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Legal action must to be taken against IFC regarding GMR issue: Report

The Attorney General’s Office has advised the President to seek compensation from the International Finance Corporation (IFC) for their negligence in providing consultation to the government on the GMR agreement.

ADK GENERAl

The IFC is a member of the World Bank Group.

The report compiled by the ministerial committee on the correspondences of the GMR agreement states that all consultation regarding the GMR agreement was provided by the IFC. It states that the organization had not advised the government thoroughly on the issues related to the bid highlighted by the evaluation committee and the cabinet.

The report states that while IFC included an assessment of the revenue MACL would receive, it neglected to include a forecast of losses that might be incurred by the government.

The corporation had neither made any attempt to calculate the profits that would be gained by GMR, nor made any valuation of the government asset that was to be handed over to the company.

The report says that due to these reasons and reflecting on the current situation, the organization should take responsibility for its negligence and that the government has a legal right to pursue compensation.

“The general conclusion regarding the work of the IFC is that they have shown negligence in advising the government. Therefore, the organization should, to an extent, be answerable to the current situation, and the government has certain legal rights in this regard. We recommend that the Maldivian government seek compensation for the losses,” states the report.

The report also includes details of the financial and legal counsel provided by IFC.

In this regard, the report notes that the draft of the GMR agreement was written by the IFC. The airport development projects that were finally agreed upon were also in accordance to the consultation provided by the IFC. The organization had advised that there were no legal problems with the concession agreement. No official reports were compiled regarding the consultation given to the government or the projects that were proposed in the agreement.

Papers show that during the preliminary work on the privatization of the airport, IFC submitted two other modules along with a “concession module”. There seems to be no evidence of the other two modules, the report said.

The report also said that GMR failed the technical evaluation of the first bidding process, however, the company was passed following discussions and a committee vote.

The bid document included the draft agreement which mentioned the 25 dollar charge and airport development master plan. As a result, it was possible to perceive that the contents of the agreement had been agreed to by the government, resulting in some rights of the government being compromised.

“Based on the grave negligence on the part of IFC, and considering that the government has incurred great losses due to this negligence, and reflecting on the points previously noted, legal action has to be taken regarding this matter,” states the report.

The report states that the government consulted IFC, and that representatives from the organization visited the Maldives on three different occasions to share information for this report.

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