GMR & MALDIVE case study

… The Air Controversy GMR & Maldives
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-case study analysis…

Presentation By:
Sanjay Kumbhar (Roll No 107)
Athira Nair (Roll No 79)
Pradip Nevarekar (Roll No 108)
Rachita Jain (Roll No 67)
Namita Shinde (Roll No 72)
Madhu Jaiswal (Roll No 80)
J.Ranjam (Roll No 120)



*** Flow of Presentation ***

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Introduction - Rachita
Bidding Process -Pradip
Award of Contract -Namita
What Went Wrong? – Athira
Perception from Maldive Govt.- Ranjan
Perception from Indian Govt.– Madhubala
Arbitration claim- Sanjay

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Conclusion



*** Introduction ***

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•

Introduction

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Reason

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Purpose

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FAA with IFC & World Bank

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Contents of FAA

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*** Bidding Process ***

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competitive bidding process.
1- IFC agreement 28/7/09
2- Transaction Structure Report
3- Announcement 6/10/09
4- EOI acceptance
5- Sending RFQ 23/12/09
6- Pre-qualification Application acceptance 17/1/10
7- Pre-qualification evaluation 20/1/10

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8- Sending of RFP/IM 18/3/10

9- Bid opening 20/6/10
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10- Bid Evaluation 24/6/10
11- Signing the agreement 28/6/10



*** Award of Contract ***

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Introduction- GMR & MAHB.

Contract Duration- 25 years

Contract Value- $511 million

Terms & Conditions- ADC



*** What Went Wrong in Male ? ***

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*** Perception of Maldive Govt. ***

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Failure to renegotiate terms
Not a valid agreement,“
ADC not authorised by the parliament.
Non-reversible & Non-negotiable decision
Deter potential investors - down a path to economic ruin.
GMR’s due diligence
Fooled and cheated.
Illegal

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*** Perception of Indian Govt. ***

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Very negative signal to foreign investors & international community
Freeze $25-million annual aid to the country
We are not happy
Impact on our bilateral ties
Maldivian foreign minister Abdul Samad Abdullah, Salman Khurshid &
Prime Minister Manmohan Singh



*** Legality & Arbitration ***

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Maldives terminates GMR's airport contract (27th Nov’12)
The airport was taken over by the Maldives Airports Company Limited
after a high-voltage legal tussle in which GMR had initially got a stay
order on the termination from the Singapore High Court.
GMR approach Singapore court against Maldives Govt , claims $800
Million
Feels


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Agreement had stated that GMR should be given a 30-day notice of

termination, the government believed that it need not be followed since
the contract was void.


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Cheated -contract cancelled over an illegal component –ADC

The government has given a seven day notice to GMR to leave the

airport,“.



*** Conclusion ***

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June 17, 2013GMR gets clean chit from Maldives probe agency in Male airport
case because i) Concrete record on the concession agreement.
& ii) No corruption was found in the bid evaluation ph
June 21, 2013GMR sue has sought a compensation of $1.4 billion for the
“wrongful termination” of its 25-year contract to develop and
operate the Male International Airport. The figure of $1.4 billion
was reached after taking into account loss of profit, payments
made to sub-contractors besides others.
 Sept 21, 2013 MALE (MALDIVES)Maldives Govt welcomes & encourages FDI- Foreign Direct
Investment, but differed on the issue of the ousted Male airport
operator GMR.
 Wrong Signal, Image Damage, Power to economy- Tourism, the
country is desperately trying to attract FDI for building its infrastructure.
It can hardly be disputed that treating the largest FDI investor in such a

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GMR & MALDIVE case study

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GMR & MALDIVE case study