Minister of Finance Ibrahim Ameer has stated the termination of the agreement with India-based GMR Group was an economic disaster. He made the statement on Twitter at a time when some individuals have been voicing different accounts of the agreement between the government and GMR to develop Velana International Airport (VIA).
In the tweet, Minister Ameer said terminating the agreement with GMR was the biggest economic disaster that has occurred in the Maldives. He detailed the then-government was forced to pay USD 270 million in compensation over the termination of the agreement and finance the development of the airport from funds taken from the state budget, as a modern airport was required to develop the tourism industry. The government had also taken a loan of USD one billion and increase the state's debt, which resulted in the government being unable to fund other essential projects and programmes, he added.
The minister said the development of the airport would have been completed in 2014 if GMR was allowed to continue with the project, which would have allowed the Maldives to record 6.7 million tourist visits before COVID-19 devastated the economy of the country. He added the Maldives could have had a GDP of USD 10 billion by 2020 instead of the current USD five billion. He also estimated the termination of the agreement with GMR cost the country USD 13 billion in potential profits from the tourism industry.
The administration of former President Mohamed Nasheed signed the agreement with the GMR to lease VIA for a 25-year period, but the deal was terminated by the administration of former President Dr. Mohamed Waheed Hassan due to the perceived negative effects of the agreement.
A Singapore arbitration tribunal forced the Maldives to pay USD 270 million for the losses faced by GMR.