Business Today

GMR met criteria for Maldives airport project: CFO Sidharath Kapur

Speaking to Business Today, GMR Airports CFO Sidharath Kapur says the company had won the project in an "open and transparent" bidding process supervised by the International Finance Corporation, a World Bank affiliate.

K.R. Balasubramanyam | December 20, 2012 | Updated 12:58 IST

Bangalore-based infrastructure developer GMR Group on Wednesday dismissed allegations of unfair practices in the award of the Male international airport project in Maldives two years ago.

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Speaking to Business Today, Sidharath Kapur, Chief Financial Officer (CFO) of GMR Airports, said that the company had won the project in an "open and transparent" bidding process supervised by the International Finance Corporation (IFC), a World Bank affiliate.

IFC, he added, has successfully handled such public-private partnerships in the airport sector in many countries, and was responsible for developing, marketing and conducting the entire bidding process for the Male airport project.

Three consortia bid for the airport project, and GMR qualified in the technical, financial and legal evaluation, said Kapur.

"While other bidders opted for the 'earn and pay' route, the GMR consortium adopted a 'pay and earn' strategy, and hence paid $78 million up front to the Government of Maldives," he added.

Kapur was responding to comments on this website and the Mail Today daily by Masood Imad, Media Secretary in the Maldives president's office. Among other things, Imad had stated that GMR did not qualify as a bidder in the technical evaluation process. And that the previous government had gone against Maldivian law in approving the levy of an airport development charge on departing passengers.

According to Kapur, GMR's payments to the Maldives government in the first two years were more than 1.5 times those made by the Male Airports Company Limited, which had operated the airport for ten years before GMR took over.

"We would have given more than $2.5 billion to the Maldives government over the concession period. The government would have received more than $1 billion through other duties and royalties," he said.

In his comments to Business Today, Maldives Media Secretary Imad said his government would compensate GMR in accordance with the due process of law.

In response, Kapur said: "Compensation due to GMR due to the illegitimate cancellation of the contract by the government of Maldives may put a significant and avoidable financial burden on the people of Maldives."

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