May have to reconsider aid to Maldives: India

India has said that it has to consider how to proceed with the aid it provides to the Maldives.

The Hindu has reported a senior government source saying that “an impact on ties is inevitable” following the Maldivian government’s decision to terminate the contract with GMR.

When asked whether India would continue assisting the Maldives, an official source said, “For the time being, we have to consider how things stand and how to proceed.”

Similarly, shortly after the Maldivian government announced its decision to terminate the contract, the Indian External Affairs Ministry issued a statement saying that the move “sends a very bad signal to foreign investors and the international community”.

The Indian government also said that all necessary measures will be taken to ensure the safety and security of its interests and its nationals in the Maldives.

Both officials who spoke to The Hindu agreed that an early election in Maldives is necessary for the country to regain stability.

The Maldivian government decided to terminate its agreement with GMR last Tuesday, and gave the company a notice of seven days.

GMR has responded by saying that the notice was given against the agreement, and that it will not heed the government’s decision.

The government of Maldives said that the contract between GMR and Maldives Airports Company Limited (MACL) was void ab initio, and has also decided to cancel the work permits and visas of GMR personnel after the last day of the notice period.

Former President Mohamed Nasheed’s government signed the contract with GMR on 18 June 2010.

One of the reasons given by the current government for cancelling the contract is that it receives no income from GMR due to the deduction of Airport Development Charge (ADC) of $27 per passenger from concession fees.

Before it was signed, concerns were raised by Parliament Members and former opposition parties over the dubious terms of the agreement with GMR.

The former Board of Directors of MACL also refused to sign the agreement, however it was signed anyway during an emergency Board meeting.