Air Scrap

COLOMBO, Nov 28, 2012 (AFP) – The Maldives defended Wednesday its controversial decision to terminate an airport management contract with an Indian firm, saying the deal was dogged by “legal, technical and economic issues”. President Mohamed Waheed’s government gave five days to GMR Group to leave after prematurely ending the 25-year lease of the nation’s main international airport for a one-time fee of $78 million and revenue share thereafter.

The government said it was advised by unnamed British and Singaporean lawyers to abrogate the agreement, prompting India to warn that the move could scare away foreign investors from the archipelago.

“The cabinet decided to terminate… on grounds that there were many legal, technical and economic issues regarding the agreement, and that it was legally invalid, and impossible to further continue,” Waheed’s office said.

Waheed’s government had objected to the privatisation carried out by his predecessor Mohamed Nasheed, the country’s first democratically elected leader who quit earlier this year and claimed he was forced out.

There was no immediate comment from GMR that ran the airport — which handles 2.6 million passengers a year — since November 2010