Former government officials escape prosecution over GMR dispute

Former government officials escape prosecution over GMR dispute
December 08 19:14 2015

The Prosecutor General’s office has decided not to prosecute senior officials of the former government over the reduction of concession fees for ousted Indian airport developer GMR.

The anti-corruption watchdog had sought corruption charges against then-Finance Minister Ahmed Inaz, former Maldives Airports Company Ltd Chairman ‘Bandhu’ Ahmed Saleem, and former members of the MACL board of directors.

The Anti-Corruption Commission forwarded the cases for prosecution in January 2014. The PG office informed the commission of its decision to file the case at court last week.

According to ACC Vice President Muaviz Rasheed, the PG office said it was “not in their interest to pursue criminal charges” against the accused.

The senior officials of the Maldivian Democratic Party government were accused of incurring financial losses to the state by amending the concession agreement with the GMR-led consortium to develop and manage the Ibrahim Nasir International Airport.

The ACC said at the time that the finance ministry had changed the terms of the agreement to reduce the concession fee on jet fuel sales from 15 percent of revenue to one percent, resulting in a shortfall of MVR53.8 million (US$3.5 million).

In addition to two counts of corruption charges, the ACC had also asked the PG office to seek damages from the former minister, chairman, and board members as the alteration was approved with unanimous consent of the MACL board.

GMR is meanwhile seeking US$803 million as compensation after a Singapore tribunal ruled last year that the government had “wrongfully” terminated a “valid and binding” concession agreement.

In December 2012, the administration of former President Mohamed Waheed had declared the concession agreement ‘void ab initio’ (invalid from the outset), and gave GMR seven days’ notice to leave the country.

In the same month, the ACC sought corruption charges against former Finance Minister Mohamed Shihab and the MACL chairman over the decision to allow GMR to deduct a US$25 Airport Development Charge (ADC), stipulated in the contract, from concession fees owed to the state.

A report by the Auditor General found that concession revenue due to the government had plummeted fourfold as a result of a Civil Court ruling that blocked the developer’s charging of of the US$25 ADC, on the grounds it was a tax and therefore required parliamentary approval.

In June 2013, the ACC released a 61-page investigative report that concluded that the bidding process was conducted fairly by the International Finance Corporation, and that the GMR consortium won the contract by proposing the highest net present value of the concession fee.