GMR-Maldives row: Where the dispute lies
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However, after the contract was signed, the Maldives government changed. President Nasheed was replaced by President Waheed in a coup. This government claimed the contract was invalid. The airport is very significant for the nation, as out of its $2 billion annual GDP, about a fifth is made up of revenues that are connected to the airport.
Under the terms of the contract, Maldives had decided to make a passenger service charge a pass through item from the airport. In other words, the sum earlier being earned by the MACL now goes to the government directly. Instead it had allowed GMR to levy an Airport Development Charge (ADC) on the departing passengers, which GMR claims is an international experience.
The ADC was later turned illegal by a local court and could have been legalised had the country's Majlis approved such a charge. Before this could happen, the government changed in the coup. In the absence of such a charge the earlier government had allowed GMR to deduct the ADC revenues from the revenue share of the government. Due to this offset, the government has to pay $3.5 million to GMR for the current calender year period till November.
This charge has got caught up in the national legislature which projected that MACL can instead earn a $4 billion in the term of the concession period ie till the year 2035. But with GMR running the airport the revenue share for the nation will amount to $1. 4 billion. Against this argument, GMR has projected that Maldives will earn $2.1 billion. To buttress its point, the current government questioned the levy of the ADC as part of the revenue share model and moved to cancel the contract.
The Singapore court on Thursday allowed the government to take over the airport from GMR. The deadline expires Friday night, when the government will take over the airport.