Twenty four hours after the Maldives government served notice on GMR Infra to terminate the contract to develop its Male airport, The Indian Express talked to Sidharath Kapur, CFO of GMR Airports.
What is the current status of the airport project after the Maldives government has served notice for termination of contract?
We have been given seven days time to hand over the airport. Naturally time is short so we are already moving for all legal recourse on the issue including at the arbitration tribunal at Singapore. The Maldives government has incorrectly decided to terminate a validly entered contract. The contract for the airport was entered into under the supervision of the IFC, a World Bank affiliate in 2010. The Attorney General of Maldives too had opined that this is a legally correct contract. No one including our competitors had objected to the contract. The contract builds in heavy compensation charges against cancellation which possibly the (Maldives) government does not realise. But we will come to that after all other options are explored.
What are the reasons because of which President Waheed’s cabinet served notice for termination?
The developments about the airport have all obviously happened after the change of regime in Maldives. It is most unfortunate that it has developed so much of political nuances. The breach of a sovereign guarantee has sent shock waves within the investor community. The development is also extraordinary as the issue about the airport development charges, which has been given as the reason for the notice are already with the arbitration tribunal in Singapore. It has been filed this month.
Do you plan to ask the World Bank to intervene since the IFC was the transaction adviser for the project?
We will certainly approach the World Bank. We will seek the support of both the World Bank and the IFC. The issue is now in the political arena and has to be dealt with accordingly. We operate in several countries and nowhere have we faced such problems.
To what extent does the development in Male impact your finances?
This is too early to comment on such issues. But you can be sure it will not have any significant impact. Right now however we are looking at every option available to us and that includes all legal ones too.