May revive GMR project to guard Indian investment: Maldives

The Maldives on Thursday gave indications that it could revive a scrapped airport project that was initially given to Indian infrastructure group GMR , as new President Abdullah Yameen promised to protect Indian investments in the archipelago during a meeting with Prime Minister Manmohan Singh.

Also read: Maldives-GMR: Out of court settlement for Male airport

Yameen was in India on his first foreign visit after taking over as the Maldivian president. The scrapping of the GMR project by the previous government and other problems faced by Indian investors were among the main topics of discussions between him and Singh.

Defence partnerships and steps to deal with religious extremism were also on the agenda. Besides GMR, a Tata Housing project also ran into trouble with the former Mohammed Waheed Hassan government. The two countries have now agreed to amicably resolve all differences, the leaders said while addressing a joint press conference.

They have decided to consider a Bilateral Investment Promotion Protection Agreement, which could help deal with issues over investments. New Delhi’s comfort level with the new regime in the Maldives was evident from the warm welcome it gave to Yameen.

India was wary of the previous government of Mohammed Waheed Hassan, especially over concerns that he may take that country, a traditional India ally, closer to China. Waheed, who had come to power in February 2012 through an alleged coup, was also perceived to be hostile to Indian businesses operating in the Maldives.

The over USD 500 million project given to AMR in 2010 for modernising and operating the Male International Airport for 25 years was scrapped by the Waheed government in 2012 saying that the contract was illegal.

The GMR project was the largest foreign direct investment by any company in the Maldives and the scrapping of the project had jolted the confidence of Indian investors, which sought the intervention of Delhi to address the troubles faced by them. In June last year, GMR sought a compensation of USD 1.4 billion from the Maldives in a claim filed before an arbitration court in Singapore. A final order in the matter is likely to come by the end of March 2014.

During Yameen’s visit, the two nations signed three memoranda understanding covering healthcare, manpower requirement and the allotment of a plot of land for Maldives High Commission in Delhi.

India also extended a standby credit facility of USD 25 million to the Maldives to finance imports from India. India agreed to meet requirement of petroleum products in the Maldives.

Both also resolved to boost security and maritime cooperation, people-to-people contacts and air connectivity. India has agreed to allow visa-free entry for people from the Maldives for medical treatment and remove restrictions on re-entry within two months. Yameen said his trip was an “accomplished visit” and that he was “deeply satisfied” with the agreements signed.

May revive GMR project to guard Indian investment: Maldives