INDIAN infrastructure giant GMR appealed Wednesday (November 5) to the Maldives not to use force if it goes ahead with a threat to throw out the company as operator of the island-nation’s airport this week.
The Maldives last week scrapped a 25-year-contract with GMR to upgrade and manage the international airport in the Male awarded by the previous government and gave the company until Friday (November 7) at midnight to leave.
The move has led to a standoff with neighbouring India, the regional power, which has said it is ready to “take all necessary measures to ensure the safety and security of its interests and its nationals” in the Maldives.
“We appeal to the government of the Maldives not to use any force,” Sidharth Kapur, chief financial officer of GMR Airports, said at a press conference in New Delhi.
“If there is any force, it will be very unfortunate. It will impact India’s interests,” he told reporters, adding that GMR has 140 foreign nationals working for it in the country.
GMR and Malaysia Airports Holdings won the $500m (£310.70m) project in 2010 in a tender process overseen by the World Bank during the tenure of Mohamed Nasheed, the nation’s first freely elected president who was ousted in February.
The new government has targeted the Nasheed-era deal with GMR, controlled by billionaire GM Rao, saying it was corrupt and illegal because its terms were never approved by parliament.
The airport “has become a football in a political arena”, said GMR’s Kapur.
Kapur warned GMR’s treatment will hit investor sentiment in the Maldives at a time when the country is seeking foreign financing for tourism projects.
He said GMR had made no calculation about the impact on its balance sheet if the contract is scrapped but added it could be “substantial”. GMR’s shares closed at 20.05 rupees ($0.37/£0.23) on Wednesday after touching a lifetime low of Rs16.75 ($0.30/£0.19) last week.
India, while not elaborating on how it will react if GMR is expelled, has said it is reviewing its aid and cooperation with Maldives, an archipelago of coral-fringed islands famous as an upmarket honeymoon destination.
