Agreement leasing airport to GMR was signed against the law: AG

The Attorney General's Office has said that the agreement between GMR and Maldives Airports Company Limited (MACL) to lease Ibrahim Nasir International Airport (INIA) to the Indian infrastructure company was signed against the law.

In a letter to the Anti-Corruption (ACC) from the Attorney General’s Office (AG) following the AG’s review of the investigation report by the ACC on the lease of the airport to GMR, the Attorney General’s Office stated that even though the commission had concluded that it the agreement was signed according to the law, reasoning that it was signed prior to the amendments of the Public Finance Act, the signing of the agreement did contradict Article 5 of the Public Finance Act and the Public Finance Regulation. The letter states that the commission had neglected to mention these discrepancies.

It also states that the MACL Board of Directors had initially refused to sign the agreement with GMR and that the previous administration had forced changes to the members of the board, appointing the people that would agree to sign the agreement. The letter states that ACC had neglected to investigate these matters.

“While the agreement was signed within a few hours of a meeting of the Board of Directors of Maldives Airports Company Limited, it is questionable that the newly instituted board had thoroughly considered the lease of such a large asset of the State, and that this has not been referred to, in any extent, in the investigation report. While it has been declared that there it had no legal implications in signing the agreement under such circumstances, the law governing contracts was also not properly considered, while signing an agreement under such an atmosphere,” the letter stated.

The ACC investigation report claims that the government gains a profit from the GMR deal. The AG’s letter however questions the formula used by the commission in projecting the gains and losses in the deal. The letter stated specific details of the questionable discrepancies.

The letter states that the ACC calculations had not taken into account the entire scenario of the of the agreement and that the correct estimation, when MACL’s assets and businesses in the airport were transferred to GMR, was a loss in excess to MVR 15 billion. These facts were neglected in the investigation report, the AG letter stated.

It also stated that the private investments surrounding the functioning of the airport, in Hulhule’ and Hulhumale’, were also predicted to suffer when the airport was handed over to GMR.

The AG letter to ACC also stated that the financial numbers included the ACC report were dependent on the gains of MACL following the lease of the airport, but had not taken into account the losses gained from granting all their assets to GMR.