Maldives terminates $511 million deal with GMR Infrastructure

28 Nov 2012

The Maldives government has cancelled the contract awarded to GMR Infrastructure for the operation and up gradation of the Maldives airport at a cost of $511 million, raising questions over the future of foreign investment in the islands renowned for luxury resort.

The cancellation of the deal signed in 2010 follows President Mohamed Waheed's failure to renegotiate term. Nasheed's rivals filed legal action claiming the contract was invalid as it contained a $25 airport development charge per outgoing passenger, which was not authorized by the parliament.  Further, the company has been given seven days to leave the Indian Ocean island chain.

However, GRM viewed cabinet's decision being' unilateral and completely irrational,' with legal arbitration over the deal currently being in the Singapore High Court. Further, the company will also be taking all measures to ensure the safety of employees and safeguard its assets.

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