The government of the Maldives has paid US$271million in damages to Indian infrastructure firm, GMR, for the abrupt termination of a lucrative contract to develop and manage the country’s main airport. The pay out, ordered by a Singaporean Arbitration tribunal, includes the debt, equity invested in the project along with a return of 17percent, termination costs and legal costs. The damage payment includes the US$185million Axis Bank loan which GMR obtained. This payment includes the principle amount of the loan, the accumulated interest rates and legal costs as well. US$86million is the actual pay out to GMR.
The government faced difficulties in defending its position during the arbitration proceedings because of the loss of key documents. The main challenge Maldives Government faced when it defended its position was that many important documents regarding the award of the airport to GMR was lost. The loss of documents was the result of negligence on the part of the people who handled the GMR deal.
The damage payment for abrupt termination of lucrative contract has done great damage to the reputation of Maldives as a nation. Maldives is already under IMF and other global financial watchdogs scanner for being under tremendous international debts, and to add to the woes of the nation’s economy, these abrupt termination of contract has resulted in loss of faith and trust of global investment firms from Maldives government.
The impact has now started effecting Maldives is evident from the fact that Maldives now has to give sovereign guarantee of USD 328million to Turkish firm which has proposed to develop 5,000 housing units in the reclaimed suburb of Hulhumale. The committee’s chair Ahmed Nihan stated that the guarantee was granted to Ozturk Holding of Turkey for the development of 5,000 housing units in Hulhumale, though he did not disclose the guaranteed amount during the meeting.
In response to an inquiry by mainstream national media after the committee meeting, Nihan revealed that the sovereign guarantee amounts to USD 252.5 million. However, Maldivians understands that the sovereign guarantee totals USD 328 million when the interest of the loan taken by Ozturk and other expenses are taken into account. The members of the Maldives finance committee have not discussed the sovereign guarantee at great lengths during the meeting despite its hefty amount. Details have not been disclosed as of yet regarding the housing project being awarded to Turkish firm, Ozturk Holding. While the project that commenced last April to develop 15,000 housing units in Hulhumale include units constructed by a Turkish company, it remains unclear whether the firm is Ozturk Holding or not.
“Game of Contracts” that is being played between President Yameen’s corrupt Government and Turkish construction firm Ozturk Holding, owned by a Turkish national Mr Yusuf OZTURK, and found that Ozturk Holding is not registered with relevant government bodies in that country, including the Turkish Contractors Association (TMB) and the Foreign Economic Relations Board (DIEK), a requirement which is mandatory. Turkish Contractors Association has no records of any major construction works that the company has undertaken in Turkey while the Foreign Economic Relations Board denied knowing the existence of the company.
In the light of the foregoing, the credibility of Ozturk Holding is highly questionable and for this reason, we discovered the truth behind: Why Maldivian foreign investment is being distributed by President Yameen to foreign firms as either damages to canceled contracts or as dubious payment to non existent firms? The truth is that President Yameen is awarding major construction contracts to bogus and non-existent companies in lieu of laundering nation’s wealth into his own pockets. This is not the first time such type of corruption has been seen by Maldives as earlier too such fake contracts have been awarded. Construction contract for mega China-Maldives Friendship Bridge, connecting Male to Hullmale, has been awarded to a World Bank blacklisted Chinese firm. The Maldives International Airport runway contract also has been to a bankrupt company owned by Osama Bin Laden.
Shame on You, President Yameen!!! Country is going through debt crises, economy is crashing, prices are rising, ….., and you are busy filling your own pockets with Maldives foreign investment. Maldivians are suffering and you are still eating up your own country. Shame on You, President Yameen!!! Shame on You!!!
Must Read:
Saudi Binladin Group awarded Maldives airport terminal project.
Maldives pays US$271m in damages to India’s GMR
World Bank blacklisted Chinese company awarded Maldives bridge project.
MORE THEFT …illegal deals and abuses exposed at State House
