Singapore International Arbitration rejects demand of GMR Infrastructure Limited of India for additional USD 15 million from Maldives for abruptly terminating the contract to develop and manage Velana International Airport (VIA). In its verdict, Singapore International Arbitration said GMR Infrastructure Limited of India cannot demand for further compensations from Maldives.
The administration of former President Mohamed Nasheed signed an agreement with the Indian company to lease VIA for a 25 year period but due to the negative effects of the agreement on the state and its people, the deal was terminated during the administration of President Dr. Mohamed Waheed Hassan. With the abrupt termination, the government of Maldives had to pay USD 271 million for the losses faced by GMR. The administration of President Abdulla Yameen Abdul Gayoom had successfully paid the compensation and took over the management of the airport, which is considered as the main gateway to the Maldives.
With minimum development conducted at Velana International Airport by GMR Infrastructure Limited, Maldives Airports Company Limited initiated the expansion project of the airport. In this regard, Beijing Urban Construction Group of China was contracted to develop a new 3.2-kilometre runway, a fuel farm, and a cargo complex. Meanwhile, multinational construction conglomerate, Saudi Binladin Group was contracted to construct the new passenger terminal as part of the expansion project.
However, in 2017, GMR demanded an additional USD 15 million from Maldives for abruptly terminating the contract to develop and manage the airport, which was rejected by Singapore International Arbitration.