Government begins final discussions on GMR issue

The government has said at a joint press conference by four ministers today, that it had begun discussions on either terminating or making changes to the agreement with GMR, as this agreement will result in annual losses of billions of Rufiya to the government.

Attorney General Azima Shakoor said at the press conference that the President had decided to hold discussions with political parties to seek a solution to this problem.

She said that the government is of the view that the agreement with GMR is economically unsustainable; however, terminating or changing it could have legal consequences.

“The government has noted three issues in relation to this. One is that our current financial situation does not allow us to pay the compensation if we terminate the agreement. The second issue is investor confidence, which is important because we are dependent on foreign investment. We also have to consider diplomatic consequences of such a decision,” she said.

She said that additional agreements made by the former government with GMR, such as the ones which permits reduction in fuel and ADC concessions, will result in losses of millions of dollars to the Maldivian government.

Moreover, these losses double if we take into account the businesses the government had to give up as a result of those agreements.

Azima estimated that the government will have to pay GMR about $700 million if the agreement is to be terminated.

“It is possible that the compensation in the event of termination is higher than the losses currently borne by the government,” she said.

Tourism Minister Ahmed Adheeb said at the press conference that steep price increases at the airport have resulted in reduction of flights which carry large groups of tourists.

He said that the tourism industry and entire economy of the Maldives will suffer great losses unless this problem is solved soon.

“We have to cooperate to make a decision on the issue of this agreement. We have no say when fuel and other charges are increased. This is Maldives’ main airport, and it is being monopolised. We have to take urgent action to solve this issue,” he said.