Malé tore GMR airport pact despite calls from Khurshid

Nov 29 2012, 02:48 IST
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Salman Khurshid Salman Khurshid
SummaryAbdullah took the line that the contract was being cancelled on “legal grounds”

Barely 24 hours before the Maldives government terminated GMR’s contract to operate its international airport, External Affairs Minister Salman Khurshid on Monday spoke to his Maldivian counterpart Abdul Samad Abdullah in “at least two phone calls” and conveyed New Delhi’s strong reservations on the proposed move.

The Indian Express has learnt that Khurshid had “two long conversations” on Monday, during which he put forward the argument that it would be a catastrophic move for a country like Maldives, which was already reeling under pressure from the international financial crisis, to junk the GMR project, the single largest FDI in its history. He is also understood to have conveyed that the move would affect bilateral relations.

However, Abdullah took the line that the contract was being cancelled on “legal grounds”. That, however, did not cut much ice with the Indian side, which maintained that business ties should be handled in a “business-like manner”, and not in an arbitrary way. However, Khurshid’s arguments went unheeded.

It is learnt that New Delhi got wind of the proposed move when the Maldivian government over the weekend briefed envoys of all countries residing in Male, including the Indian High Commissioner, about its impending decision to rescind the contract.

Former Maldives president Mohammad Nasheed’s key aide, Ibrahim Hussein Zaki told The Indian Express over telephone from Colombo, “India has to step in to protect its interests. We are in touch with the Indian establishment about the decision.” He had met Khurshid and NSA Shivshanker Menon last week and assured of Nasheed’s support in favour of the GMR contract.

On Tuesday night, within hours of Maldives government cancelling the GMR contract, India reacted strongly.

Stressing that the GMR contract “represents the single largest FDI in the history of Maldives”, New Delhi said the decision to terminate the contract “without due consultation with the company or efforts at arbitration provided for under the agreement sends a very negative signal to foreign investors and the international community”.

The Maldives cabinet on Tuesday annulled the agreement made with GMR to operate the Ibrahim Nasir International Airport at Hulhule Island near Male. The $500 million contract awarding the airport to GMR for 25 years was signed on June 28, 2010, when Mohamed Nasheed was the president.

The project was caught in a political battle since the regime change in the Maldives earlier this year. Earlier this month, New Delhi had lodged a protest with President

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