GMR VIA contract cancellation costly mistake, Fayyaz says
The termination led to an international arbitration ruling in favour of GMR, which resulted in the state paying MVR 4.17 billion in damages.
Maldivian Democratic Party (MDP) Chairperson Fayyaz Ismail has described the decision to cancel the airport development agreement with India's GMR Group as the “stupidest decision ever taken by a leader of Maldives.”
In a post on social media platform X on Wednesday, Fayyaz referred to the 2012 termination of the contract awarded to GMR to develop and operate Velana International Airport (VIA) — then known as Ibrahim Nasir International Airport — during the administration of former President Mohamed Nasheed. The agreement had been signed on 28 June 2010 for a 25-year period.
The decision to cancel the contract was made by the administration of former President Mohamed Waheed following the fall of Nasheed’s government. The termination led to an international arbitration ruling in favour of GMR, which resulted in the state paying MVR 4.17 billion in damages. The payment was made in 2016 during the presidency of Abdulla Yameen.
Fayyaz stated that the cancellation of the GMR contract, followed by significant borrowing to finance the construction of the airport terminal, has contributed to the country’s rising debt burden. He noted that a substantial portion of Maldives' debt is now linked to the airport development.
“This decision to cancel the agreement to develop and operate the airport without any cost to the state and instead construct it through debt was made purely for political reasons,” Fayyaz said.
He claimed that the economic cost of the decision has amounted to losses of approximately USD 60 billion. According to him, if the original agreement had been upheld, Maldives could have achieved higher GDP growth and seen annual tourist arrivals exceed four million.
Fayyaz also criticised the spending associated with the upcoming inauguration of the new terminal, questioning whether the project’s cost overruns and delays should be a reason for celebration.
Former President Abdulla Yameen has countered MDP’s claims, accusing the previous MDP government of increasing the cost of the terminal by USD 300 million under the pretext of project variations ahead of the 2019 parliamentary elections. These allegations have not been publicly denied by Fayyaz or other MDP leaders.
The new terminal is scheduled to open on 26 July. Initially estimated at USD 350 million, the project cost has now reached USD 457 million. The facility, developed by the Saudi Bin Laden Group and subcontracted to China Harbour Engineering Company (CHEC), will include 40 departure gates, 38 immigration counters, and aero bridges, and is expected to serve 7.5 million passengers annually.
