GMR issue: India, Malaysia share disappointment

Published: 22nd December 2012 10:02 AM  |   Last Updated: 22nd December 2012 10:02 AM   |  A+A-

Malaysia shared India’s disappointment at the premature cancellation of the contract for developing the Ibrahim Nasir International Airport by the Maldives Government, External Affairs Minister Salman Khurshid said on Friday.

“The disappointment that we felt and, I think we have a right to feel disappointed, was also felt by them (Malaysia),” Khurshid told reporters. He was talking about Prime Minister Manmohan Singh’s meeting with Malaysian Prime Minister Najib Tun Razak, who is here to attend the Asean-India commemorative summit which formally ended on Friday afternoon.

The state-owned Malaysia Airports Holdings Berhad had 23 per cent stake in the joint venture led by the GMR Group which had got the contract for operating and developing the international airport for a period of 25 years in 2010 during the term of President Mohamed Nasheed.

But, after Nasheed resigned in February, the government had been raising objections about the validity of the contract, with a campaign orchestrated by small, fringe political parties which are part of the ruling coalition. Finally, on November 27, the Maldives announced that contract was invalid from the beginning and that the government body was taking over the airport operations. The GMR Group started arbitration proceedings against the Maldives Government in the Singapore airport, which has given temporary relief to the latter by allowing it to oust the GMR Group.

A few days later after the contract cancellation, the Malaysian Foreign Minister Anifah Aman travelled to Male to discuss the matter. “The matter was mentioned. I would not say that it was discussed in great detail. We wanted an update on their impression because their Foreign Minister had visited the Maldives briefly,” said Khurshid.

He noted that Malaysia’s “takeaway” was also similar to the Indian understanding that there were “two separate issues”.

One part was the “pure assessment” of the contract and the consequences from the termination of the contract, including compensation and damages, added Khurshid.

The second part was whether there “were political reasons behind such a termination”.

“We have conveyed to Maldives that if there were political reasons behind the termination they should be contained and not allowed to spill over in the bilateral ties,” said the External Affairs Minister.

He also revealed that Malaysia had been able to secure from Maldives a letter that stated that “quality of performance was not the ground at all for termination”. “It was necessary for Malaysia to have it for its future prospects elsewhere,” the minister said.


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