Yameen accused of ‘sullying GMR’s reputation’

GMR has hit back at President Abdulla Yameen’s characterisation of the decision to lease the Maldives main airport to the Indian infrastructure giant as an “economic crime.”

Yameen had claimed that GMR only paid MVR16 million (US$1 million) to the government a year whilst the state-owned airports company had generated MVR1 billion (US$65 million) in the first year after nationalising the Ibrahim Nasir International Airport in December 2012.

In a letter to the Maldives Airports Company’s managing director – obtained by The Maldives Independent – Andrew Harrison, former CEO of GMR Malé International Airport Pvt Ltd, said the president’s remarks were “absolutely baseless and far from the truth and aimed mainly at sullying GMR’s reputation.”

During the period in which GMR operated the Malé airport, GMR was the highest revenue generator for the government, the letter read.

While the government earned on average MVR90 million a year from MACL from 2006 to 2010, GMR paid the government an upfront fee of MVR1.2 billion (US$78 million) and MVR508 million (US$33 million) in concession fees in 2011, Harrison said.

“In addition, GMR paid more than MVR308 million [US$20 million] to the government through royalties, duties, etc, during the same period,” the letter continued. “Moreover, GMR would have paid close to MVR1billion [US$64million] in 2012 had GoM/MACL honoured and performed their obligations under the concession agreement.”

Yameen made the remarks at a ceremony held earlier this month to mark MACL’s 50th anniversary.

In his speech, Yameen had also expressed confidence that returns from the airport will be high enough to compensate GMR, which is seeking nearly US$1 billion in damages after a Singaporean arbitration tribunal ruled last year that the government had “wrongfully” terminated its “valid and binding” concession agreement in December 2012.

The tribunal is due to determine the amount of compensation owed to the GMR-led consortium. In February, the tribunal ruled that the payout should include GMR’s US$170 million debt to a Singaporean bank.

In June 2013, the Anti-Corruption Commission released a 61-page investigative report concluding that there was no corruption in the awarding of the concession agreement to the GMR-Malaysia Airports Holdings Berhad consortium.

Yameen has since announced a US$800million project to develop and upgrade the airport. The project is to be financed entirely through loans.

In his letter, Harrison said: “Had the concession agreement not been illegally terminated by the Maldives government, Maldives would have had a world class new international passenger terminal more than two years ago (by early 2014) and would have secured a steady stream of income for GoM to revive its troubled, tourism driven economy.

“All this would have been achieved with GMR making all the investments while GoM having to spent not a single cent from their pocket.

“On the contrary, Maldives is now borrowing more than USD800million with no sight of the new airport terminal in the immediate future.”

The opposition Maldivian Democratic Party has also hit back at Yameen’s claim, arguing that the US$800million loan to develop the airport and the hundreds of millions owed to GMR in damages would increase the risk of debt distress.

The religious nationalist campaign led by Yameen to discredit a democratically elected government and terminate the agreement with GMR was the biggest “economic crime” the Maldives has seen, the party added.