New Delhi: The
Singapore high court turned down a petition by India's Axis Bank, which pleaded
that Maldives' takeover of the Male International airport from a GMRBSE -3.03 % Infrastructure-led consortium should be
stopped, as the bank would not otherwise be able to recover a loan it has given
the company, Maldives news website Haveeru.com reported.
Axis BankBSE -2.28 % leads a clutch of lenders, which includes Indian Overseas BankBSE 1.20 % and Indian Bank, with exposure to the airport project. The $511-million project has a debt component of $358 million.
After weeks of legal and political wrangling, the Singapore Court of Appeal ruled on Thursday that Maldives had the right to take over the airport. Axis Bank declined to comment.
In a statement, GMR said on Friday that it would facilitate a smooth transition of the airport, ending days of uncertainty about the future of the airport.
"In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nassir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight."
GMR and Malaysia Airports Holdings Berhad won a $511-million contract in November 2010 to modernise and the run the airport for 25 years. The finances of the deal went awry when a local court struck down the provision for a $25 airport development fee as illegal.
While the then government guaranteed to protect the project's revenues, a regime change saw the airport deal becoming an emotive and politically charged issue. The current government, under president Mohammed Waheed, terminated the concession agreement on November 27, sparking off a legal battle.
The key issue now is how much compensation GMR will receive and how can the state-owned Maldives Airports Company Ltd (MACL) afford the bill. A spokesperson for the Maldives president said the country will order a forensic audit to determine how much money has been spent by GMR so far.
"We will ask MACL to appoint a reputed international auditor to conduct a forensic audit and determine how much money has been spent and where. We have already filed for arbitration on the issue of compensation. Once we have the forensic audit report, we will submit that to the court as well," president Mohammed Waheed's press secretary Masood Imad told ET.
"We are taking requisite steps to work out the compensation receivable from the government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated June 28, 2010," GMR said in a statement.
In Maldives, the ousting of GMR appeared to be causing ripples in the political arena. The Maldivian Democratic Party (MDP) moved a no-confidence motion against the acting transport and defence minister Mohamed Nazim, who was seen to be among those who led the campaign against the airport deal.
Axis BankBSE -2.28 % leads a clutch of lenders, which includes Indian Overseas BankBSE 1.20 % and Indian Bank, with exposure to the airport project. The $511-million project has a debt component of $358 million.
After weeks of legal and political wrangling, the Singapore Court of Appeal ruled on Thursday that Maldives had the right to take over the airport. Axis Bank declined to comment.
In a statement, GMR said on Friday that it would facilitate a smooth transition of the airport, ending days of uncertainty about the future of the airport.
"In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nassir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight."
GMR and Malaysia Airports Holdings Berhad won a $511-million contract in November 2010 to modernise and the run the airport for 25 years. The finances of the deal went awry when a local court struck down the provision for a $25 airport development fee as illegal.
While the then government guaranteed to protect the project's revenues, a regime change saw the airport deal becoming an emotive and politically charged issue. The current government, under president Mohammed Waheed, terminated the concession agreement on November 27, sparking off a legal battle.
The key issue now is how much compensation GMR will receive and how can the state-owned Maldives Airports Company Ltd (MACL) afford the bill. A spokesperson for the Maldives president said the country will order a forensic audit to determine how much money has been spent by GMR so far.
"We will ask MACL to appoint a reputed international auditor to conduct a forensic audit and determine how much money has been spent and where. We have already filed for arbitration on the issue of compensation. Once we have the forensic audit report, we will submit that to the court as well," president Mohammed Waheed's press secretary Masood Imad told ET.
"We are taking requisite steps to work out the compensation receivable from the government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated June 28, 2010," GMR said in a statement.
In Maldives, the ousting of GMR appeared to be causing ripples in the political arena. The Maldivian Democratic Party (MDP) moved a no-confidence motion against the acting transport and defence minister Mohamed Nazim, who was seen to be among those who led the campaign against the airport deal.
Under
Maldives rules, a minister must step down if a simple majority in the 77-member
Majlis supports a no-confidence motion. MDP, led by the ex-president Mohamed Nasheed, currently has 30 members.Maldivian
Democratic Party (MDP) moved a no-confidence motion against the acting
transport and defence minister Mohamed Nazim, who was seen to be among those
who led the campaign against the airport deal. Under Maldives rules, a minister
must step down if a simple majority in the 77-member Majlis supports a
no-confidence motion. MDP, led by the ex-president Mohamed Nasheed, currently
has 30 members.
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/gmr-spat-singapore-high-court-rejects-axis-plea-gmr-to-hand-over-airport/articleshow/17527150.cms
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