do so.
She explained that cancelling the agreement could have potential legal issues, compensation and loss of confidence of other foreign investors in the government.
Azima added that though a specific amount in compensation that would be owed to GMR if the agreement with GMR was negated has not been evaluated in detail, the government believes that figure could be as high as USD700 million.
In addition, the AG also alleged that there were issues with the expertise provided by the International Finance Corporation (IFC) in awarding the airport to GMR.
According to Azima, possible profit to the government had been renounced when the agreement was made including island aviation and lounge services.
Economic Minister Ahmed Mohamed also reiterated the AG’s statement while adding that the country was unequipped to pay the compensation to GMR if the agreement is in fact canceled which according to him would exceed the amount the government could earn in the 25 years for which INIA had been awarded to GMR.
Transport Minister Ahmed Shamheed said that the condition of the INIA’s runway had not been reviewed before the agreement was signed and the latest tests done by GMR show that the condition of the runway had deteriorated. However, he said that reconstructing the runway had not been included in the agreement which he labeled as a highly irresponsible oversight. Minister added that GMR had been repeatedly stressing that the agreement had not included a clause on reconstructing the runway.
Tourism Minister Ahmed Adeeb said that as the agreement does not permit the government to have a say over the increase in airport fees and allowing GMR to monopolize it as a business, it could seriously undermine tourist arrivals and the industry as a whole. On that note, he highlighted that already the industry is experiencing a decline in bed nights.